Bernanke’s future as Fed chair in growing doubt

Fed Chairman Ben Bernanke, once considered a shoo-in for another term, is apparently in trouble in the Senate. A filibuster has been threatened, and Harry Reid says he not certain he has the 60 votes needed to bring Bernanke’s confirmation up for a vote by the Jan. 31 deadline.

Personally, I think Bernanke’s critics and defenders are both correct. Prior to the housing bust, Bernanke failed to heed the signals of impending trouble and in fact took steps that in hindsight contributed to the problem. But once the scope of the crisis became apparent, Bernanke acted decisively and effectively in cobbling together a plan to contain the damage.

So I’m torn on whether he should be reconfirmed. But as Politico warns, the folks on Wall Street are insistent Bernanke remain:

On Wall Street, executives predicted a dire market reaction if Bernanke’s confirmation fails. “A decision to kill the Bernanke nomination will cause a large and disturbing upset in global financial markets,” said economist Joseph Brusuelas. “Not just equities, but the dollar and interest rates will be immediately impacted.”

Wall Street lobbyists in Washington said they were quietly making the case for Bernanke on Capitol Hill, but were hamstrung by the politics. Because Bernanke has been criticized as too close to Wall Street, they said, the surest way to seal his fate would be for financial lobbyists to make a full court press to save his nomination.

“Three months ago, we thought this was a slam dunk,” said one financial services executive. “And today people think this may not even be a layup. There’s lots of concern in the markets that the politics of the Senate might derail him.”

Of course, that Wall Street support is part of Bernanke’s problem in the first place.

389 comments Add your comment

I Report (-: You Whine )-: mmm, mmmm, mmmmm!

January 23rd, 2010
9:12 am

What has the last year been but “a large and disturbing upset in global financial markets?”

With the world moving away from the debauched US currency?

We can do better, duh.

I Report (-: You Whine )-: mmm, mmmm, mmmmm!

January 23rd, 2010
9:12 am

However, even a more modest agenda looks tough for Mr Obama now. Believing their strategy of total opposition was vindicated by the voters last Tuesday, Republicans are in even less of a mood to co-operate with Democrats than before. The difference is that with 41 seats in the Senate they are in a position to block almost anything Mr Obama proposes – including the Wall Street regulatory measures he announced on Thursday.-FT

It’s mourning in America!

For the death of obozo’s destruction!

Southern Comfort

January 23rd, 2010
9:20 am

Is it possible to find someone who’s qualified to handle that job that isn’t seen as too close to Wall Street? It seems like the only way to get the experience needed for that job is to be immersed in that environment.

Or am I looking at it the wrong way?

FrankLeeDarling

January 23rd, 2010
9:21 am

grab your fiddles folks I smell smoke

@@

January 23rd, 2010
9:23 am

Good! but so too, is Geithner and Summers too close to Wall Street.

Say goodbye to the women’s vote, Senator Spectre.

ACT LIKE A LADY!!?!!

Maybe Senator Spectre oughta act like a representative of the people and quit CLINGING to his superior attitude.

Man oh maaaannnnnnnnnnnn! If he had said that to me….I’da Cheneyed him in a heartbeat!!!!

I saw nothing to indicate she wasn’t acting like a lady. Spectre had nothing so he attacks her gender!!!?!!!

Aaaaarrrgghhhhhhhhhh!

jt

January 23rd, 2010
9:24 am

Keep Bernanke.

Just get rid of the Fed.

At least audit the crooks.

I Report (-: You Whine )-: mmm, mmmm, mmmmm!

January 23rd, 2010
9:26 am

In recent weeks, Light has published virtually identical “Letters to the Editor” in support of President Barack Obama in more than a dozen newspapers.Every letter claimed a different residence for Light that happened to be in the newspaper’s circulation area.-Cleveland.com

Um, did the AJC?

Road Scholar

January 23rd, 2010
9:34 am

” Harry Reid says he not certain he has the 60 votes needed to bring Bernanke’s confirmation up for a vote …”

What? The spineless Senators can’t vote? Why? Too busy getting their business endorsements? Folks, it’s either yes or no!

