The Most Horrible People In the World
How bad are our elites? So many examples: Edward DeMarco, Fred Hiatt, Ben Bernacke…
Two events from the last week have underscored this disturbing reality. The most widely covered was the Federal Reserve’s announcement that, despite a weakening economy, it still would not take steps to stimulate growth. The Fed may not like mass unemployment, but it dislikes inflation even more, and in its calculus, the hypothetical prospect of the latter outweighs the immediate reality of the former.
Here’s a second case, smaller but even more telling. The Obama administration has tried to prevail upon Edward DeMarco, the acting director of the Federal Housing Finance Agency, to offer lower mortgage rates to underwater home owners through Fannie Mae and Freddie Mac, which he controls. What interests me is not the proposal itself, nor even DeMarco’s obstinate refusal, but an editorial in the Washington Post applauding DeMarco for refusing to implement the program.
And, yes, Obama needs to make an interim appointment to get rid of the reprehensible DeMarco (and, of course, Obama was far too late in moving to deal with the housing market, which could have used funds that had already been appropriated.)
i do not understand why there isn’t a single democratic senator calling for hearings on why the fed feels entitled to ignore the dual mandate.
One answer is that a lot of Democratic senators are in the pocket of the financial services industry, which doesn’t care about unemployment but cares a lot about inflation. Another is that most Democratic senators actually believe the Peterson/Bowles-Simpson/Wall Street line that The Deficit (TM) is the biggest problem humankind and the universe will ever face by far. The likes of Brown and Sanders are distinct minorities within their own caucus, much less the Senate as a whole.
tt, of course that was a bit of a rhetorical question for all the reasons you note, but jeez, you’d like to think that there was at least one dem senator with a populist bone….
Yeah, Brown’s in a tough reelection fight against a ridiculous amount of Koch-sucking $$$, so making the Fed’s inaction with respect to unemployment a major issue against his opponent could help.
The Fed has been ignoring its dual mandate for decades. And, like the military-industrial complex, Fed Chairs are among the few things that, even in this age of supposedly fierce partisanship, stand above the partisan fray. The last two Fed Chairs were appointed by Republicans and reappointed by Democrats. When it comes to core economic policies, there really is a Washington Consensus.
The consensus is to screw the 99% ers.
Is there any evidence that Obama disagrees with DeMarco?
Nope, absolutely no evidence that Obama wants FHFA to do something that he asked it to do.
Times 3!
If this were a single instance of walking not matching talking, the President could be excused. But its a long and troubling pattern, and nothing to suggest that four more years would spur the Fed to do anything other than keeping interest rates below zero – thus forcing every dollar that could have been saved, into the stock market.
That’s my opinion on the refusal to follow the twin mandate. If interest rates were allowed to rise, savers would benefit from the return, and real investment might occur. But it would come at the expense of the big casino.
Job growth? I’ve seen nothing that suggests that either the dems or reps care a whit about jobs, the lack thereof, the spiraling down of wages, the busting of unions both public sector and private.
The market continues to grow, yet, no positive outcomes for john or jane q. public. They’re all too busy climbing aboard the bus for CatFood Commission Tour of the America’s.
just for the record, and not in any sense claiming that it’s enough, but private sector job growth has been averaging 150K+ for over 2 years.
the biggest jobs problem is the massive cut in government jobs at the state and local level, and the obama administration has, of course, promoted more aid to state and local government to preserve those jobs, which would make the jobs picture decent if they still existed.
DeMarco is not on the Fed.
How odd then, with such broad bipartisan support, that none of their proposals have been adopted.
I’m pretty sure Anonymous was being sarcastic… just so you know.
That was me, and yes.
we can’t peer into his mind, but his administration made the proposal demarco is blocking.
Is there any evidence that Obama disagrees with DeMarco?
Whose proposal do you think DeMarco is blocking, exactly — Mitch McConnell’s?
Scratch my question, didn’t read carefully, slinking away now.
Obama kept the same people who got us into the Banking mess. that’s the source of the problem.
Bush or Obama, lighter/darker skin but otherwise the same policies and people.
nothing changes unless the Elites want it to.
the Banksters are in control. i think they enjoy having a Black man front for them. gets the Republican all crazy and the Democrats all dizzy to have this much attention.
Fun and Games while they continue to steal.
enjoy the show, folks. Obama is Bush3
Obama is Bush3
Yea, that’s not stupid at all.
Not only stupid, but obviously and bonecrushingly stupid.
Look: Obama has been incredibly inadequate in many, many ways. These economic issues are a prime example of that inadequacy.
But Bush was worse.
This isn’t rocket science. It’s not as if there are only two values for all economic policies–good and bad.
Lesser evils are less evil than greater evils. That doesn’t mean that one necessarily has to vote for them (though I usually hold my nose and do so). But it does mean that if one wants to make the case that others shouldn’t vote for them, one needs to grapple with the fact that, while evil, they are less evil than the greater evils.
+1
So, the original post is stupid and its racial attitudes are, in the very most generous reading, quite ugly.
But if we ignore everything after the first ten words or so, the first point, that Obama staffed his administration with the same people who created the mess in the first place, is pretty much correct. He didn’t re-staff the Fed. He put together an economic team in which the leading voice on the left was the same person who refused to regulate the derivatives market in the ’90s. (He had some better people on his team, like Romer and Bernstein, but he seems to have utterly failed to listen to them or failed to create a management structure in which their voices would be heard.)
