Friday Reads: Hillary Clinton Takes On Wall Street
Posted: October 9, 2015 Filed under: morning reads, U.S. Economy, U.S. Politics | Tags: Barney Frank, Hillary Clinton, Wall Street 36 CommentsIt’s Friday!!!
Things continue to be a little crazy around the kathouse but every time I read political news I feel as though the crazy contagion started from politicians and the media that obsess on them. We’re getting close to 
the first Democratic Presidential Debate so candidates and their proxies are dialing it up to 11.
Former Congressman Barney Frank is on the trail for Hillary Clinton. He penned an op-ed at Politico at Politico in July in which he said progressives supporting Sanders are basically helping the GOP win. He also questioned a return to Glass Steagall, as supported by Elizabeth Warren.
In the post, titled “Why Progressives Shouldn’t Support Bernie,” the former Massachusetts congressman urged Democratic primary voters to steer clear of his fellow New Englander, warning “wishful thinking won’t win the White House.”
Frank pointed to the gleeful cheerleading of Sanders’ challenge to Hillary Clinton from neoconservatives like Bill Kristol to argue that Sanders only serves to weaken Clinton before her general election match-up. According to Frank, a Sanders candidacy — with his poll number steadily gaining on Clinton’s lead — would only distract from the circus that is the 15-person Republican primary.
You can find this quote and the rest of the article at Politico.
I believe strongly that the most effective thing liberals and progressives can do to advance our public policy goals — on health care, immigration, financial regulation, reducing income inequality, completing the fight against anti-LGBT discrimination, protecting women’s autonomy in choices about reproduction and other critical matters on which the Democratic and Republican candidates for president will be sharply divided — is to help Clinton win our nomination early in the year. That way, she can focus on what we know will be a tough job: combating the flood of post- Citizens United right-wing money, in an atmosphere in which public skepticism about the effectiveness of public policy is high.
I realize that before explaining why I am convinced that a prolonged prenomination debate about the authenticity of Clinton’s support for progressive policy stances will do us more harm than good, that very point must be addressed. Without any substance, some argue that she has been insufficiently committed to economic and social reform — for example, that she is too close to Wall Street, and consequently soft on financial regulation, and unwilling to support higher taxation on the super-rich. This is wholly without basis. Well before the Sanders candidacy began to draw attention, she spoke out promptly in criticism of the appropriations rider that responded to the big banks’ wish list on derivative trading. She has spoken thoughtfully about further steps against abuses and in favor of taxing hedge funds at a fairer, i.e., higher, rate.
This is reflective of her role in the 1990s, when she was a consistent force for progressive policies in her husband’s administration. And as Paul Krugman documented throughout the 2008 nomination campaign, she was, on the whole, to Barack Obama’s left on domestic issues.
On Wednesday, Politico published an article by Zachary Warmbrodt that describes how Frank is advising Hillary on her plan for dealing with Wall Street.
Frank told POLITICO on Wednesday that he has been working with campaign staff including Gary Gensler — a key ally in the eyes of Dodd-Frank supporters and often a foe of big banks during his time as chairman of the Commodity Futures Trading Commission, which regulates derivatives markets.
“He was a major formulator in this plan,” Frank said of Gensler, a former Goldman Sachs partner and a Treasury Department official during Bill Clinton’s presidency.
The input of Frank and Gensler could help Clinton’s standing among Democrats aligned with Wall Street critic Elizabeth Warren, the Massachusetts senator, and allay any lingering concerns that Clinton would go easy on a sector that her husband helped deregulate before the 2007-09 crisis that prompted the passage of Dodd-Frank.
Frank had more to say about the notion of bringing back Glass-Steagall.
In Iowa on Tuesday, Clinton gave a brief preview of the direction of the plan, which she said would be released “in the next week.” Clinton was responding to a question about whether she would try to reinstate the Depression-era Glass-Steagall Act that separated commercial and investment banking activities — an idea backed by Warren and Clinton’s Democratic primary competitor Sen. Bernie Sanders.
Clinton said, “Big banks are not the only things we have to worry about.” She said she also wants to target risks among insurance companies, hedge funds and other entities in the so-called shadow banking sector. Clinton added that she was willing to work to change the law to make sure individuals are held accountable for financial wrongdoing.