So Co: well put. The same goes with politicians which may run for election to higher office. They need some type of governing experience. So why hasn’t Rush, Hannity, etc. run?

getalife

January 23rd, 2010
9:34 am

Day two of corporate power and some CEO’s want Congress to legislate to save our democracy. Most do not and they know our corrupt Congress will give them loopholes so they will not be effected.

Ben will stay and wonder who else in power are here to stay.

We are in uncharted territory folks and think the total collapse is inevitable.

FrankLeeDarling

January 23rd, 2010
9:40 am

For a while I thought we had a chance to save this country,but the dumb is just too loud.

Brad Steel

January 23rd, 2010
9:52 am

Bernanke’s credibility, intelligence and competence are far above that of even the best in Congress. Doesn’t seem right the he has to be judged by self-righteous douches.

The fact that the Fed’s contribution to the credit collapse was mostly the effective of Greenspan’s policies (as indicated by his “well who’d a thunk it” congressional testimony) should grant Bernanke some slack.

LA

January 23rd, 2010
9:53 am

“Bernanke’s future as Fed chair in growing doubt”

So is Obama’s presidency.

Taxpayer

January 23rd, 2010
9:54 am

I think this is a most excellent opportunity for the Dems to pull back at least 40 to 50 percent on their support and let the Reps share equally in the decision to keep him or not. It is time to play a little shared responsibility game. After all, the people of Massachusetts have spoken for the other 49 to 56 states.

LA

January 23rd, 2010
9:57 am

White House nightmare persists

At the end of Barack Obama’s worst week since taking power a year ago, the US president’s fortunes look set only to deteriorate over the coming days. Following the shock defeat of the Democratic candidate in Massachusetts on Tuesday, a move that deprived the president of his 60-seat super-majority in the Senate and left his legislative agenda in tatters, Mr Obama has just four days to reboot the system.

http://www.ft.com/cms/s/0/821dce96-0786-11df-915f-00144feabdc0.html

Taxpayer

January 23rd, 2010
9:58 am

Bernanke certainly won’t be judged by a group of his peers. After all, McCain says that he leaves all the economics problems to his trusted friend, Phil Gramm.

jconservative

January 23rd, 2010
9:58 am

Bring it to a vote. If there is a filibuster, so what? What harm would a good 4 to 6 month filibuster do? None of the spending bills get passed until October anyway. So no new laws get passed, can that be so bad? Remember the wonderful first 5 words of the First Amendment – “Congress shall make no law…”.

Being a conservative I am at a loss why the last 2 Fed Chairmen have been Republican appointees, Greenspan & Bernanke. I had just as soon bring back Volcker for another term, one of the few smart things Carter ever did.

But I believe Bernanke will be approved by the Senate.

LA

January 23rd, 2010
9:59 am

“After all, McCain says that he leaves all the economics problems to his trusted friend, Phil Gramm.”

McCain isn’t president.

Taxpayer

January 23rd, 2010
10:02 am

McCain gets a vote, up or down. Thanks for reminding me again of the nightmare that was averted by his selection of Sayrah as him running mate though.

RW-(the original)

January 23rd, 2010
10:03 am

If people are going to riff on the “57 states” at least try to get it right. It’s a minimum of 60 using his own words

He says he’s been to 57 with one to go and it excludes Alaska and Hawaii where he said his “staff” wouldn’t justify his going. Keep in mind though at the time he said this he was still at least paying lip service to boycotting Michigan and Florida so he may well think he’s the President of all 62 states.

LA

January 23rd, 2010
10:07 am

“McCain gets a vote, up or down. Thanks for reminding me again of the nightmare that was averted by his selection of Sayrah as him running mate though.”

Same here! Obama is the best thing that could have happened to the GOP. He pretty much forces the GOP to embrace conservatism. Hopefully in 2012 the new president will be a conservative!

WEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

Taxpayer

January 23rd, 2010
10:08 am

If there is a filibuster, just make sure it is transparent. C-Span! C-Span! C-Span! FOXY “News”! FOXY “News”! FOXY “News”!

Picture-in-Picture, side-by-side comparison so we can all see real time what FOXY “News” conveniently cuts out… and pastes back in its place. I thought it was snowing that day but now folks are in orange shorts, running around… .

LA

January 23rd, 2010
10:08 am

“I think this is a most excellent opportunity for the Dems to pull back at least 40 to 50 percent on their support and let the Reps share equally in the decision to keep him or not.”

No, the GOP is doing the smart thing and letting the democrats own the health care bill, the economy and the war on man-made disasters.

LA

January 23rd, 2010
10:09 am

“Picture-in-Picture, side-by-side comparison so we can all see real time what FOXY “News” conveniently cuts out… and pastes back in its place. I thought it was snowing that day but now folks are in orange shorts, running around… .”

How funny is it that one news channel can make thousands of liberals howl and scream!

LA

January 23rd, 2010
10:10 am

RASMUSSEN:
Obama Approval Index: -19
Strongly Approve 24%
Strongly Disapprove 43%

Total Approval 44%

Priceless

Taxpayer

January 23rd, 2010
10:10 am

Have you not heard the news. Obama is Bush-lite. Conservative to the bone. A war mongrel that is funded by Viagra sales. It’s the truth cause I heerd it from one of them FOXY “news” persons.

LA

January 23rd, 2010
10:11 am

More bad news for Owl Gore and the climate cult.

UN climate change expert: there could be more errors in report

The Indian head of the UN climate change panel defended his position yesterday even as further errors were identified in the panel’s assessment of Himalayan glaciers.

Dr Rajendra Pachauri dismissed calls for him to resign over the Inter-governmental Panel on Climate Change’s retraction of a prediction that Himalayan glaciers could disappear by 2035.

http://www.timesonline.co.uk/tol/news/environment/article6999051.ece

LA

January 23rd, 2010
10:12 am

“Have you not heard the news. Obama is Bush-lite. Conservative to the bone. A war mongrel that is funded by Viagra sales. It’s the truth cause I heerd it from one of them FOXY “news” persons.”

Bush was not a conservative. Viagra sales were boosted by Clinton and Dole.

John Galt Jr.

January 23rd, 2010
10:13 am

I said this before, electing Obama is the best thing conservatives can have. The emperor is now naked and a joke. The people are waking up from the socialist koolaid stupor. My daughter asked me the difference between the two parties the other day. I explained conservatives are responsible for themselves. Liberals want the taxpayers to be responsible for them. Go ahead, I am waiting on another nutjob to tell me “chill, Obama’s got this”.

Taxpayer

January 23rd, 2010
10:14 am

Awooooooooooooooo! Screeeeeeeeeeeeeech! EEEEEEkkkkkkkk! Arf, Arf! Woof, Woof!

The Dems lost their 60 votes. The people of Massachusetts have spoken for the country! What shall the Dems do. Just say no, too. Do You Object!

Taxpayer

January 23rd, 2010
10:16 am

Obama’s Got This. Why, you ask. Because we elected him. You don’t like it! You Object! Well, you can voice your objection in 2012. I suggest another ticket with Palin. That’s the ticket.

Redneck Convert (R--and proud of it)

January 23rd, 2010
10:16 am

Well, good morning everybody. I’m awful glad Bookman finally got away from that lady in orange shorts, what with the men on this blog slobbering all over theirselfs.

This Bernanke needs to stay on, is my opinion. Didn’t I just read he’s a Republican and besides, if he goes, my 401k goes right down the commode?

And even if the Senate don’t vote for him, he needs to stay on. I figure if Hillary could stay in the race a year or so ago even when it was a lead-pipe cinch she couldn’t win, Bernanke can stay too. He can just say the people ain’t spoke yet and refuse to leave. Maybe he can make Congress give him one of them big pay packages–I forget what they call them–like corporations give to CEOs they want to fire.