This doesn’t make Obama “Bush 3″, and there is reason to believe that Obama is not entirely captured by this elite sentiment. But the fact that the Obama administration is staffed mostly by these same horrible elites is Obama’s responsibility.
The Fed didn’t create the mess.
While technically true, Summers had converted by the time Obama appointed him, and was advocating for greater regulation while acknowledging that he’d gone wrong during the 90s. Sort of like Greenspan’s testimony to Congress, except unlike Greenspan, Summers actually put his shoulder into the administration’s re-regulatory efforts.
While the Fed did not create the mess, and its actions in 2008-2009 may have saved the economy to some extent, it’s largely sat on its hands since then. The decision to re-appoint Bernanke in particular, while understandable at the time, is proving to be a huge mistake – it’s hard to believe that any of the credible alternatives who could be sitting in his chair right now would be ignoring the dual mandate.
The Fed’s policy since 2009 has been the most expansionist monetary policy in American history. It has included two rounds of QE, keeping interest rates at 0, and saying that they’ll stay there.
And I think blaming Helicopter Ben is misplaced. He’s not the problem; he’s one of the more expansionist members on the Board. A lot of people keep attributing the consensus position of the Board as a whole to him individually, because he’s the one who announces it.
Obama has the power to appoint the Fed board.
Subject to confirmation by The World’s Greatest Deliberative Body.
Not for recess appointments.
The blocking of Diamond was awful, the failure to nominate Diamond and like-minded potential governors during congressional recesses is a massive failure.
So we’ve now gone from “Obama has kept the people who created the mess” through “Obama appointed people who did not want to fix the mess” to “Obama has not appointed people to fix the mess” to “Obama has not gotten the people who would fix the mess into office.”
Just like we’ve gone through this same crab walk a thousand times before – and yet, the next time this subject comes up, we will once again begin in “Obama appointed the people who caused this mess!”
But Obama did all of those things!
He appointed people who caused the mess (Summers).
He failed to listen to the advice of people who had expertise to handle the mess or who had noticed the mess before it went into crisis (Romer, Bernstein).
He appointed people who did nothing to mitigate the mess until the crisis occured, and who have done nothing to speed recovery since (Bernanke).
He failed to appoint people who could speed recovery (recess appointments like Diamond).
recess appointments
W made over 100 in his first term , Obama about 35 so far
Timothy Geithner goes on the “people who helped cause the crisis” list too.
Singling out the Fed, while remaining silent on the SEC, as “causing” the meltdown through inaction is an exercise in selecting your data set to fit your conclusions.
So is ignoring the difference between Summers’ position on deregulation in 2009 vs. a decade earlier.
I guess if you’re using a sort of one-drop-rule reasoning, combined with some six-degrees-of-separation reasoning.
Obama didn’t use enough recess appointments when his nominees were blocked could, technically, count as “not appointing people,” I guess. Of course, we have to ignore all of them when we hold forth on his appointments.
Except, of course, when he did listen to them, but we’ll ignore those situations when we make a broad characterization.
The most expansionist monetary policy in Fed history is now “nothing.” Right, and why don’t Muslims ever denounce terrorism?
And now you’re going to acknowledge that the Fed has, in fact, adopted a very expansionist monetary policy, but say that they haven’t been expansionist enough – which would be a perfectly plausible line that you could have led off with, instead of going through exactly the same crab walk over and over again, and that you will go through the next time the subject comes up.
Why? Why do you make us wade through these preliminaries every single time this topic comes up?
Except that he DID appoint his appointees, like Diamond. You could have written a true statement, but again, you do…this. Over and over again, knowing exactly how the discussion will go.
How about next time, you get to the accurate, fair, plausible version of the argument before we get down to where there is no more nesting for the replies?
I am sick and tired of having to go through this pointless exercise ever time.
Two years ago, in April of 2010, President Obama nominated economist Peter Diamond to the board of the Federal Reserve. Four months later, after Republicans in the Senate blocked his appointment, Obama nominated him again. After almost a full year of waiting, Diamond gave up and withdrew his name from consideration last summer. Republicans’ complaint: Diamond, who won the Nobel Memorial Prize while waiting by the phone to hear about his appointment, didn’t have the monetary chops to serve at the central bank. The reality: Republicans in Congress want to deny Obama the ability to appoint any nominee who believes that the Fed should try to affect employment, one half of the bank’s dual mandate. It’s still happening.
On Monday, Louisiana Senator David Vitter placed a hold on Obama’s latest two Fed nominees, Jerome Powell and Jeremy Stein, tossing them into the same limbo where Diamond lived for two years and making it unlikely they’ll be confirmed by year’s end. “I refuse to provide Chairman Bernanke with two more rubber stamps who approve of the Fed’s activist policies,” Vitter said.
Herbert Hoover promoted and signed into law what may have been the largest financial stimulus programs in history in the form of the RFC; point being?
The Fed is to be judged on whether they succeed or fail, not whether they’re more expansionist than the other tightwads who came before them. And refusing to use means that are within your power to stimulate the economy is failure.
And it’s a mistake to think of the chair as one member among many; he’s primus, not primus inter pares. The Governors have some latitude when they meet as a board, but the Chairman effectively controls the FOMC – it’s his decisions are his. And that’s not to mention the soft power he wields – the markets hang on his every word, and if Bernanke casually mentions today that “Hey, would 4% inflation be such a bad thing?” we’d see results almost immediately.