“What she has proposed is in the spirit of Glass-Steagall but in contemporary terms,” Frank said. “The Glass-Steagall debate is an artificial debate at this point. It’s 85 years old. Most people can see if we had it in effect, it wouldn’t have stopped AIG. It wouldn’t stop subprime mortgages that shouldn’t have been granted.”
Hillary Clinton has often stood accused of pandering or shaping policy proposals for political purposes, but her proposals for improving regulation of the financial system show her doing exactly the opposite — tackling the issue of mega-bank risk in a thoughtful way that is likely to prove politically thankless.
Her idea — not exactly optimized for a 15-second television spot — is to “charge a graduated risk fee every year on the liabilities of banks with more than $50 billion in assets and other financial institutions that are designed by regulators for enhanced oversight,” with fees scaled to be “higher for firms with greater amounts of debt and riskier, short-term forms of debt.”
It’s a mouthful. Banks will hate it. It doesn’t feature a crowd-pleasing, populist applause line. And it’s a pretty great idea.
Hillary Clinton’s risk fee, explained
The problem Clinton is trying to address here is that when a big bank goes bankrupt, it creates huge problems for the broader economy. Because of that, governments have a tendency to prevent big banks from going bankrupt.
And because of that, big banks have a tendency to engage in a riskier pattern of business than you see from other kinds of companies. All companies spend money to make money, but banks finance a much larger share of their spending with borrowed money (as opposed to retained profits) than you see from non-banks. And many banks rely very heavily on short-term borrowing, and fund ongoing operations by counting on their ability to get new short-term loans tomorrow. Financing investments with debt magnifies profits when your bets pay off, but it also magnifies losses when they don’t. Using short-term debt rather than long-term debt lets you pay lower interest rates, but also exposes you to the possibility of unexpectedly finding yourself unable to get the money you need in an emergency situation. Both tendencies magnify risk.
Clinton is proposing to clamp down on those risks by imposing a tax on bank debt.
That compensates the public for the financial cost of bailouts and the social cost of bank failures, while also creating new incentives for banks to manage their affairs in a less risky manner.
Read the rest at the link for more wonky goodness.
Hillary’s plans for Wall Street demonstrate the progressive values she has always had. If you watched TV last night, you probably saw the talking heads carrying on about Hillary’s so-called flip-flops on the Keystone Pipeline and the TPP. The problems these folks have is that they have assume that Hillary and Bill are basically the same person with the same political views. They also refuse to understand that when Hillary was Secretary of State she was working for Obama and had to carry out his policies. Now she’s on her own, and she’s expressing her own views–not Bill Clinton’s or Obama’s.
There’s a great post by Peter Daou at Hillary Men about this: TPP to KXL to WTF! Heads Explode as Hillary Goes Progressive. I hope you’ll read the whole thing. It is a wonderful reflection on how Daou came to be such a strong Hillary supporter and how he came to understand that she is a true progressive. Here’s the conclusion:
In the years I worked for her and in the time since, nothing I saw or heard dissuaded me from my first impression: Hillary is a progressive at heart. I’m perfectly aware that anything she does and any position she takes will get savaged by her detractors, but as a lifelong progressive, I know I’m supporting the candidate who is the most capable of anyone in America to advance the things I care most deeply about. Not Bernie Sanders, who I admire greatly; not Joe Biden, who I also like and respect. Certainly none of the out-of-touch and dangerously narrow-minded Republicans. For that matter, not Barack Obama or Bill Clinton.
Hillary will make an exceptional president. On women’s rights alone, her impact will be history-changing. As the father of a young girl (born during the 2008 campaign), nothing matters more to me.
I’ll conclude with a pithy observation from Lane Hudson, another blogger friend from the early days:
The same people criticizing Hillary for taking a position opposing Keystone XL pipeline and the Trans Pacific Partnership trade deal are the same people who wanted a Warren or Sanders challenge to pull her to the Left.
It’s going to be fun watching the Villagers’ heads explode as Hillary reveals more and more of her true, liberal self.
MA Gov. Deval Patrick Appoints Former Chief of Staff to Fill John Kerry’s Senate Seat
Posted: January 30, 2013 Filed under: just because, U.S. Politics | Tags: Barney Frank, Gov. Deval Patrick, John Kerry, Massachusetts Senate seat, William "Mo" Cowan 14 Comments
William “Mo” Cowan
From The Hill:
Massachusetts Gov. Deval Patrick (D) has appointed William “Mo” Cowen, his former chief of staff, to fill former Sen. John Kerry’s (D) seat until a special election is held this summer….
