Given that economic cycles are largely driven by monetary policy, it’s always a bit sick-making to hear a chairman of the Federal Reserve calling for a fiscal solution to avoid a recession. Federal Reserve Chairman Ben Bernanke just endorsed a fiscal stimulus package, just as long as it would be implemented “quickly.” He said a stimulus package would give the Fed more tools as it works to avoid an economic downturn. At certain times he seemed to be talking from another planet, noting that it was important that a stimulus package not lead to a loss of “fiscal discipline.” Has he even listened to the spending plans of our leading presidential candidates? Fiscal discipline is long gone, baby, and it’s not likely to make a comeback any time soon.
It’s hard not to look at this as Bernanke trying a little CYA in advance. Later, when the stimulus package becomes a spending boondoggle, he can say: “Look, I warned you people. This isn’t what I called for. So this isn’t my fault at all.” He’s clearly been reading Alan Greenspan’s memoirs.
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Where is Bess and her giant man hands?
clearly a little cya was in order. this guy has been getting bitch slapped in the press for the past few months. as I sit here and listen to him speak, I sense the slightest bit of insecurity. even the woman who stated that he was the ceo of goldman (who do we have in congress?) made her comment with confidence. man up benny boy and lay down the bernanke law!
He needs to grow a pair.
Now the head of the Fed is looking for a stimulus package from the politicians? Asking for a quick-fix essentially? What a douchebag. He needs to stop trying to appease the hippies that don’t understand what going on anyways.
Johnny quit rolling fags in the bathroom!
Fed is so clueless. They should just raise rates by 200 basis points, take out our entire banking system, crash housing, cause a global depression and get it over with. How is it that 85% of the population knows how bad it is out there and our own Fed only now realizes what everybody else already knew? THEY KNOW NOTHING!!
I like bernanke, but this whole “I am not going to comment on x, y, or z” is playing right into the fiscal idiot’s hands.
1. Giving people $250 (~$100b) will not “stimulate” the economy. One-offs have no effect on economic decisions. If they did, then why doesnt the Fed just randomly drop $100 bills around the streets every so often to ensure people are spending. People base spending on FUTURE income expectations, not current expectations. What happens once that $250 is spent? Nothing. People will go back to being worried about the economy and…dear god…perhaps saving money for the future.
2. This idea that we can remove the cyclical nature of the business cycle is absurd. Everything in nature is cyclical. What do we do next, tell trees not to die in the winter because it’s nicer when they’re in full bloom? No. Why not? Because trees couldn’t survive unless they turn over their leaves. Same thing goes with consumers. A downturn would teach people that the economy CAN NOT always be “nice”, you have to save for future events, and you should take advantage of strength when it’s there.
3. We can not keep telling people that whenever something bad happens that Poppa Bear USA will be there to give them money. It’s that kind of thinking that got us into this mess.
4. How does anyone expect $100b in a $13t economy make a DENT?!
wow.
I just want to go on record and say the critics of Bernanke are the real fools. They want Bernanke to irresponsibly attempt ot bail them out of their excesses over the last few years. The problems in the market are not from Bernanke raising rates too high (remember he was rounding criticisized for his initial “pause” in hikes) or Bernanke cutting rates too slow (many are still pissed at him for rewarding the “bad actors” in September with his initial 50bp cut).
The problem in this market stems from an extremely vocal minority of “bad actors” indulging at the exaggerated punch bowl of easy credit (remember Bernanke kept raising rates in the face of the all too easy credit market trying to slow these “bad actors” down). Bernanke/The Fed didn’t write “no doc” mortgages. Bernanke/The Fed didn’t repackage these subprime, “no doc” loans into investment vehicles and then shove them down investors throats (CPDOs are going to drive IG to zero!) while threatening to exclude them from later deals unless the investor buys them (Underwriters/bankers do that? I’m shocked, shocked! said Captain Renault). The Fed didn’t refuse to appropriately mark down these investments in June/July/Aug/Sept when banks willfully overstated the value of unsaleable assets when “mark-to-model” was really “mark-to-make believe.” The Fed doesn’t spend irresponsibly like the incompetents on Capitol Hill. The Fed didn’t refuse to cut the AMT or marginal tax rates (which would stimulate the economy).
Bernanke/The Fed are not the problem. The unethical, willfully blind “bad actors” who drank from the easy credit trough for far too long and got fat off mortage underwriters who neglected their fiduciary duty are the problem.
And now these pathetic “bad actors” scream with the rage of a drowning man because Bernanke/The Fed aren’t irresponsibly giving the baby its rate cut bottle.
What a laughably pathetic lot of bitches . . .
Sure he’s calling for fiscal policy. The kind of interest rate cuts the US needs would bring Weimar Republic style inflation. I’m getting long wheelbarrows here.