If by “results” you mean “a deafening cacophony from the one percent and their front organizations, calling for his head on a pike,” then yes.
Again, point being?
That he’ll never do it.
Okay, Joe. Here is the evidence.
1) The Fed has a dual mandate for unemployment and inflation.
2) Unemployment is 8%, and inflation is 2%.
3) Interests rates (as well as borrowing costs for the US government) are already near zero
4) The Fed has announced that the status quo regarding interest rates will continue
4) Quantitative easing could inflate the monetary base
5) Quantitative easing is controlled by the FOMC
6) The chair controls the FOMC
7) The FOMC has not undertaken QE since 2010.
8) The Fed as a whole has not indicated that it considers moderately higher inflation desirable or even acceptable
From this I have concluded that the Fed, and Bernanke, are not doing nearly enough to help the economy, and has done essentially nothing at all since 2010. From your responses I gather that you believe that this makes me an asshole. So be it.
Who are you talking to?
This doesn’t seem to belong on this subthread, topically; you address someone who isn’t on this subthread; and you seem to be offering evidence for something that nobody has argued.
Has somebody been arguing that Fed policy to date has been sufficient?
Yeah, this is where you display your ignorance – in your rather confused belief that maintaining a 0% interest rate, and announcing the intent to do so for the foreseeable future, does not represent an expansionist policy. Seriously, you’re sitting here, talking down to me about how the Fed works, and you don’t understand that announcing a non-change of rates is a Fed policy, and one with significant implications. Perhaps you should take some time to look at some examples of how markets and politicians have reacted in the past to announcements of non-changes to the Fed rate.
No no, it is not “this” that demonstrates that you are an asshole. This just demonstrates that you don’t know a fraction of what you think you know.
It is a totally different set of statements you have made that make you an asshole. This argument just demonstrates that you haven’t followed the argument, and don’t understand the Fed very well.
Hey, I know this game! “Why don’t Muslims ever denounce terrorism?”
Uh, they do: here and here and here and here and here.
“Well, why don’t they do it more?”
If you think that the historically, record-breakingly pro-stimulus Fed’s actions haven’t been historically, record-breakingly pro-stimulus enough, then say that. Don’t make a false statement about the Fed adopting a do-nothing attitude, or not promoting monetary stimulus.
There actually is a faction that wants the Fed to do nothing, and to stop monetary stimulus. The Fed has, very dramatically, not followed this course – that’s not where the problem (to whatever extent) is to be found.
What you wrote was it’s largely sat on its hands since then. and that Bernanke is ignoring the dual mandate.
Neither of those statements are true.
I thought, based on your statement about “hands” and “ignoring the dual mandate,” that they were to be judged based on their adherence to your preferred policies. Instead, it appears that you are judging the degree to which they’ve adhered to your preferred policies by how well fiscal stimulus has worked, or “failed.” That’s a problem, intellectually.
Calling this Fed “tightwads” is indefensible from a reality-based perspective. Leaving interest rates at zero for years on end, and announcing your intent to keep them there for more years on end, is the opposite of a tight-money policy. Two rounds of QE is the opposite of a tight-money policy. There is no measure by which this Fed is anything by an extremely-loose money Fed. The objection is to the degree to which they have been an extremely loose-money Fed. This remains an unassailable, easily-demonstrated fact, even if you think they should be even more extraordinarily loose.
Discussing this Fed as “tightwads” who are unconcerned with employment is indistinguishable from discussing Obama’s foreign policy in terms of whether he wants to surrender to terrorists. It is a bad-faith exercise in ref-working that cannot be reconciled with the available facts.
How so?
The Fed COULD be doing much more to help people who need it. Unemployment is not an abstract number; it represents literally millions of people whose lives are being wrecked.
The Fed could help those people. They could help them today. They could do it without hurting others in any meaningful way. But they refuse to do so, because they care more about keeping inflation low than helping the people who are crying out for the dignity of work and who would benefit in real, concrete ways from a few years at 5% inflation.
This makes them tightwads. They may be adopting loose money policies but have made it clear they’ll only adopt them to the extent they can do so without hurting peoples enormous capital reserves. This is the equivalent of a plutocrat who founds a soup kitchen but refuses to pay his employees enough they don’t need to utilize said kitchen.
In the same way that calling people who gave a record-breaking check to a charity “tightwads” would be indefensible: it is a factually incorrect statement that inverts reality.
Noting that they could have written an even bigger record-breaking check does not make them tightwads.
You’re simply playing my favorite game:
“Why don’t Muslims ever denounce terrorism?”
“They do: here and here and here and here.”
“OK, but why don’t they do it more?”
No, it doesn’t. It makes them something else. Talking about this in terms of an imaginary opposition to expansionist policies gets the answer wrong. It leads the discussion in a useless direction.
I don’t like the Fed’s overemphasis on inflation either, but blaming it on this is just self-gratification. The Fed is just as bank- and wealth-oriented when it raises interest rates as when it drops them. If a Fed with a dramatically more-equal viewpoint on the dual mandate comes into being, it will be no more populist, and no less focused on banks and the wealthy, than the current anti-inflation Fed.
In the same way that calling people who gave a record-breaking check to a charity “tightwads” would be indefensible: it is a factually incorrect statement that inverts reality.
Except those people don’t have a mandate requiring them to donate to charity. The fed has a mandate to mitigate unemployment.