“Mo’s service on the front lines in our efforts to manage through the worst economy in 80 years and build a better, stronger Commonwealth for the next generation has earned him the respect and admiration of people throughout government,” Patrick said in a statement announcing the appointment.
Former Rep. Barney Frank (D-Mass.) had also pursued the seat, but his outspoken interest might have undermined his chances of winning the appointment.
Patrick will make the official announcement at 11AM this morning.
Some background on Cowan from The Boston Globe:
Cowan, 43, was first hired by Patrick as his legal counsel in 2009 and was then promoted to chief of staff in 2010. Last November, Cowan stepped down from the $144,000 a year job.
Cowan is a North Carolina native and Duke University graduate who came to Boston to attend Northeastern University Law School in the early 1990s – and never left the region. One of the city’s leading African-American lawyers, Cowan is a former partner in the politically connected law firm of Mintz Levin.
Cowan will become the first African-American to represent Massachusetts in the Senate since Edward Brooke held the seat as a Republican from 1966 to 1978….
Cowan’s selection was quickly praised by Martin W. Healy, chief legal counsel for the Massachusetts Bar
Patrick and Cowan built up a strong friendship over the years, in part, because both men have risen from difficult childhoods to prominence in Boston and in the state. Patrick also served as a mentor to Cowan when both were practicing lawyers.
Much more at the link.
Solstice 2012 Morning Reads
Posted: December 21, 2012 Filed under: morning reads | Tags: Barney Frank, Carl Bernstein, General Patreus, Newgrange Tomb, Romney Campaign Boondoggles, Rupert Murdoch, Solstice, winter 36 Comments
Good morning and happy solstice!
Today is the shortest day of the year!!
In Washington, D.C., the winter solstice sun reaches a maximum angle of only 27.7º above the horizon at solar noon. In the more northern city of London, the sun takes an even shorter path, climbing only 15.1º in the sky. And just south of the Arctic Circle, the Icelandic capital of Reykjavik sees the midday sun climb no higher than 2.1º above the horizon.
Here’s some other ways that humanity has celebrated the day in the past from National Geographic.
Throughout history, humans have celebrated the winter solstice, often with an appreciative eye toward the return of summer sunlight.
Massive prehistoric monuments such as Ireland’s mysterious Newgrange tomb (video) are aligned to capture the light at the moment of the winter solstice sunrise.
(Related: “Ancient Irish Tomb Big Draw at Winter Solstice.”)
Germanic peoples of Northern Europe honored the winter solstice with Yule festivals—the origin of the still-standing tradition of the long-burning Yule log.
The Roman feast of Saturnalia, honoring the God Saturn, was a weeklong December feast that included the observance of the
winter solstice. Romans also celebrated the lengthening of days following the solstice by paying homage to Mithra—an ancient Persian god of light.
Many modern pagans attempt to observe the winter solstice in the traditional manner of the ancients.
“There is a resurgent interest in more traditional religious groups that is often driven by ecological motives,” said Harry Yeide, a professor of religion at George Washington University. “These people do celebrate the solstice itself.”
I like to remind people that Mithra is the real reason for the season. Despite what Fox News says, the original happy holiday for the Romans on December 25th was the birthday of the virgin born Mithra. Vatican City was built on his huge temple. Too bad we might never get to excavate it.
Mithra, legend says, was incarnated into human form (as prophesized by Zarathustra) in 272 bc. He was born of a virgin, who was called the Mother of God. Mithra’s birthday was celebrated December 25 and he was called “the light of the world.” After teaching for 36 years, he ascended into heaven in 208 bc.
There were many similarities with Christianity: Mithraists believed in heaven and hell, judgement and resurrection. They had baptism and communion of bread and wine. They believed in service to God and others.
In the Roman Empire, Mithra became associated with the sun, and was referred to as the Sol Invictus, or unconquerable sun. The first day of the week — Sunday — was devoted to prayer to him. Mithraism became the official religion of Rome for some 300 years. The early Christian church later adopted Sunday as their holy day, and December 25 as the birthday of Jesus.
