Bernanke is said to support stimulus (NYT): “If Mr. Bernanke opposed Congressional action on the ground that spending increases and tax cuts would increase the budget deficit, the Fed might restrain its own effort to stimulate the economy with lower interest rates. Mr. Bernanke wants to keep the Fed out of political jockeying, but he is also wary of endorsing measures that could aggravate the government’s long-term fiscal problems…. He has long made it clear that there are times when it makes sense for the federal government to run higher deficits to head off an economic downturn.”
Source link: http://blog.mises.org/7665/the-myth-of-the-independent-fed/
The Myth of the Independent Fed
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We really are approaching Idiocracy status. Here’s Nancy Pelosi’s economic wisdom:
“House Speaker Nancy Pelosi, D-Calif., who was expected to be on the conference call, said Thursday: “We have to spend the money, invest the resources, give the tax relief in a way that again injects demand into the economy, puts it in the hands of those who need it most and into the middle class … so that we can create jobs.â€
As if confirmation was necessary:
“President Bush and Federal Reserve Chairman Ben Bernanke on Thursday embraced calls for an economic stimulus package to avert recession. Bernanke said such a plan should be aimed at quickly getting cash into the hands of people, especially those with low and moderate incomes.”
Read full “modern sofisma” here.
I’m off to buy some gold.
It is interesting that the Fed has finally admitted to worsening the Great Depression. But now I note that they are blaming their error on not rejecting the gold standard entirely. Is this a feasible explanation?
If we have to have a Keynes policy can we have it all the time, not just when it suits?
At least Keynes said that debts run up in the downturn should be paid off in full when things go well, and I never see that happening.
To quote that article
“he Fed’s willingness to give a nod to fiscal stimulus is important. Many lawmakers will not support action without the chairman’s blessing, and the double dose of stimulus that the Fed and Congress are considering must be carefully calibrated.
If Mr. Bernanke opposed Congressional action on the ground that spending increases and tax cuts would increase the budget deficit, the Fed might restrain its own effort to stimulate the economy with lower interest rates. ”
The US economy is in grave difficulties!! I think these will become much more prevalent during late 2008/mid 2009
To quote that article
“he Fed’s willingness to give a nod to fiscal stimulus is important. Many lawmakers will not support action without the chairman’s blessing, and the double dose of stimulus that the Fed and Congress are considering must be carefully calibrated.
If Mr. Bernanke opposed Congressional action on the ground that spending increases and tax cuts would increase the budget deficit, the Fed might restrain its own effort to stimulate the economy with lower interest rates. ”
The US economy is in grave difficulties!! I think these will become much more prevalent during late 2008/mid 2009
To quote that article
“he Fed’s willingness to give a nod to fiscal stimulus is important. Many lawmakers will not support action without the chairman’s blessing, and the double dose of stimulus that the Fed and Congress are considering must be carefully calibrated.
If Mr. Bernanke opposed Congressional action on the ground that spending increases and tax cuts would increase the budget deficit, the Fed might restrain its own effort to stimulate the economy with lower interest rates. ”
The US economy is in grave difficulties!! I think these will become much more prevalent during late 2008/mid 2009
The FED is VERY concerned with supporting the leveraged speculating players in the eeconomy — banks, brokers, PE, hedge. etc.
And maybe he should be — there are trillions in play.
@Edward C. Ponzi
Wait a minute, I thought the board of the Fed was composed of members of the banks, industry, etc.
what I mean is that the Fed “is” the banks
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