@12:14 Agree. Where is the ire that should be directed to that looser Bush and his series of incompetent Treas Secs. Latest one is excluded from my ire, but the hole is already so deep even he’s having trouble getting out.
Anonymous @12:20. While I thank you for agreeing with me (clearly demonstrating a certain amount of wisdom). However, please keep as much politics out of this as possible. It is not any Treasury Secretary’s fault we are in this mess. What the White House can be fairly blamed for is failing to enforce fiscal disciple in then crooks on Capitol Hill.
It’s the Congress’ ability to control spending during the recent economic expension (although in recessionary times, deficit spending is neeeded) and cut real rates (not one-off, stop gap, rabates or credits) that can save this market. Republicans had 4 years to get rid of the AMT (among other needed tax reforms) or pass a balanced budget. But the incompetent boobs were too busy feeding at the pork barrell troughs to lift a finger gto stave off the current problems.
Now the Democrats are no better. They derided the cuts in marginal tax rates and play class war fare with “tax cuts for the rich!” and rile their base with threats to roll back all the Bush tax cuts (yea, that’ll “stimulate” the economy right into a Great Depression).
The blame lies on both sides of the aisle with the criminals on Capitol Hill as well as the White House’s unwillingness to enforce ANY fiscal discipline on these crooks. In 2006, I openly campaigned for a “Vote None of the Above” in the congressional elections (and I am big time conservative, so I theoretically had a lot to lose with the GOP in power). But those crooks needed to get flushed out (as do the current ruling class of Democrats).
Sadly, this country is short on leaders in the political class, and the phonies campaigning across the country to a man (or woman) spell economic doom.
And to think, we’re the last best hope for mankind . . .
I weep bitches.
@investorcluzo what who/when said bernanke was the ceo of gs?
I’m not writing a novella here, but saw a headline cross my screen earlier that went something like “Bernanke: Moral Hazard is not a Concern”
In the immortal words of the Geico Caveman:
Uh, what?
@11:17 @1:02 She was obvioulsy confusing him with Corzine. They both have beards plus Bernanke is from Princeton, where the NJ govs mansion is. Honest mistake….if you’re an idiot
I propose that we refer to those who downplay risk as the “Dukes of Hazard”. This should give the Carney Crew some additional material… Yeehaw!
@1:45 yes but who was it WHO WHO WHO? we must positively identify the source of this idiocy
i’d like to know as well
Anonymous @ 1:45pm “obviously confusing him with Corzine” ?????? Come on guy, you’re smarter than that. As Bernanke SAID, she was confusing him with Treasury Secretary Paulson.
And who was this wrong minded scape-goating mental giant?
Rep. Marcy Kaptur (D-Ohio)
damn, damn, damn…James! thank you dave, she was indeed confusing uncle ben with paulson. corzine? c’mon now, he’s not part of the president’s inner sanctum.
@ Anon 1:45 – I believe the misidentification was from Congresswoman Marcy Kaptur (D-Ohio), or rather her ill-briefed staff since she was reading her question (having to do with profiteering from fatcat investment bankers and whether they should give back their bonuses) from prepared notes. Pretty hilarious actually. Bernanke called her out, said she was mixed up with Treasury/Paulson. She then said “well what was your last position?” Reply: “I was CEO of the economics department at Princeton.” Score 1 for Ben. (He needs the points…)
What makes you think that economic cycles are driven by monetary policies? That’s just absurd. Monetary policies certainly exacerbate cycles (the Fed is no stranger to this), but cycles are driven by crowd psychology. In the case of the Fed, the current boom cycle (or should I say past boom cycle) was extended and inflated by Easy Al, but the cycle itself had roots much more significant than anything the Fed can do.
@3:14 I move that we all conjure up some collective pity for the poor staffer who confused Bernanke with Paulson. He’s probably groveling as we speak. Come on, havent you been there? 11:30 pm and you’re delerious and typing quicky and confuse say Bayerische Landesbank with Bayerische Vareinsbank. You go home, happy with your brilliant output and then the next morning comes and the wrath of the entire firm starts coming down on your poor sorry a**.
When Bess’ posts include “baby” used colloquially, for a split second it allows me to pretend that somebody cares about me and that I’m not an excel monkey. When Carney uses it it’s just plain unsettling.
Watch Bernanke get the zinger off here:
http://www.youtube.com/watch?v=wnPnLvsl6Aw
monetary policies exacerbate cycles? they are supposed to decrease the volatility of cycles.
@ eats, shoots, leaves…great work with the youtube link, I applaud your efforts: timely and accurate, clearly you aren’t an analyst at one the i-banks. let me guess, hedge fund?