Mithra became the patron of soldiers. Soldiers in the Roman legions believed they should fight for the good, the light. They believed in self-discipline and chastity and brotherhood. Note that the custom of shaking hands comes from the Mithraic greeting of Roman soldiers.
It was operated like a secret society, with rites of passage in the form of physical challenges. Like in the gnostic sects (described below), there were seven grades, each protected by a planet.
Since Mithraism was restricted to men, the wives of the soldiers often belonged to clubs of Great Mother (Cybele) worshippers. One of the women’s rituals involved baptism in blood by having an animal- preferably a bull – slaughtered over the initiate in a pit below. This combined with the myth of Mithra killing the first living creature, a bull, and forming the world from the bull’s body, and was adopted by the Mithraists as well.
When Constantine converted to Christianity, he outlawed Mithraism. But a few Zoroastrians still exist today in India, and the Mithraic holidays were celebrated in Iran until the Ayatollah came into power. And, of course, Mithraism survives more subtly in various European — even Christian — traditions.
So, somebody needs to remind Fox News that Constantine was the one that stole December 25th from the Mithraists. They should direct their outrage at him.
Speaking of Fox News, there’s something you should read on the Dread Pirate Murdoch and his attempt to install a US President. The story gets some column space from Carl Bernstein writing for The Guardian. It’s about said dread pirate’s attempt to waylay the US presidential election by trying to get Petraeus to run. Bernstein’s big question is why weren’t the press all over this?
The Murdoch story – his corruption of essential democratic institutions on both sides of the Atlantic – is one of the most important and far-reaching political/cultural stories of the past 30 years, an ongoing tale without equal. Like Richard Nixon and his tapes, much attention has been focused on the necessity of finding the smoking gun to confirm what other evidence had already established beyond a doubt: that the elemental instruments of democracy, ie the presidency in Nixon’s case, and the privileges of free press in Murdoch’s, were grievously misused and abused for their own ends by those entrusted to use great power for the common good.
In Nixon’s case, the system worked. His actions were investigated by Congress, the judicial system held that even the president of the United States was not above the law, and he was forced to resign or face certain impeachment and conviction. American and British democracy has not been so fortunate with Murdoch, whose power and corruption went unchecked for a third of a century.
The most important thing we journalists do is make judgments about what is news. Perhaps no story has eluded us on a daily basis (for lack of trying) for so many years as the story of Murdoch’s destructive march across our democratic landscape. Only the Guardian vigorously pursued the leads of the hacking story and methodically stuck with it for months and years, never ignoring the underlying context of how Rupert Murdoch conducted his take-no-prisoners business and journalism without regard for the most elemental standards of fairness, accuracy or balance, or even lawful conduct.
When the Guardian’s hacking coverage reached critical mass last year, I quoted a former top Murdoch deputy as follows: “This scandal and all its implications could not have happened anywhere else. Only in Murdoch’s orbit. The hacking at News of the World was done on an industrial scale. More than anyone, Murdoch invented and established this culture in the newsroom, where you do whatever it takes to get the story, take no prisoners, destroy the competition, and the end will justify the means.”
The tape that Bob Woodward obtained, and which the Washington Post ran in the style section, should be the denouement of the Murdoch story on both sides of the Atlantic, making clear that no institution, not even the presidency of the United States, was beyond the object of his subversion. If Murdoch had bankrolled a successful Petraeus presidential campaign and – as his emissary McFarland promised – “the rest of us [at Fox] are going to be your in-house” – Murdoch arguably might have sewn up the institutions of American democracy even more securely than his British tailoring.
An interesting little survey result of university students put a smile on my face for a variety of reasons. It’s actually a few months old and I some how missed it. That’s to BB for letting me know why my students always looked so sleepy on the way into the lectures for all those years. I was an economics major so ….
In a survey of several thousand English undergraduates by Studentbeans.com, economics majors are more likely to have more sexual partners than their peers other fields. A budding Ben Bernanke had an average of 4.88 sex partners since college started. Compare this to the struggling Comparative Religion major who has had an average or 2.13 partners, or the mournful Environmental Science major who has slept with only 1.71 people. It is not even a contest.
Maybe it’s just be cause we’re great at data gathering and we keep count. Or maybe not.
Congressman Barney Frank in his last days in office and is giving many interviews. He talks openly about a lot of interesting things.