At least it’s good to know Congress can’t do nothing anymore, now that the librul Democrats don’t have 60 votes in the Senate. We can all rest easy knowing we ain’t going to be robbed by some boondoggle Congress passes. It’s the feeling of releif you get when the state legislature ain’t in session.

Have a good day everybody.

Paul

January 23rd, 2010
10:17 am

Some contribute to problems, then take decisive action to correct it?

Doesn’t sound like Congress – the very people who have to confirm him.

I wonder how much of this is diversion “Look everyone, we got rid of the guy who caused the problem. Now let’s talk about something else.”

Market took big hits when Pres Obama announced his bank plan. Release Bernanke, there may be a real sense of “Does this administration know what it’s doing? What’s next? What are they really planning to do?” so markets will take other hits. May just have to swallow hard and reconfirm. At least we know he has a new mindset. Hopefully.

Yosarian

January 23rd, 2010
10:17 am

RW;
maybe,now that CNN is furiously trying to ‘tack’ back to a ‘center’,
we’ll hear more about Oduma’s ignorant comments & naive world views.
The shear volume of B.O.s gaffs & errors in comparison to Palin’s misspeaks is a no-contest…Obama wins on -wrongs- by a landside.

DoggoneGA

January 23rd, 2010
10:17 am

“Release Bernanke, there may be a real sense of “Does this administration know what it’s doing? What’s next?”

This isn’t a case of the administration releasing him. Obama has backed him for another term. This is a case where he might not be confirmed by Congress.

FrankLeeDarling

January 23rd, 2010
10:20 am

spam is in effect I see

Paul

January 23rd, 2010
10:21 am

Taxpayer 10:16

Partial repost from downstairs just before this thread became active:

“Dems are doomed for a while until they face reality.”

Couple good articles. One a column by Peggy Noonan, “The New Political Rumbling :

http://online.wsj.com/article/SB10001424052748703699204575017503811443526.html?mod=WSJ_Opinion_BelowLEFTSecond

The other in US News “The Incredible Deflation of Barack Obama”:

http://www.usnews.com/articles/opinion/mzuckerman/2010/01/21/mort-zuckerman-the-incredible-deflation-of-barack-obama.html?PageNr=3

Both are of the ‘what happened, why it happened, and why some Democrats get it and others don’t” variety.

Paul

January 23rd, 2010
10:26 am

Doggone/GA

Let me clarify: if the Administration releases him without fighting for him.

RW-(the original)

January 23rd, 2010
10:27 am

Back in 1994 this was Worldwide Day for peace in Bosnia-Hercegovina. Is this something we celebrate annually? It worked out so well that time it can’t be a bad idea so Happy Worldwide Day for peace in Bosnia-Hercegovina!

DoggoneGA

January 23rd, 2010
10:27 am

“If the Administration releases him without fighting for him”

How are they going to “fight” for him? Make backroom deals?

Paul

January 23rd, 2010
10:29 am

Doggone/GA

Have you switched to arguing for arguing’s sake when you ask a question like that?

RW-(the original)

One of my favorite questions: isn’t that the place the Clinton Administration said we’d have our military out by Christmas? And he left them there? As did Bush? As did Obama?

Southern Comfort

January 23rd, 2010
10:32 am

Paul

So if Congress decides not to reconfirm him, where do you find someone with the experience to be Fed Chief that isn’t too cozy with Wall Street? It seems like Congress wants to do something just for the look of taking action, without realizing what the hell they are doing.

How do you find someone with the experience necessary to make those decisions without them being “too close” to Wall Street? That, to me, is like trying to hire a 5-star chef who has never been in a kitchen.

RW-(the original)

January 23rd, 2010
10:32 am

Paul,

They’ve got no prayer of getting out of there lest people realize we really have invaded countries that didn’t attack us and posed no threat before Iraq. Besides, Billy Jeff never said which Christmas.

DoggoneGA

January 23rd, 2010
10:33 am

“Have you switched to arguing for arguing’s sake when you ask a question like that?”

