In a stinging rebuke to the forces of financial deregulation in general, and the Robert Rubin clique in particular, Larry Summers withdrew his name from consideration for Chairman of the Federal Reserve after it became clear he could not be confirmed. The withdrawal marks a major failure for a man whose path to power seemed unstoppable despite having a career defined by helping cause the financial crisis of 2008.
|By: letsgetitdone Tuesday January 8, 2013 5:38 pm|
The exception to the general pattern focusing on the Trillion Dollar Coin (TDC) as the solution to the debt ceiling problem I outlined and critiqued in my last post, is in Joe Wiesenthal ‘s posts here and here. Wiesenthal alone criticizes, rather than ignores, other options than the TDC, namely the $16 T and $100 T options, on grounds that they are no more effective at meeting the debt ceiling crisis than the TDC. He says that the issue is not a lack money but the debt ceiling law, and also that if a coin that large were minted and used to pay back the debt, then the result would be inflation or hyperinflation because of the flow of the large quantity of reserves into the economy, and the ensuing great expansion in the money supply.
I think that Joe Wiesenthal is both showing his bias towards solving the smaller, more immediate (debt ceiling), rather than the larger (austerity) problem, and also that he’s dead wrong about the impact of a $100 T coin on inflation. On his bias: I can only say, that I don’t agree that “we” are talking about a legal problem rather than a money problem.
|By: Dean Baker Sunday September 9, 2012 8:15 am|
The NYT bizarrely told readers that the value of the dollar is “almost entirely outside of American politicians’ control,” in an pseudo fact check of the Democratic convention speeches last night. This is clearly wrong.
First, the actions of the Federal Reserve Board could have an enormous impact on the value of the dollar. Raising and lowering interest affects the willingness of foreigners to hold dollar denominated assets. This means that whether intended or not, monetary policy will affect the value of the dollar. However the Fed could take steps with the explicit goal of raising or lowering the value of the dollar.
|By: SouthernDragon Thursday August 23, 2012 4:45 am|
A variety of links to articles/interviews/speeches/videos on current issues that may be of interest.
|By: Jon Walker Thursday August 2, 2012 12:18 pm|
Probably the most important political news from this week is not Romney’s gaffes but the fact that the Federal Reserve decided they were going to take no farther action to reduce unemployment.
|By: Dean Baker Friday July 13, 2012 6:25 pm|
The Washington Post editorial board is firmly non-committal on the question of whether the Fed should take more steps to boost the economy. On the pro side we have the fact that the economy is well-below full employment and growing slowly. Furthermore, the Post acknowledges that there is no threat of inflation. Given the Fed’s twin mandates for full employment and price stability, it seems like we have a clear answer here.
|By: SouthernDragon Wednesday March 14, 2012 4:45 am|
A variety of links to articles/interviews/speeches on current topics that may be of interest.
|By: masaccio Sunday March 4, 2012 10:30 am|
Please keep sending me those e-mails, but don’t get hurt feelings if I don’t respond. And good luck with that re-election thing.
|By: Dean Baker Thursday September 22, 2011 7:08 am|
Speaker Boehner and the rest of the Republican leadership owe no apologies for sharing their views with Chairman Bernanke and the rest of the governors. The cause for outrage is the nature of these views.
|By: masaccio Sunday September 11, 2011 10:40 am|
Bernanke can’t understand why consumers aren’t acting in accordance with his understanding of rationality. Mary Schapiro and Robert Khuzami of the SEC don’t punish people for securities fraud. They all should look to the past for help understanding how to do their jobs.