Later, after recounting a controversy over an attempt by a male prostitute to blackmail him, he said, “I always have thought prostitution should be legal” and said that ultimately women were “worse off” without legalized prostitution.
Frank also believes that those who vote against gay and lesbian rights but who are in the closet deserve to be outed, explaining, “Yes, I believe the policy should be that people have a right to privacy but not to hypocrisy.”
Frank discussed recent comments made by Supreme Court Justice Antonin Scalia when asked by a Princeton student about his writing on same-sex marriage and gay and lesbian issues. “If we cannot have moral feelings against homosexuality, can we have it against murder? Can we have it against other things?” Scalia told the student.
“I was glad that he made clear what’s been obvious, that he’s just a flat out bigot,” said Frank, going on to call the explanation “quite stupid.”
This has to be the biggest taxpayer supported boondoggle in the history of boondoogles: “The Cost of Romney’s Government-Assisted Transition: $8.9 Million”.
One of the less scintillating milestones of the 2012 election was marked by the General Services Administration, when Mitt Romney became the first candidate to take advantage of the Presidential Transition Act of 2010. The Act, spearheaded by former Sen. Ted Kaufman, provides resources for major candidates to start planning for their presidency long before Election Day. Through a Freedom of Information Act request, TIME acquired documents from the GSA that show the scope–and cost–of this unprecedented government-assisted transition.
In 2010, legislators said the main goal of the Act was to bolster national security by ensuring that candidates are prepared to take office, and that they don’t shy away from transition planning for fear that they’ll look presumptuous. To that end, the law stipulates that the federal government will provide certain resources to non-incumbent candidates after their nominating convention. The GSA says final costs are still being tabulated, but the initial estimated cost for Romney’s pre-transition phase is around $8.9 million.
Last week, the Romney press corp wrote a formal complaint regarding the charges that they say far exceed any other campaign. Today, after getting no response from on high, some of the press corp alerted American Express that they are contesting the charges.
Citing examples of “exorbitant charges” for food and holding costs, the press corp detail in their letter to the Romney campaign, “Some examples: $745 per person charged for a vice presidential debate viewing party on Oct. 11; $812 charged for a meal and a hold on Oct. 18; $461 for a meal and hold the next day; $345 for food and hold Oct. 30.”
These are no small outlets fighting back against the Romney campaign; signing the letter are the higher ups from the Los Angeles Times, Wall Street Journal, New York Times, USA Today, Agence France-Presse, Washington Post, Yahoo, Buzzfeed, and Financial Times. This isn’t their first rodeo.
They also have questions about food ostensibly provided for them but eaten by the campaign staff. “These costs far exceed typical expenses on the campaign trail. Also, it was clear to all present that the campaign’s paid staff frequently consumed the food and drinks ostensibly produced for the media. Were any of the costs of these events charged to the campaign itself, to cover the care and feeding of its staff?”
Earlier Buzzfeed reported that the campaign went all out at the viewing party, providing massage tables and lavish food and booze. Unfortunately, these perks weren’t discussed with all of the media that are now being charged for them.
That certainly sounds like the way an enterprising CEO screws their projects to me. Good thing he didn’t get his hands on the national treasury.
So, that’s it for me this morning … Carry on!!
What’s on your reading and blogging list this morning?
Wednesday Morning Reads
Posted: November 24, 2010 Filed under: morning reads | Tags: Barney Frank, Ben Bernanke, Bobby Jindal the Terrible, C Street Fundamentalist threat, Milton Friedman, Monetarist approach to the Great Depression, QE2, TSA hates pat downs 65 Comments
Good Morning!!!
I thought I’d give you reason to be glad that Bobby Jindal the Terrible isn’t your governor. He’s tearing around the country trying to start up his presidential wannabe campaign and we’ve just about had it with him. This is from Baton Rouge’s The Advocate. He singled out some woman professor as the poster child for unnecessary research in his new book. He’s been out pimping for the book ala other Republican Governor Presidential Idiot Wannabes that want to be independently wealthy before they take the plunge to New Hampshire. The poor anthropology professor was doing a longitudinal story on Russian Mail Order Brides and their U.S. husbands. It turns out the research was funded by a grant and not tax payers too. That didn’t stop Jindal from tearing into the article in his book or fact-checking his words or reading the article for that matter.
