Comments on: Written Testimony Submitted To The Congressional Oversight Panel

By: Beth

Beth — Mon, 23 Nov 2009 15:29:06 +0000

…more transparency from the Federal Reserve would be a good start. first by changing it’s name so as not to mislead the rest of us into thinking it’s the fourth branch of government…. look at any directory of its members and most if not all are from the banking industry.

By: StatsGuy

StatsGuy — Fri, 20 Nov 2009 19:34:54 +0000

I wouldn’t call it central planning – I would call it what we had in the 50′s – an “industrial policy”, an “energy policy”, a “trade policy”. These were coordinating functions that operated through market mechanisms (tax incentives, etc.), and to some degree contracting.

By: Dave

Dave — Fri, 20 Nov 2009 18:33:26 +0000

Care to offer some detail on why you think that?

By: Steve Judd

Steve Judd — Fri, 20 Nov 2009 17:49:28 +0000

Simon and James, can you offer your thoughts on the Paul-Grayson Amendment on auditing the Fed that apparently came out of nowhere and shocked the world by actually being passed yesterday despite big time pushback from the White House and the Fed? Is it that big a deal? Not so much?

Your blog is essential reading in understanding what the heck is actually going on to a financial non-professional like me. Thanks for all your great work and especially for the extraordinary public commitment it requires.

By: hermanas

hermanas — Fri, 20 Nov 2009 12:54:30 +0000

“Too Big to Fail.” is sounding trite. An uneducating, self-aggrandizing rehetoric. A more enlightning adjective comes from a similar sales pitch from 1912,”Titanic”. We know how that worked out, but this time I doubt we’ll be saving “women and children first”. When financial resources are exhausted, will the military be called on to defend our “National Interests”. Who would be the target, revolting natives, foreign competitors..terrorists?

By: joedee1969

joedee1969 — Fri, 20 Nov 2009 10:34:22 +0000

How about some congressional oversight for what happened to the money here:

http://americaspeaksink.com/2009/11/democracy-vs-communism-democracy-lost/

By: Patrice Ayme

Patrice Ayme — Fri, 20 Nov 2009 10:02:41 +0000

Modest, but significant inflation will be helpful, and is necessary, but won’t solve it all. What is needed is a measure of central planning, as China, France and Germany have (among others).

The Eurozone targets 2% inflation, but the central planing of France and Germany steer the economic pot (for example Germany is driving towards CO2 emissions of less than 40% below its 1990 level, by 2020, which creates immense economic activity.)

By: StatsGuy

StatsGuy — Fri, 20 Nov 2009 06:24:37 +0000

http://krugman.blogs.nytimes.com/2009/11/13/its-the-stupidity-economy/

The list of items that are effective beyond the zero bound is well known, and was summarized by Bernanke’s now famous speech:

http://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm

Other mechanisms have been suggested (such as charging interest on bank reserves to force them to lend, rather than PAYING interest on bank reserves – especially when those reserves came from TARP!).

It is inconceivable that the Fed cannot generate inflation, should it so choose. One serious question is this – in seeking to restore the long run trends, how many of the FOMC members would desire to set inflation at 4.5% for a year to recover from the negative YoY price declines we had in this last recession?

Even the non-hawks on the FOMC only want to restore back up to the 2% level _going forward_, which still leaves the economy with an historical nominal price gap.

But really, most of the FOMC would be happy keeping inflation slightly under 2%… So when Krugman talked about the BoJ failing to credibly commit to inflation, you might be tempted to wonder how that could possibly be a problem. Apparently, we’re now discovering for ourselves.

By: Bayard

Bayard — Fri, 20 Nov 2009 03:37:13 +0000

Simon, this is exactly the thing that Congress needs to hear. The problem is that they need hearing aids to do so. Thusfar they have turned their deaf ears (both of them, all of the time) to such congent testamony in favor of supporting the oligarchy/plutocracy in which they willingly, nay, gleefully participate. The way things are going, by the time (a couple of years) passes until the next dam burst, they are likely going to be out of office, and so why try to do the right thing now and cost them valuable private sector careers after they leave Congress.

The oligarchs will continue to support (oops, bribe I meant) their way to further prosperous differentials until then, and carefully send their ill-gotten gains to parts of the world less likely to fall as we will.

I would love to see some strong leaders in the administration and Congress act on even a little of the good advice that you and many others (Stiglitz, Ferguson, Volker, et al) have offered up, but thus far the public hasn’t spoken loudly enough to conquer the Congressional deafness, and, even if that happens, I believe that many of them know, or believe that their days of glory on Capital Hill are numbered.

I don’t ever speak of violence as a solution, but I guaranty you that if the high rate of unemployment continues, their will be many within out borders who will be thinking of violent solutions, as many already are.

By: JB

JB — Fri, 20 Nov 2009 02:58:08 +0000

Stats Guy
you say”Krugman—believes that monetary policy would be the most effective tool—”etc. could you give example(s)of action that the Fed could take that would constitute”the most effective tool”that Krugman seems to desire.
Thanks

By: Ted K

Ted K — Fri, 20 Nov 2009 01:08:22 +0000

Although I am sure there is a large degree of truth in what you are saying, the Chinese don’t even have to go overseas to do that. Oftentimes they invite large foreign conglomerates into China, then Chinese learn the superior manufacturing processes through observation, reverse engineering, or both. There was a story about a young Chinese engineer (or something similar) who “lost” a prototype of an Apple technology (may have been the phone) and committed suicide shortly afterward. But they do it with many foreign originated technologies and processes. Once the Chinese learn the new technologies and processes they start to “put the shaft” to the foreign companies until they “voluntarily” leave and then the Chinese take the home market.

By: Ted K

Ted K — Fri, 20 Nov 2009 00:56:10 +0000

IF (I say IF) the rumors about Geithner asking for Sheila Bair’s firing are true, it’s obvious the guy not only is working for big banks’ interests, but he is out to destroy those who care about Main Street people. This story reported recently by Mary Williams Walsh of NYT is also reason to question what Geithner’s REAL AGENDA is. http://www.nytimes.com/2009/11/17/business/17aig.html?_r=1&dbk

Whose side is Geithner on??

By: fwm

fwm — Fri, 20 Nov 2009 00:42:48 +0000

IT’S OFFICIAL:

Bernanke says having too much leverage is a source of systematic risk, and banks that have an “unsafe” amount of leverage have too much.

http://blogs.wsj.com/economics/2009/11/18/bernanke-offers-broad-definition-of-systemic-risk

By: Delmar

Delmar — Fri, 20 Nov 2009 00:40:41 +0000

Lets face it, most Chinese “technicians” are here stealing Intellectual Capital. I dont trust them. I have friends that sell products into labs and there are so many Chinese technicians trained in the USA or Canada and stealing b/c they are employed.

sad…

By: StatsGuy

StatsGuy — Thu, 19 Nov 2009 23:49:42 +0000

Choice quote, confirming my worst fears:

DeFazio:

“We’ve been fighting with the President’s economic team for months… They don’t believe in infrastructure. They don’t seem to believe in investment. They want a borrowed money, consumer driven recovery… that ain’t happening.”

And that’s from a Democrat. Ugh. When the country hands Obama his pink slip in 2012, it will be a sad, but well-deserved day.