Bernanke emerges as economy's real leader

I thought this was a mistake when it happened, (repeal of the Depression era bank reforms.) The Republic congress gleefully pushed it through and Clinton signed it.

I'm not surprised this has happened.

From NYT article:

"Traditionally regulators have helped commercial banks in financial panics, but not investment banks, which do not hold customer deposits. But the 1999 repeal of the Glass-Steagall Act, the Depression-era law that separated investment banks and commercial banks, led to consolidation within the financial industry that has made such distinctions harder to make."

For the full article:

http://www.nytimes.com/2008/03/15/business/15bear.html?_r=1&hp&oref=slogin

Just remember everybody;

'The only thing we have to fear is, fear itself...'

Just remember everybody;

'The only thing we have to fear is, fear itself...'

Yeah, but GWB ain't FDR. He ain't even WGH (Warren G. H... - you figure out the rest).

This "article" from perhaps one of the most corrupt journalists alive, Bill "Recessions are my Viagra" Neikirk is total nonsense, which is par for the course from Neikirk.
Bill, please explain how the government or Bush should have stopped the increases in the housing market? Please explain what the government should have done to tell Mr.Homeowner you can't sell your home for this much and Mr. Buyer you can't pay this much.
And, Mr.Corrupt Journalist Neikirk, please provide links to your articles panning Clinton for not doing something to stop the acceleration in the stock market -- particularly the tech stocks in the late 1990s, which spiraled up even though most of those companies never saw a profit.

Mr.Zell, when you clean house, I suggest Neikirk be the first to go.

And I suppose it makes you feel good that the economy rests on his shoulders, doesn't it? Don’t look now, but Bernanke is standing in quicksand because of his methods. And the economy is going to go down with him as long as it is on his shoulders.

There is something basically evil in pumping cheap money into an economy to bail out the foolish and the greedy. Relief for them comes at the cost of cheaply inflating the money supply, either by printing too much money or floating cheap loans based on the Fractional Reserve Banking rules. The ability of banks to lend more money than they actually have under those rules is fraudulent and inflationary. Worse yet, it is only the first users of this kind of inflated money that get full value out of it. After it gets used the first time, the market adjusts the value of all of our money downward in proportion to the excess supply of it. Those who save and work hard for their money, and especially those who do not have the financial ability to hedge against inflation - have the substance eaten out of their savings for the benefit of the undeserving. By this method, then, there is an actual transfer of wealth from earners and savers to the wealthy and greedy. This situation has to be wrong regardless of one’s political point of view.

Well said, John W.

You are the only true conservative who posts here (yeah, I'm looking at YOU Trickle Down Terry and Johnny Know-Nothing), and as a matter of fact the only Republican here with any realistic comprehension of economics.

Your posts are a pleasure, and helps to remind me that not all conservatives OR Republicans (clearly not the same thing) are knuckle-dragging, willfully ignorant cheerleaders.

Well, thanks for the pat on the back, Hussein Jones.

But you know this isn’t really a partisan issue. It’s everyone’s problem, and neither the Democrats nor Republicans in Congress are willing to do what it will take to fix it.

The way it works now, the FRB is essentially a fourth branch of government with little or no oversight from Congress or the President. The President appoints members of the Board of Governors and the Chairman of the FRB, and the Senate Confirms them. Then they serve a term of 14 years (possibly during multiple administrations), and are not subject to any other congressional control other than the impeachment process. Even local FRB banks appoint their own presidents subject to approval by the FRB Board of Governors. In short, there is little or no political accountability for the FRB to the people whose lives are most profoundly affected by their decisions. That has to change somehow.

The 94 years of the FRB’s existence has been pocked by episodes of its inflationary policies ruining people and sending our economy into a tailspin. Even blame for the Great Depression can rightly be laid at the FRB’s feet because its members pursued disloyal inflationary policies (to prop up the English Pound), while simultaneously making cheap money way too available for bad banking practices and unregulated investments. The Great Depression taught us that, when money is made that available and that cheap, banks are bound to get greedy and engage in risky lending practices. Somehow, that lesson never got learned, in which case the same mistake was recently repeated when the FRB kept interest rates low while turning a blind eye to subprime market. It’s not that it wasn’t seen. It was simply ignored. The FRB should have been called to account for this, but it is bullet proof.

What needs to happen is that the FRB needs to be abolished or restructured so that it can be made to serves the interests of all the American people. Even a simple change, like the ability to veto a FRB policy decision, or to force a different decision - by the President and Congress - would be a vast improvement. However it happens, we cannot let them incompetently ruin us to serve others.

BTW - Hussein Jones, if you asked Republican House Representative Ron Paul about this, he would have given you almost the same answer. The same is true of a lot of conservatives who voted for him. Conservatives are not monolithic.

Correction:

I meant ". . . to serve the interests of the American people."