Read the entire Op-Ed piece and be appalled that some one with so many educational opportunities in his life wants to deny so many others that opportunity and force them into oil rig serfdom. Baton Rouge is not exactly a bastion of liberalism so this piece may be a good sign that he’s wearing out his welcome here. The article even sneakily mentions the one university that should be shut down and a trio of universities that should be merged because they are all in the middle of nowhere and have fewer students than most high schools. Jindal would never man up and do that. Instead he’s just draining ever useful and viable university by 1/3 of their budget a year. He’s sucking the life out of LSU, the med centers, and the law school. LSU has consistently rated among the top public universities in the country. Jindal obviously prefers we all go to community colleges instead.
Stop this man before he can do more damage any where else!!
Gov. Bobby Jindal’s machine of aides, bloggers, talk radio hosts and boutique publishers has turned its focus on college professors and what they do.
They attacked sabbatical study last week as a waste of money that takes teachers out of the classroom. The governor criticized scholarly study as unworthy of taxpayer dollars because such research fails to “create better lives and more job opportunities.”
At the base of this hubbub is Jindal’s apparent desire that higher education’s top officials just shut up and accept deep cuts he has planned for public college and university budgets
It all has the absurdity of season ticket holders dictating that the LSU Tigers no longer hold huddles because the quarterback’s primary job is to throw touchdowns.
If you haven’t ventured into Jindal’s ‘scholarly work’ at the New Oxford Review, please do so!!! It’s called BEATING A DEMON ; Physical Dimensions of Spiritual Warfare. It’s all about participating in an exorcism.
”The crucifix had a calming effect on Susan, and her sister was soon brave enough to bring a Bible to her face. At first, Susan responded to biblical passages with curses and profanities. Mixed in with her vile attacks were short and desperate pleas for help. In the same breath that she attacked Christ, the Bible’s authenticity, and everyone assembled in prayer, Susan would suddenly urge us to rescue her. It appeared as if we were observing a tremendous battle between the Susan we knew and loved and some strange evil force. But the momentum had shifted and we now sensed that victory was at hand.”
Maybe Jindal the Terrible should consider signing up for the new recruiting effort by the Catholic Church for exorcists and leave those of us that prefer science, rational thought, and education alone. This is what you get when you vote for people without researching them carefully.
So, just when you think politicians couldn’t get any more elitist and just plain whacked, this brings me to something BostonBoomer, Pilgrim and I have been discussing. The book is called ‘C Street: The Fundamentalist Threat to American Democracy’ by Jeff Sharlet. It’s the follow-up to a book called ‘The Family’. Both let you know how many of our country’s most important institutions–like Congress and the military–have been invaded by crazy people. Bart Stupak, John Ensign, Tom Coburn, and Jim Inhofe are among the resident nutjobs of this frat boyz for jeezus club. This group of good ol’ boys supports some of the most villainous, heinous murders in the world you could imagine because they believe being rich is a sign that you are chosen by god. They helped Papa Doc. They helped Suharto. Here’s a bit from the author about David Coe, one of the C Street Family.
What was the concept? “Men who are picked by God!” Not the many, but the few. Under Coe’s guidance, Family politicians embraced the idea that God prefers the services of a dedicated elite to the devotion of the masses. “I have had a great and thrilling experience reading the condensed version of The Rise and Fall of the Third Reich, ” one of Coe’s lieutenants wrote him after Coe had given him a reading list for “the Work,” as their mission was often called. “Doug, what a lesson in vision and perspective! Nazism started with seven guys around a table in the back of an old German Beer Hall. The world has been shaped so drastically by a few men who really want it such and so. How we need this same kind of stuff as a Hitler or a Lenin.” That is, for Jesus, of course
You don’t get to call it a Godwin when a group does it to itself on its own, do you?
Okay, so those poor little put out TSA staff are now speaking out about all the trauma that they have to endure. People actually yell at them!!! Poor babies!!! This is from the Daily Mail.
‘It is not comfortable to come to work knowing full well that my hands will be feeling another man’s private parts, their butt, their inner thigh,’ one told the BoardingArea blog.
‘Even worse is having to try and feel inside the flab rolls of obese passengers and we seem to get a lot of obese passengers!’
Another said he had a huge problem dealing with a ‘large number of passengers… daily that have a problem understanding what personal hygiene is.’