Let just add to this that one of Alan Greenspan’s great sins was keeping interest rates too low during the middle of Bush’s presidency – an action for which he has been roundly criticized among the left, on the grounds that he was being too solicitous of Wall Street.
Tight-money, loose-money: you can come up with an explanation for why any action by the Fed is pro-plutocrat. And it is! That doesn’t explain what’s going on now, though.
And it has adopted the loosest monetary policy in history in pursuit of that mandate.
I can see how your statement can lead to the conclusion that the charitable donors are more morally admirable than the Fed Board.
I do not see how it is supposed to refute the observation that the Fed has been, despite certain claims, implementing staunchly, strongly pro-growth policies.
The real discussion is not about whether the Feds are “tightwads.” The real discussion is about whether this very pro-stimulus Fed has been very pro-stimulus enough.
Someone who gives a record-breaking check to a charity could still be an enormous tightwad. Plenty of Republicans are active in charity while simultaneously working like madmen to ensure that they don’t have to become just a BIT less wealthy so that maybe people don’t NEED charity.
Those people are tightwads despite their charitable giving.
I have literally no idea how that’s relevant.
I am making the point that the Fed could be doing much more than are to help people while still remaining within both the letter and spirit of their dual mandate, and that they have chosen not to do so. Are you saying that’s not true? Because I’m pretty sure it IS true. I mean, you’ve had Krugman howling that from the rooftops for months.
Er… the Fed could be undertaking significantly more expansionist policies than it is. They have indicated they are not going to. This doesn’t make them opposed to “expansionary policy” per se, but it does make them opposed to “expansionary policy that is sufficient to the needs of the situation and would put actually abrade capital in some way.” There’s a distinction there, to be sure, but I’m not sure why I should be charitably inclined towards people who are in favor of turning a garden hose on a house fire, but thing using a fire hose is right out of the question.
Okay, I’m legitmately no-snark interested here. You’re saying, if I’m reading you right, that you think the Feds overemphasis on inflation isn’t rooted in their desire to never hurt capital if they can possible avoid it. In that case, what IS the reason for it? Because I’ve never really looked beyond the obvious one.
This is manifestly true, but again, not sure how its germane. Yes, the Fed is bank and wealth oriented. I take this as a given in any discussion about the Fed. It’s sort of why I’m constantly angry at them.
Well, by definition, a Fed with a more equal viewpoint on the dual mandate would almost HAVE to be a bit more populist than the current Fed. I suppose there’s a possibility we could get a Fed more concerned with the dual mandate because it was filled with dispassionate robot-men, but my experience has been that people who care unemployment, even rich fucks, usually do so because they find it morally objectionable and harmful to society when people who wish to work cannot work.
Your theoretical Republicans may be tightwads, but it is not their charitable giving that makes them so; it is, as you say, another measure of their behavior.
Since we don’t have two axes on which to judge the Fed’s action, but are looking at their monetary policy itself, we have only that one measure to go by. Calling this Fed “tightwads” because of their monetary policy is like calling someone a tightwad because they wrote a record-breaking check to charity.
You are accusing someone of not doing something, when in fact, they have done it quite a bit. Faced with this fact, you have retreated to “But that much is not good enough.”
See, for example, your conflation over the rest of your comment of my “The Fed has taken record-breaking expansionist policies” by accusing me of believing the Fed cannot be taking even more expansionist policies.
Yes, they could; and they could denounce terrorism more, too.
I’m not asking you to be charitable. I’m asking you to be truthful and fair, and not make things up. I don’t think I need to mount a grand defense about why I want you to do this; it really should be the default.
An incorrect ideology about monetarism and the dangers of inflation. The inflation doves are correct, and the hawks wrong. This has nothing to do with sentiment about poor people. When the economy is going great guns in a few years, the inflation doves will be your bad guys who don’t care about the poor, and the rate-droppers will by your allies – even though they’ll be the same people.
Your definitions are screwed up.
.
The Fed has not undertaken any expansionary policies since QE2 ended in 2010. So what false statement are you referring to?
We’ll leave aside your bizarre and irrelevant Muslim terrorist tangents. I’m not sure anybody here, including yourself, knows what kind of point you are trying to make.
The real point is that regardless of what the Fed has done in the past, or what other Feds have done in the past, it is currently failing. They are failing because they are not doing enough to expand the economy. Nothing you say contradicts this.
Shorter Joe: The Fed gets an “A” for effort, despite 8% employment and 2% inflation.
False. The Fed has kept interest rates and zero and announced its intention to keep them there, come hell or high water, several times since then. Since you clearly recognize, given your “4%” argument earlier, that the Fed’s statements have a meaningful effect, you cannot now claim that they have taken to expansionary policies.
Yes, Craigo, since you can’t follow something, that means it has no meaning. eyeroll. Oddly enough, though, I was able to explain it quite easily to Murc before you decided to throw in some pointless bluster.
Perhaps that’s because I haven’t attempted to contradict that point, but rather, to offer a more plausible explanation for how and why they have failed.
I would be happy to re-explain it to you, but at some other time, when you aren’t in internet-asshole mode.
Actually, I take this part back. The Fed is not “failing” unless we’re grading on a A or F scale.
The Fed could adopt better policies, but how much better, and how much they could accomplish, is a very open question.
Obviously, to merely look at the unemployment rate and attribute it entirely to the Fed’s performance, and then claim that the degree to which the Fed’s policy could be better would solve the unemployment problem, is quite immature thinking.