What is wrong with that question? I’d like to know what YOU think the administration can do to FIGHT for Bernanke. The way *I* see it, they already have…they’ve proposed him for another term as Fed Chairman. Now it’s up to Congress. So what else do YOU think they can do? They can’t force Congress to vote him back in.

Paul

January 23rd, 2010
10:33 am

SoCom

Yup, that’s the problem. Or else you get an economist who’s an academic. Like I said, at least he’s the devil we know, so swallow hard…

RW-(the original)

But… but… we can attack other countries if it’s for nice reasons! And stay there forever -

Taxpayer

January 23rd, 2010
10:35 am

Paul,

I just don’t know about that Peggy gal. Talkin’ ’bout creeps and nuts sounds as though it could be about ifs and buts. Then again, time do tell a story and I just loves me a little bit of this and some of that and a dash of the other.

AmVet

January 23rd, 2010
10:36 am

Any sense of fiscal responsibility, leadership based on ethics and morality and insistence on economic justice have been (mortally?) wounded in America, now that the “lets just give away our sovereignty” fake “conservatives” and spineless “liberals” steered the USS America right onto the rocks…

Lots of great music last night. Loved that ARS jag several got on.

(With the occasionally inane, awkward and totally out of place bemusement.)

New York’s fine but it ain’t Doraville…

http://www.youtube.com/watch?v=y4q7SDhyADM

Yosarian

January 23rd, 2010
10:37 am

Ahh yes… the Bosnia-Hercogovenia ‘police’ action. That’s the kind of international meddling GWB promised in his 1st campaign to stay away from- no more nation building and running a police service for the world.

josef nix

January 23rd, 2010
10:37 am

RW

Bosnia-Hercegovina? Where’s that? Ain’t read nothin’ about it or seen nothin’ on the tee-vee. You sure you ain’ jus’ makin’ that up?

DoggoneGA

January 23rd, 2010
10:37 am

“It seems like Congress wants to do something just for the look of taking action, without realizing what the hell they are doing.”

And there you have Congress…in a nutshell

John Galt Jr.

January 23rd, 2010
10:38 am

Hey taxpayer, if you really were a “taxpayer”, you would be a conservative. How much did you actually pay last year? My wife and I payed 83k in personal taxes, not including hidden taxes, sales taxes and business related taxes. We employed 12 people. We carry lots of water, but very soon, we cash in all the chips, close our company and will pay NO MORE. We have enough. If their were a system like the Fair Tax imposed, we would keep the business going and the folks employed. Currently it is NOT worth the hassle. Obama may be President, but he has is clueless, has never managed a damn thing or run a business, and DOES NOT have control of anything except maybe his dog.

RW-(the original)

January 23rd, 2010
10:38 am

SoCo,

They ought to take the Fed chair job and rotate it amongst the Congressional know-it-alls in one year chunks. Normally I’d make Barney Frank take the job first but since Dodd is bailing make him take it now. Let’s see what happens when they have to first guess instead of grandstand while they’re second guessing.

Paul

January 23rd, 2010
10:39 am

Doggone/GA

The position is the Executive’s to nominate and make a case for. If the Congress says ‘we don’t have the votes’ then the Executive addresses their concerns and provides reasons why he’s the best choice. Enough of this tossing out something general (hey Congress, this is the guy we want, okay?) and leaving it to Congress to come up with the particulars (oh, you say you don’t like my nominee? Okay… we’ll back down and find someone you do like, but please don’t ask me why we put the name forward). That deferring to Congress is killing this Administration.

Paul

January 23rd, 2010
10:41 am

Taxpayer

Still and all, I think she make a pretty good case for what’s happened and the disarray Dems find themselves in. Same with the US News piece. I wonder if some of the Dems, though, like Sen Dodd (let’s just take a breather on this health care thing) are pulling back so far it seems like they’re hiding. That’s not a winning strategy, either. Neither is Sen Reid or Spkr Pelosi buying an old pickup truck -

josef nix

January 23rd, 2010
10:42 am

“Three months ago, we thought this was a slam dunk,”

As we’ve seen of late in many quarters, so much for conventional thinking.