Well, that’s a thought. If you’re going to travel, don’t shower for days and that will certainly raise a stink for them! What, they thought they were only going to get to feel up super models? Was that in the recruiting ads some where? Maybe they should consider quitting or complaining to their boss, John Pistole.
Just a quick heads up. Wikileaks tweeted that Wikileaks said, “Next release is 7x the size of the Iraq War Logs. Intense pressure over it for months,” and asked supporters to continue donating to the cause. We need to start up an Ellsberg Prize for Truth.
The always outspoken Congressman Barny Frank defended Ben Bernanke and the QE2. Additionally he called Republican detractors to be more in line with China than U.S. interests.
Frank said that in the absence of additional fiscal measures, the Fed’s asset purchases are an appropriate response.
“I wish we had some more fiscal stimulus,” said Frank, a Massachusetts Democrat. “In the absence of that, given unemployment, given the complete absence of inflation, he is doing a very reasonable thing.”
The Fed has been making speeches before congress and exercising monetary policy in concern of both inflation and unemployment since the Humphrey-Hawkins Full Employment Law was passed in 1978. I wasn’t really aware that there was anything questionable about that goal until Bostonboomer called my attention to this over at the NYT.
It seems that some Republicans want to limit the Fed’s policy scope to inflation fighting only. This further convinces me that they have no interest in putting Americans back to work. I’ve pretty much decided that most of the hoopla over QE2 is from financial interests who really don’t want to lend money at reasonable rates any more. This also brings me in mind of that thought.
The Fed’s being using a modified Taylor rule for some time and has very much taken a stand in keeping with Anna Schwartz and Milton Friedman’s seminal work on the Great Depression. That’s the CONSERVATIVE economist Milton Friedman, remember him? He basically said that the FED botched monetary policy and let deflation ruin the economy. What most conservatives don’t get these days–probably because they never actually both to read anything factual–is that Friedman’s analysis owes a lot to Keynes.
Read this and see if you see any similarities.
FDR was inaugurated on March 4, 1933, and two days later he declared a “bank holiday,” allowing banks legally to refuse withdrawals by depositors; it lasted ten days. With his famous phrase, “The only thing we have to fear is fear itself,” he intended to dissuade depositors from running on their banks, but by then it was far too late. In 1929 there were a total of 25,000 banks in the United States. As the bank holiday ended, only 12,000 banks were operating (though another 3,000 were to reopen eventually). The effect on the money supply was equally dramatic. From 1929 to 1933 it fell by 27 percent—for every $3 in circulation in 1929 (whether in currency or deposits), only $2 was left in 1933. Such a drastic fall in the money supply inevitably led to a massive decrease in aggregate demand. People’s savings were wiped out so their natural response was to save more to compensate, leading to plummeting consumption spending. Naturally, total economic output also fell dramatically: GDP was 29 percent lower in 1933 than in 1929. And the unemployment rate hit its historic high of 25 percent in 1933.
Friedman and Schwartz argued that all this was due to the Fed’s failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply. The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not. As Milton and Rose Friedman wrote in Free to Choose:
The [Federal Reserve] System could have provided a far better solution by engaging in large-scale open market purchases of government bonds. That would have provided banks with additional cash to meet the demands of their depositors. That would have ended—or at least sharply reduced—the stream of bank failures and have prevented the public’s attempted conversion of deposits into currency from reducing the quantity of money. Unfortunately, the Fed’s actions were hesitant and small. In the main, it stood idly by and let the crisis take its course—a pattern of behavior that was to be repeated again and again during the next two years.
According to Friedman and Schwartz, this was a complete abdication of the Fed’s core responsibilities—responsibilities it had taken away from the commercial bank clearinghouses that had acted to mitigate panics before 1914—and was the primary cause of the Great Depression.
Okay, what exactly is the QE2 then? It’s large scale buying of treasury bonds. Why are they doing it? Because the Federal Government is not doing it’s job with the fiscal policy end. We had a stimulus that was way too weak and way too loaded with stuff that doesn’t stimulate very well and now we’ve got these idiots around talking about deficits and inflation. It’s like their trying to actively sabotage the economy!
Alright, well, I think I’m hitting MABLUE’s limit for being long winded so I’ll stop now. I need to go to the grocery store and see a man about some trade statistics.
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