For one thing, it lets this Congress and their (actual, not made-up, genuinely tight-wad) failure to enact fiscal stimulus off the hook.
There is also the argument to be made by some crazy people that the Fed is not, in fact, all powerful, and that the inability of the strand of spaghetti to move the elephant as much as you’d like is not, in fact, directly attributable to how hard Ben Bernanke is pushing the pasta.
Joe, please look up the word “undertake.” Then ponder how “keeping interest rates low” can be considered “undertaking” anything.
And again, this is an irrelevant. As has been pointed out to you, there are other ways to inflate the economy aside from interest rates.
I didn’t say I couldn’t understand your pointless tangent. I said it was bizarre and irrelevant.
I’m sure there is not a single person this blog who isn’t aware of the irony of you accusing someone of being an “internet asshole.”
Whoa, whoa, whoa. Back that truck up.
What, precisely, have I accused the Fed of not doing that they have in fact done? I request a cite, because it seems like my claim (‘The Fed could be doing so much more to help people, but is not’) is manifestly true. If I have made a claim that’s not this (or you are referring to a different claim in which I say someone hasn’t done something they have in fact done) I’d like to know about it.
I accused you of this? Again, cite please.
My fairness is, of course, a matter of constant debate, but if I’ve been less than truthful (as opposed to merely wrong) anywhere here, I’d like to know where.
Okay, I think you’re wrong about this; I think the Fed is in fact staffed with a lot of people who don’t give a shit about the poor. But your viewpoint is both logical and possible.
Oh man, you’re so much more optimistic than I am. I’m anticipating another four years of Republicans kneecapping the economy from their perch in the House any way they can.
Uh… okay, how? People who care more about unemployment than inflation almost gotta be a bit more populist than people who are all “hard money 4ever.” Maybe not a LOT, and maybe not enough to go from “more populist” to “populist”, but still more.
“please look up”
Internet.
Asshole.
Mode.
If you think the difference between our positions is the definition of “undertake,” you are as immune to comprehension as Jorge is beginning to realize.
Among these ways is the example I gave: talking about future plans for interest rates, an action the Fed has undertaken (internet asshole) to try to inflate the economy.
Um…
Perhaps I need to look up “understand,” too?
Yes, Joe, when people point out when you are wrong, it is because they are assholes. It is unsurprising that you apparently meet a lot of assholes.
Adopting an expansionist monetary policy to try to decrease unemployment. If you think I have mischaracterized your argument, and that you actually do agree that the “tightwad” fed has adopted an expansionist monetary policy in an effort to reduce unemployment, than simply tell me that.
OK, this time I will.
That’s not the question. The question is whether you think that the inflation doves at the Fed care about the poor, while the inflation hawks do not. You’ve indicated that you do – that it is the anti-inflationists who do not care about the poor. This is precisely what you say in your next question:
And this statement is still false. You are assuming that everyone shares your opinion about the relative pain of inflation vs. slow economic growth on poor- and middle-class people. I think you are underestimating the effect that the pain of 1979-1980 inflation had on the thinking of policymakers. They look at Paul Volcker as someone who did more than any Fed Chair as far back as they can remember to help ordinary people.
No, Craig, you’re not being an asshole. Just look at the awesome, substantive contributions behind “look up undertaking” and an argument-free assertion “you’re wrong.”
At this point, I’m not sure if there is any area of discussion where you shouldn’t look a few things up.
At various points, you’ve
1) Defended the Fed’s neglect of the dual mandate by invoking the “A for effort” argument
2) Brought up interest rates repeatedly in a discussion of quantitative easing, despite the fact that they are kinda different things, controlled by different Fed entities
3) Defended a lack of new expansionist policies by bringing up lack of change in the interest rates
4) Claimed that Fed statements saying that the status quo regarding interest rates will continue is “undertaking expansionist policy”
5) Demonstrated an ignorance of how the FOMC works by claiming that Bernanke can’t get QE3 because he’s somehow being outvoted by a “majority”
This is because you’re in Internet Asshole Mode. It will pass.
1) Haven’t defended the Fed’s policy, but rather, explained it. I remember when blunt-headed Iraq hawks couldn’t figure out the distinction, either.
2) You deciding it would be convenient to limit the discussion to Quantitative Easing does not make the discussion solely about QE. I realize that talking about other actions the Fed has undertaken besides QE refutes your point that that haven’t undertaken any such actions. Too bad.
3) Mr. Fed expert doesn’t think that leaving rates where they are is a policy. He also doesn’t think that the Fed Chair talking about future action is a policy. Clearly, I need to go look some things up, because I have no idea how the Fed works. Lol.
4) This is the same thing as #3. You are melting right down, Craig. Go get some fresh air.
5) Already answered below. Your “rebuttal” was to use the word “literally.” You are making it quite clear, though, why any argument involving someone wanting to maintain comity and consensus in order to maintain his influence is so difficult for you to follow.
Well, I wasn’t sure if that was what was happening until now.
Yes. You have mischaracterized my argument. Nowhere in this thread have I argued even for a second that the Fed hasn’t adopted expansionary economic policy, and I don’t believe that any of my statements can reasonably be read that way. My argument on the main point is this; the Fed’s current measures are insufficient. In addition to that they could be doing more. They have chosen not to.
Now, evidently we disagree on the reasons and terminology for this. I feel tightwad is appropriate, because it is in their power to help people with little to no downside and they refuse to do so. You seem to think that their (insufficient) actions are enough to warrant them not being tarred with that brush. respectfully, I disagree.