I don't know why I didn't catch that. (Sigh.)

There was a time that our government could handle problems. In 1933, Franklin D. Roosevelt created the Home Owner's Loan Corp. The HOLC bought mortgages at a discount from lenders and refinanced on terms the borrowers could manage. About half of the applications were accepted and eighty percent of those were paid in full.
The HOLC paid all of its bills and returned a small profit to the government. What a pity that we do not have people to respond to the problems of today.

C Perry,

Many critics of FDR have claimed over the years that everything he did was useless as far as ending the Depression, and that WWII was the only thing to drive the stake through the heart of the worst slump in modern history.

They may be right; However, the institutions and reforms he implemented, from the WPA to Social Security to BANK REFORM LAWS probably prevented a couple of our
recessions from becoming Great Depressions.

I agree with the idea that this is not a partisan issue because we are all in this boat together.

What I do worry about is the lack of transparency with regard to the financial decisions our government makes that affect us all. This goes from trillion dollar wars that triple the value for oil to the free for all mentality in predatory lending practices.

It seems like our floundering democratic institutions have completely succumbed to oligarchic values. How much lower can the value of the dollar go? How about the size of the national debt?

Do the American people understand how perilous the ground we are standing on actually is?

Puff Piece Again...

Your last two paragraphs expose you as the shill for perpetuating the myth that the Fed or Central Banks are indeed one in the same as the government. Ridiculous reporting. What a puff piece.

"But now the Fed chairman clearly understands he is the main economic actor at the moment. He is not afraid to resort to government bailouts. He has become more innovative in pumping money into the economic system.

Next week, the central bank is set to reduce interest rates again—probably one half of one percent. He is proof that money talks much louder than a presidential speech. Despite concerns about his previous timidity, the economy rests on his shoulders."

Hmmmm

http://www.crooksandliars.com/2008/03/15/elliots-mess-spitzer-investigation-tied-to-fed-bail-out/

John W,

I also found Ron Paul to be an exciting breath of fresh air, though I question how many of his policies would actually help to solve today's problems, other than by allowing us to all feel more "constitutional." That to me is not the end goal, but I'm sure you'll smack me down on all the ways that reverting to pre-New Deal jurisprudence will benefit the masses.

I also agree about the poorly named "Federal" Reserve Board. Its simply a consortium of the truly rich and powerful who, as you have demonstrated, don't always have our (the masses) best interest in mind.

My main critique of conservative/Republican economics is that it doesn't care about actually balancing the budget, only on cutting taxes no matter what the situation. To them, "fiscal responsibility" = tax cuts. To me, fiscal responsibility = balanced budgets.

As I've said many times about the Bush Republicans, "when the only tool you have is a hammer, everything looks like a nail." And the only tool they seem to have are tax cuts and military aggression.

Posted by: John D | March 15, 2008 12:44 PM

Geographically Ignorant Dumb Dumb Little Johnnie Dyslin, "the Joseph Stalin of Streamwood", provide PROOF wiht supporting links to back up you allegation that Bill Neikirk is "corrupt".

While you're at it, we're all still waiting for you to provide proof that John Edwards pays as much for his suits as Dubya does. Citing one magazine article that claims Edwards buys "expensive suits" is weak at best.

This should be real easy for a true "journalist" like yourself...

* * * * *

Posted by: Jones Hussein | March 16, 2008 1:51 PM

Jones Hussein:

I don’t disagree with your critique of neo-con economics and ideology, but I think there’s much more to fiscal responsibility than simply balanced budgets. Don’t get me wrong: A balanced budget is the essential minimum necessary to fiscal responsibility; it’s just not all there is too it.

Like you, I don’t think “tax cuts” have anything to do with fiscal responsibility unless they correspond to lesser spending. Cutting taxes isn’t really cutting taxes – as much is it is deferring taxes with interest – if the government incurs debt to facilitate it. In the latter case, the government’s actions actually cost the taxpayer even more eventually. So, tax cuts, as such, are a mere pretense at fiscal responsibility.

But so is balancing a budget under the wrong circumstances. There’s nothing responsible, for instance, about wasting money or making unauthorized expenditures. It is a needless burden on taxpayers. And this is where constitutional orthodoxy makes a difference. The Constitution tells the government what it can do. If the federal government has no constitutional authority in a given area, then it hat has no business spending money on it. This is a limitation that is universally ignored.

If you have doubts, go look at some of the items in the 2006 budget. It’s embarrassing to know the federal government spends millions on stuff like: research into mariachi music, a teapot museum, a museum for “wheels,” mapping the catfish genome, a freeway overpass for deer, a bridge to nowhere – and so on. There is no authority, even under the most expansive reading of the Constitution, to fund any of this stuff – because none of it benefits our general welfare in any national sense. It’s only when we can stop this kind of spending that the government will begin to be fiscally “responsible.”