I’ve seen a lot made of the fact that Peter Baker’s long article on Obama and the economy doesn’t talk about housing, foreclosures, or HAMP. But that’s not all it doesn’t talk about! It doesn’t talk about the Federal Reserve, and the President’s powers to appoint its Chairman and Board of Governors.
But this crew—the Federal Reserve System in all its agencies—is the arm of the federal government that has primary responsibility for fighting recessions. The greatest power the president has to influence short-term economic performance is his ability to staff the Fed. Obama acted swiftly to reappoint Ben Bernanke as Chairman and acted very slowly to nominate anyone to serve on the Board of Governors. This has to be part of any discussion of the President’s efforts to deal with the economy. Did nobody ever bring it to his attention that he should fill these vacancies?
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Subscribe by email Subscribe by RSS- The most obvious way that Obama, personally, could make it cheaper for employers to create jobs is, citing his own election, to declare victory in the War on Employment Discrimination call the federal troops in the EEOC and Department of Justice home from harassing employers over "disparate impact" in hiring.
That would be Obama's Nixon Goes to China moment, and assure his re-election. - But aren't' minorities disproportionately unemployed?
- A ridiculous comment from a ridiculous person. Steve, do you get how ridiculous you are? It's not even the substance of your racial views. I don't share them, but I could tolerate them if we were actually discussing race. But you feel compelled literally to analyze every single issue in racial terms. When I see someone bending over backward to inject racial issues into every subject, it's impossible not to conclude that you're simply motivated by racism.
- Well, I don't think he has any problem admitting he is motivated by racism.
This post was silly because of the lack of self awareness. People in general should refrain from making the argument that they embody the "center" and that by hewing to their personal viewpoints, politicians can ensure their reelection. If you hold uncommon or idiosyncratic beliefs you really need to stay away from that.
Every now and then Andrew Sullivan makes an unintentionally hilarious post about how if Obama legalizes gay marriage and marijuana in exchange for eliminating Social Security he'll be politically unstoppable and all the free-thinking independents will rally behind him.
If Obama really scrapped the EEOC, no one besides Steve Sailer and pissed off members of the Democratic base would even hear about it.
And it wouldn't produce a significant economic boost that could help his political prospects. There's no evidence that discrimination lawsuits are holding back hiring.
If you listen to the business community they don't express any concern at all about racial discrimination suits. The Chamber of Commerce hasn't chimed in on this. What they're horrified about is a wave of boomers like Steve Sailer filing age discrimination suits after getting laid off. - "halfkidding" and his ilk - confused hard-money anarchists - often accuses Yglesias of being "obsessed" with the Fed and pushing "asset inflater's" agenda at the expense of the working person.
I responded that Matt's doing a service by focusing on an important institution that is often ignored. "halfkididng" dismissed me, but this article is just one example of many on how the Fed is written out of the narrative. It's too bad Peter Baker doesn't read Matt's blog.
I'm a supporter of Obama but Matt's right that he failed by not making appointments to the Fed a priority.
In the article, Romer is correct when she says that they should have gone back for more stimulus sooner.
Bernanke has gone above and beyond these past few years as evidenced by Republicans actually turning their aim on the often-ignored Fed, but ultimately he has failed and it may cost Obama the election.
(Edited by author 3 hours ago) - What are you talking about? Bernanke has been a failure. His stupidity has cost this country dearly.
- BobRoddis Today 04:47 PMBut this crew—the Federal Reserve System in all its agencies—is the arm of the federal government that has primary responsibility for fighting recessions.
No, this crew is the arm of the federal government that has primary responsibility for igniting unsustainable booms with diluted funny money leading to painful and unnecessary depressions, recessions and busts. - What little Matty doesn't understand is that the Keynesian funny money is the cause of the business cycle. But no one here has shown the slightest familiarity with the Austrian School, despite the fact that the Depression of 1920 showed that...
HAHAHA DISREGARD THAT I SUCK COCKS! - kafkania Today 05:03 PM"The greatest power the president has to influence short-term economic performance is his ability to staff the Fed."
Complete horseshit.
"Did nobody ever bring it to his attention that he should fill these vacancies"
You mean somebody has to tell him? Of course it's possible (to give Obama credit he may not deserve) that he, unlike MattY, realizes the Fed has already played its trump cards, and is now stuck in a classic liguidity trap that 2 decades of assinine easy money policy created in the first place.
- halfkidding Today 05:42 PMThe current makeup of the Board or policy committee has had zero effect upon policy. While for the last year there have been a couple of questioning voices and traditionally the board is always unanimous that has made no difference. Think about this too. Where else is unanimity the rule? That is it at the Fed with all it's many errors demonstrates dysfunction.
Every single history of the crisis sees the fat finger of the history of the Greenspan-Bernake Fed. Not a single one suggesting being too 'tight' as the root cause of the problems. The place where unanimity ruled. Let's get a grip on this nonsense then. The makeup makes no difference and the demand for unanimity reveals a desire that is anti democratic to the core.
The Feds role and actions during the Greenspan Bernanke era became more and more overtly that of the director of a command economy. It is absolutely no coincidence that wealth and power accrued to the banks and financial sphere during the era because that is what the commanders focused upon. At every crisis their health and well being seen as more crucial to the general good. Until in fact their health became an existential necessity for the Republic itself.
It makes me sick.
(Edited by author 1 hour ago) - It has always been thus. It has always been socialism for the rich and harsh free markets for everyone else. Only in some utopia is it not that way. In Germany and some other countries it is less so, but not much.
I don't see the argument that the Fed was too loose after the dot com bubble in the naughties. Only conservatives make that argument and their sympathies do not lie with the working man. Their paymasters are big money. More plausible is Bernanke and Krugman's theory of the Global Savings Glut.
The Fed is part of the Command Economy as you say, and what they are consciously engineering is high unemployment which is absolutely killing the middle class. Obama/ Bernanke have done more Big Government intervention in the private sector than anyone since FDR because the private sector froze up and crashed spectacularly. They haven't been doing it to enrich bankers, many of whom went out of business after the crack up. But go ahead and make things up and emote away.
Fact of the matter is that Bernanke prevented 16% unemployment. - I always looked at it this way: The people who should tell him to fill the vacancies had a list of four hundred some appointments that the Senate couldn't even debate.
So they were a bit busy. - I hit like by mistake. The list of yes men is exceedingly small. The upside of being a member is almost zero so why take the post? Looks nice in the obit? Well maybe it will and maybe it won't.
- ellidc 48 minutes agoI really think what is lost in the loose money criticism that the fed did not do enough is that the Fed did a breathtakingly enormous amount.
http://www.clevelandfed.org/re...
This balance sheet activity is on top of pushing interest rates down to zero. The fact that this did not have a magical result on the economy was not due to some kind depression era monetary stinginess. They had just about reached the limits of their authority and put their toe over the line a little with the Maiden Lane facilities.
Aside from the trivial idea of ceasing the payment of interest on reserves and the illegal idea of buying socks for people, it is actually kind of hard to see what form this more more ism would take. Anything would be completely unconventional and beyond what any traditional economist or potential left leaning appointee would normally be expected to advocate. - technically the Fed is not part of the federal government, although the distinction is mostly nominal.
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