… it is? That’s not the question in my mind. The question in my mind is ‘should we blame the Fed for not doing everything in their power to get people back to work?’
Correct. I don’t think the anti-inflationists care about the poor. I may be wrong about this; maybe they DO care about the poor and they’re just idiots.
Okay, I think I may have located our disconnect here, and it has to do with motive more than action.
Lemme attempt to break this down. I think that if you care more about unemployment, that is, about people having jobs and money and dignity and being able to support themselves and their loved ones, than you do about inflation, you are acting in a more populist way than someone who thinks the other way around. You may not, necessarily, BE a populist, but everything else being equal you’re further along the scale.
You seem to be arguing that this is irrelevant if the inflation hawk takes his position out of a genuine, passionate belief that the Inflation Monster will destroy us all if released from its chains. This is an interesting point to discuss; it would seem to indicate you have a much higher opinion of the Fed than I do.
You’ll have to forgive me, Murc.
Somehow, I managed to interpret your repeated statements that this is a “tightwad Fed” that “doesn’t care about unemployment,” written in rebuttal to my argument that they are engaged in an aggressively expansionist monetary policy, as an indication that you did not think they were engaged in an extremely, aggressively expansionist monetary policy aimed at lowering unemployment. Still, I hope you can understand how I might have missed some of the nuance of your description.
I have repeatedly, explicitly, in black and white, written this myself on this thread, over and over.
Yes, it is. You have repeatedly discussed the anti-inflationists on the Fed and their lack of concern about the poor, in contrast to “inflationists” – those who would implement more expansionism – who, allegedly, care about them more. You went even further, claiming that by definition the ones who are more concerned about expansion are more concerned about the poor than those who care more about inflation.
Is it possible that having this question in your mind caused you to make statements in other areas, such as what a tightwad Fed looks like, or whether anti-inflationists care more about the poor, that were not actually about those topics, but mere proxies for this point?
You’re defining your way to your conclusion with some rhetorical tricks. Do you imagine that people who are concerned about inflation don’t think that it has harmful effects on actual people? Why don’t you care if inflation puts little old ladies on fixes incomes into lives of street level prostitution, blah blah blah?
I think you should have read to the end of my comment, because there actually is a very plausible historical reason to believe that, no shit, there actually are people involving in central banking who, rather than being moral monsters, actually disagree with you.
You don’t know what you’re talking about, just like below, when you claimed that the other members of the FOMC don’t set policy, or that no market watchers think they do.
Of course keeping rates at 0, and signaling the intention to keep them there for the foreseeable future, is an expansionist policy. I don’t know where you get your information from about Fed matters, but you need to go elsewhere.
First of all, you’re wrong about that as a general rule. The market often, including during this recession, responds positively to the Fed not changing the rate when there are expectations or concern that it would.
Secondly, the Fed’s statements about its intention to maintain that low rate into the future are, indeed, a major expansionist policy. They are treated as such throughout the financial world, and were universally discusses as such, including by Paul Krugman.
You could say that, in August 2012, keeping the rate low and saying it will stay there has been baked into the pie, and is no longer functioning as an an expansionist policy.
But that wasn’t the question; the question was about after QE2 in 2010.
joe from lowell, 12:14 pm
joe from lowell, 4:14 pm
Maintaining the status quo is not undertaking expansionist policy. Announcing the status quo will continue is not undertaking expansionist policy. There is effectively nothing to do with interest rates that can be expansionist at this point – whatever good they can do has been done. Rates have been low for several years now, the market is used to them, and there is simply nothing that can be wrung out.
Raising rates would be catastrophic right now – but not doing harm is not the same as doing good. Refraining from undertaking a deflationary policy is not the same as undertaking expansionist policy.
You seem to think that a doctor who does not kill his patient is by definition helping him.
I don’t understand why this would be so hard to believe or imagine, since it’s been that way for decades.
For decades, we’ve had exactly two Fed chairs: Alana Greenspan and Ben Bernanke. The one before them, Paul Volcker, did indeed take the mandate seriously – and was promptly replaced by Reagan.
Which is part of my point, actually. In this country, among the political and economic elites, there is an ingrained culture that makes it more or less impossible for the Fed to take the unemployment half of its dual mandate seriously.
You said any of the credible alternatives who could be sitting in that chair wouldn’t be ignoring the dual mandate. I’m saying that in order to be considered a “credible alternative,” one must have a mindset that privileges inflation-busting over unemployment-fighting. Your comment does nothing to contradict this.
I’m still not quite sure what the hell you’re talking about. Joseph Stiglitz would have been the frontrunner to replace Bernanke – are you saying he’s not a credible alternative?
Not at all. I’m saying he never would have been selected, precisely because he takes unemployment more seriously than inflation.
It’s really not a hard concept.
Replacing to Craigo, below
Stiglitz may have been a serious candidate, but are Senate Republicans serious?
This comment is an exercise in exonerating Wall Street and the financial industry as a whole of the blame for the financial meltdown, while purporting to advance a progressive argument.
None of the people who got us into the banking mess have been “kept” by the Obama administration. Not a single CDO trader, mortgage-bundler, or other Wall Street high wire performer (you know, the people who actually got us into the banking mess) is with the Obama administration.