RW-(the original)

January 23rd, 2010
10:43 am

DoggoneGA,

Besides what Paul mentioned a President also fights for a nominee by speaking out on their behalf. When Congress starts to balk the President should add to his talking points some language about how important it is to get his nominee confirmed and this President is in our face about 23 hours a day without ever saying Bernanke is important to him so one can hardly blame Congress for thinking the guy is disposable to the White House.

DoggoneGA

January 23rd, 2010
10:43 am

“If the Congress says ‘we don’t have the votes’ then the Executive addresses their concerns and provides reasons why he’s the best choice”

And how do you know they haven’t done that? Or are planning to? And “addressing” their concerns is not the same thing as convincing them..especially when you have the threat of a non-existent filibuster, by a block of member who are, basically, going to vote no on anything Obama proposes. It’s the filibuster that they can’t be sure of breaking, not the actual voting in…and that is what Jay quoted: “Harry Reid says he not certain he has the 60 votes needed to bring Bernanke’s confirmation up for a vote”

Yosarian

January 23rd, 2010
10:44 am

Hey AMVET !
here ya go…

Yosarian

January 23rd, 2010
10:44 am

RW-(the original)

January 23rd, 2010
10:54 am

What’s really awkward is what happens if they don’t confirm Bernanke by the 31st when his term runs out. The rules say the Vice-Chairman takes over in the absence of the Chairman, but Bernanke is also in the midst of a 14 year term serving on the board so he won’t really be absent.

Disgusted

January 23rd, 2010
10:56 am

Obama and his supporters deserve all this trouble. This Senate requirement of a 60-vote super-majority for any kind of action should have been discarded many years ago as essentially undemocratic. Nothing in the Constitution specifies that 60 votes should be required to pass legislation in either house. Nor is there anything in the Constitution permitting any legislator to put a “hold” on any kind of action.

So let them all stew and then watch the Republicans get rid of the rule once they take power again, as Frist threatened to do when the Democrats were holding up the SC nominations. Harry Reid will be done in by his own deference to “tradition,” and so will a lot of other Democrats once the rule allows them to be tagged as “do-nothings.” The Republicans won’t have to do a thing to change Congress.

RW-(the original)

January 23rd, 2010
11:00 am

There is a tradition that, on his return from France, JEFFERSON called WASHINGTON to account at the breakfast-table for having agreed to a second chamber. “Why,” asked Washington, “did you pour that coffee into your saucer.” “To cool it,” quoth Jefferson. “Even so,” said Washington, “we pour LEGISLATION into the senatorial saucer to cool it.”

Southern Comfort

January 23rd, 2010
11:00 am

Paul

Sounds like ankle grabbing time…

RW

That sounds like good punishment for Congress, but think of the hell that would put America thru. You’re talking about giving control of the Fed to people who can’t pass a single bill without stuffing in something extra and totally unrelated.

DoggoneGA

January 23rd, 2010
11:01 am

“Nothing in the Constitution specifies that 60 votes should be required to pass legislation in either house”

Strictly speaking, it still isn’t. What the 60 votes are for is to end a filibuster, except under current rules there doesn’t actually have to BE a filibuster…only the threat of one. Which is why *I* refer to them as “non-existent” filibusters.

It still only takes 51 votes to pass a bill, but if there’s a threat of a filibuster then it takes 60 votes just to bring the bill up FOR a vote.

And I think Reid needs to stop letting the threat control what he does. He should make them stand up in the Senate chamber and go on record, EVERY time, as filibustering a bill. Make them hand the Democrats a campaign subject every time. “The Republicans have blocked this bill, and this bill, and this bill, ad infinitum”

DoggoneGA

January 23rd, 2010
11:03 am

“So let them all stew and then watch the Republicans get rid of the rule once they take power again”

Not likely any time in the near future. The “60 vote” rule is not a law, it is a rule of the Senate…and it takes 67 votes to change the rules of the Senate.