What this comment does is attempt to blame the Fed for the mortgage meltdown and financial collapse – goldbug Austrian wingnuttery that lets the people actually responsible for the problem (those untouchable private sector John Galts) off scott free.
This is a ludicrously uncharitable reading of my statement.
Of course the crisis happened because of bad actors in the banking sector. The purpose of various government regulatory bodies is to oversee the banking sector, and both the Clinton adminstration in the 1990s and the Bush administration in the 2000s couldn’t be bothered to do their jobs because they thought our Galtian overlords knew best.
The Fed pushed both the tech bubble and the housing bubble. They could have attempted to moderate these bubbles and moderate the ill effects of the crash, but they didn’t.
When the Bush adminstration allowed horrible abuses in the mining industry, they weren’t the first party responsible for the crimes of evil mine owners, but they were responsible nonetheless, in an analogous fashion to how banking regulators and their administrators bear responsibility for the finance sector’s crimes in the 90s and the aughts.
Actually, it’s response to Bernard. I have trouble following this nesting layout, too.
Oh, I gotcha.
Though I do basically agree with that point, when construed generously.
It is precisely this generosity that Bernard wants to take advantage of. That is what comments like his, on liberal web sites, are written for.
Maybe.
I think that advocating against voting for Obama, via stupid Bush-Obama equivalences, is indeed stupid.
I think that one of the biggest problems in contemporary political discourse is the lack of voices on the economic left. Obama deserves lots of criticism for his economic team and economic policy, and this rarely gets aired because of the structuring of political discourse. I’d rather pull out the useful part of the comment.
But it’s not just the anti-Obama advocacy that’s stupid.
The effort to single out the Fed as the prime mover behind the financial meltdown, while ignoring Congress, the SEC, and oh yeah Wall Street is equally stupid.
Some people do this because they are goldbug cranks. Others do it in order to create a false impression of the merits and responsibility of the different political factions.
Ah, yes, the rarity of people criticizing Obama for his economic policy. Why, it’s like a blackout!
There is no useful part of that comment. There is some useful argument that bears a superficial resemblance to what Bernard wrote, but there is nothing useful about his comment, or about conflating it with your own.
And of course the Obama DOJ is ferociously pusuing the miscreants.
Miscreant is an anagram for “Miner’s cat.”
We’ve have stopped discussing the topic and are just free-associating now, right?
i enjoy watching teh Republicans go nuts. about the only thing i can say i enjoy about over Lords and Masters. The Democrats are so lame and ineffectual pretend bullies, unlike their Republican owners. not sure why the hatred for the Black Obama is so intense, Racism!? Not in America, we are post racial now!! lol. Obama is half white, too. it is fun to watch them blow gaskets, though. and proves how easily perverted they appear.
about the only thing worth watching from the Fascist Corporate Government is this constant “kenyan muslim usurper” attack meme from the rabidily fascist Republican/Democratic US Government. i guess this what dying old white men do, knowing they are losing power over teh rest of us, and the blacks and browns.
not a pretty picture, but at least it is entertaining. Bread and Circuses.
Plenty of ‘Circus’ act, but with global warming, and the droughts and floods, soon, there may be little or no ‘bread.’
Then, the “Circuses” won’t seem so funny anymore.
They Republicans aren’t angry because they’re being bullied.
They’re angry because they don’t get to bully others.
I am not convinced that Obama can replace DeMarco nearly as easily as the linked article suggests. It’s talking about using the president’s recess appointment power, and I don’t think there is a plausible argument that Congress is in recess right now.
How about firing him and leaving the position open? Is that an option?
No.
He’s civil service–he can only be fired for cause.
What about a lateral movement? As a civil servant, can DeMarco be transferred to, say, the GAO, leaving the acting Director slot open for the guy one rung below him? (Who may or may not be amenable to fixing the economy.)
I’ve read in a few places that this is a perfectly legal strategy for handling this situation.
Whether it’s politically doable, who knows.
Well, if the Senate is going into recess, I guess it doesn’t matter. Interesting academically though.
but the Senate will be in recess next week
and the OLC has opined that the president has the authority to make recess appointments even if there are pro-forma sessions
I still think it’s a mistake to attribute the position of the Fed Board to Bernanke individually, when he seems to be firmly in the outvoted expansionist wing.
What’s particularly scary is that there seems to be a faction on the board who thinks that their policy has been too expansionary, and has been not only opposed to further measures, but has been attempting to throttle back since 2010.
Along those lines: the replacement of Ben Bernanke with someone who is even further towards the inflation-dove end of the spectrum would probably have resulted in a tighter monetary policy, not a looser one.
Bernanke’s status as the incumbent Fed Chair, someone the rest of the governors know and respect and have a good working relationship with, increases his ability to move the board as a whole in his direction. A newcomer who lacks this standing, and who is arguing for a position even further away from the general consensus position, would likely be less able to drag those swing votes over to a pro-expansion position.
You clearly don’t understand how the Fed works. The chair, for all intents and purposes, is the FOMC. Most of its members are bound to support his proposals.
It’s not up to the chair to move the Fed. The best they can hope to do is move him.
People telling me I don’t understand something I understand quite well is generally a sign that there is no further point engaging them, because they’re going to go into a little dance over some infinitesimal point so they can keep insisting on some irrelevant technicality.
And because it indicates that they are going into internet asshole mode.
The Chair’s actions to maintain comity and consensus, and the desire to maintain that, remain in place across the formalities of that day’s meeting. Alienating board members with unpopular actions on the monetary committee will lose them on other fronts as well – after all, we’re talking about the same set of people, even those who aren’t actually in the room on Tuesday, but are on Wednesday.
I’m sure you would be Mr. Bull in a China Shop if you were Fed Chair, and do a little “In Your Face!” dance in the monetary committee meetings, but that fact that Mr. Bernanke does not take FOMC actions outside the consensus like you might does not, in fact, demonstrate anything about his own policy positions. It demonstrates something about his administrative and leadership habits; but even moreso, it demonstrates something about the overall makeup of the Fed.
The majority of the FOMC is literally bound to support the Chair. That’s an “irrelevant technicality.” Right.
Did you sense a whooshing sensation on your scalp when you read my comment about the value of consensus across different meetings?
In a discussion about why the Fed Chair would want to maintain consensus despite not requiring it for a subset of Fed actions?
Yes, yes it is an irrelevant technicality.
Because the Fed chair controls the committee which controls QE, the Fed chair cannot be blamed for a lack of QE, because this may potentially upset members of a different entity.
The fact that individual board members have much, much less power than the chair, and are thus much, much more concerned with influencing him than the other way around, is completely irrelevant.
It’s the Joe Paterno defense – he’s too powerful to have any responsibility.
Yep. Whooshing sensation on the scalp.
A Venn diagram of my argument and your explanation of it:
O O
Craigo doesn’t understand why the leader of an organization – on that has traditionally operated on consensus – would not ram policies down the throats of other members, even when that leader also operates in areas that do require him to actually have majority support from people whose opinions are partially determined by his actions and treatment of them.
Craigo doesn’t just disagree with his decision not to go ahead and ram the policy down their throats. He doesn’t even understand that anyone could think that way.
I understand why someone would think that way. If he didn’t understand, for example, that his failure to take action would lead to lives ruined, a spike in the suicide rate, and many millions more suffering economic hardship of varying degrees.
If instead he thought it was more important to maintain good relations with other people on other boards, because he was deeply blind to the actual effects of his inaction, then he might weigh the issue that way.
Because losing a working consensus has no implications for the public good whatsoever, and only influences the quality of the gifts in the Fed’s Yankee swap.
Joe, what you describe – a Fed chair who is more concerned with what the board thinks than the other way around – just does not exist. No market watcher believes that it exists. The man who wields as much power as the rest of the board put together does not go to them – they come to him.
Bernard is not part of any “outvoted” expansionist bloc – he just doesn’t believe that further expansion is necessary.
The part about the board not caring about what the Chair thinks? That is entirely made up on your part.
I haven’t written a single word to the effect that the rest of the board doesn’t care about what the Fed Chair thinks, nor even suggested such a thing.
As such, I don’t really fell any compelling need to defend that position; nor do I find your criticism of that decision to be a compelling reason to re-engage with you about anything I have written.
Although perhaps you can explain to all of the poor, deluded souls on this thread who blame Obama’s lack of recess appointments for the slow growth where they went so wrong.
Oh, wait: you don’t know what you’re talking about.
Nope, no market watchers at all (certainly not the Wall Street Journal) think that the other members of the FOMC matter:
Regarding DeMarco’s “moral hazard” problem:
1. I doubt that any of the people sagely nodding their heads at the Post and WSJ objected to the moral hazard of TARP.
2. DeMarco’s own agency predicts that expanding HAMP-PRA would be a net gain for taxpeyers, again like TARP
3. The problem is hugely overblown
3a. All applicants must submit paperwork demonstrating that financial hardship. Anyone who can make payments and defaults just to get into the program will be unpleasantly surprised.
3b. Forgiveness is the last resort; FHFA also has the option of granting forbearance.
Moral hazard, like accountability and rule of law is strictly for
suckersthe 99%ers.Predators need space to soar and dive to catch the prey. The prey just need to STFU and wait for the predators to catch them.
I agree with Scott on the last bit, that Obama has moved with puzzling slowness on the housing issue. Aside from the merits, this is something that really affects voters, and purely as a matter of electoral self-interest you’d think that he would have wanted to push things that would make him look good to them. Doing something about DeMarco would be a good start, but maybe putting Geithner in the file room counting paper clips (instead of telling Obama to go slow or do nothing, as he’s done the last 3 years) would be even better.
I’m not happy with Geithner’s performance overall, but I’d like to note that on this particular issue he’s fully onboard.
Obama has been slow on everything. And what he hasn’t been slow on (like appointments) he’s been naive (ex. Bernanke, Geithner, Summers). Late, slow, constantly pivoting to jobs (where was he before the pivots?).
He’s a far better than the nihilistic alternative but he’s essentially a mediocre president doing pretty safe, uncreative stuff in a plodding unimaginative conventional way.
pretty safe, uncreative stuff
Because endorsing gay marriage, getting a (flawed) health plan through Congress, ending DADT, and having the EPA regulate greenhouse gasses are all safe and uncreative policies?
Meanwhile, appointments – appointments! – are the one thing he hasn’t been slow on.
Yes, they are. After 3 + years there better be some things a president can point to. The fact that there are things Obama can point to does not make them creative, unconventional, or swift.
“Late to housing” “Pivoting to jobs” those are pathetic things to be saying in 2012, or 2011, or even 2010. I’ll vote for Obama, but I have no delusions about him – he never grasped the depth of the economic issues facing the regular folks or the urgency required to address them. HAMP anyone?