Disgusted

January 23rd, 2010
11:05 am

What the 60 votes are for is to end a filibuster. . .

Please point me to the section of the Constitution that discusses filibusters and outlines the procedures for them.

My comment stands.

RW-(the original)

January 23rd, 2010
11:06 am

SoCo,

You presuppose that we even need the Federal Reserve Board and maybe we do, but I bet we’d do just fine without most of these supposedly necessary government bureaucracies.

DoggoneGA

January 23rd, 2010
11:07 am

“Please point me to the section of the Constitution that discusses filibusters and outlines the procedures for them”

“Each House may determine the Rules of its Proceedings”

Southern Comfort

January 23rd, 2010
11:11 am

RW

Touche!!! Didn’t think of it from that angle. Do away with the Fed and return power to the Treasury. I know there was talk before about abolishing the Fed. I’m not even sure of what their purpose is other than to hold meetings.

Dusty

January 23rd, 2010
11:12 am

Well, good morning..

Paul,

I couldn’t help but laugh over Peggy Noonan’s “nuts and creeps”. Trying to decide my personal polkitical tag I settled on “cuts and keeps”, particularly in the area of taxes. So I guess I remain in the Republican Domain even with its fringes.

Southern Comfort,

I like your line on the Bernanke process i.e. “trying to hire a 5 star chef who has never been in a kitchen”. .Bernanke has surely been in the kitchen and exudes capability. I hate to say he “seems” so reliable and honest as such “feelings” without facts can lead to miscalculations. But I like him. Hope he stays.

Quagmire

January 23rd, 2010
11:18 am

“fake “conservatives” and spineless “liberals”

Can’t remember the last time I saw a liberal with a spine. But anyway, wow what a week. Watching the election results coming in Tuesday night, it was interesting switching between CNN, MSNBC, and Fox News. DNCNN essentially kept running the Larry King Show up to the bitter end – I’m so sure they’d have done that had it been a Democrat winning a US Senate seat held for nearly half a century by a Republican in a deep red state. PMSNBC had Rachel Maddow, and I kinda like her – she’s fair, not snide, and not full of wretched liberal anger and hatred like, say, Keith Olbermann. Fox News of course was the most interesting, especially when they had a studio set up with about 50 mostly Obama voters from Mass and their thoughts on the election (now that was an eye opener). And how about that video of the Reid and Brown meeting? You could have cut that air with a knife. Enjoy your last year in the Senate, Reid.

Back to Olbermann. Huh? You mean the main stream DNC media didn’t report about his little bedwetting liberal tirade on the front pages like they do every time a Republican Conservative sneezes and take it out of context? Basically, the poor little wretched liberal had a meltdown, calling Brown “an irresponsible, homophobic, racist, reactionary, ex-nude model, tea bagging, supporter of violence against women and against politicians with whom he disagrees.” Well, at least Jon Stewart called that wretch out on his words. Can you imagine the uproar in the main stream DNC media from the New York Times to the LA Times to ABC/CBS/NBC/CNN/MSNBC had Hannity said something as vitriolic and hateful – not to mention LIES – about Democrat who won a nearly half century old Senate seat held by a Republican in a deep red state? I can’t even imagine. Oh, actually, yes I can. They do it daily every time a Conservative Republican wakes up to go to work.

But enough of that. President Obama & Co. are apparently all upset about that radical right wing Supreme Court decision on campaign finance. Isn’t it funny listening to all the media pundits wet themselves every time a SC decision doesn’t go their way and claim the court is out of control? Sayeth the Commander In Chief on the decision: “It gives the special interest lobbyists new leverage to spend millions on advertising to persuade elected officials to vote their way — or to punish those who don’t.” Interesting. Methinks the Madam Speaker Pelosi does a good job of punishing those who don’t vote HER way – just ask the Republican US Rep. Bachmann from Minnesota who’s at the top of her hit list.

But maybe this is why Obama & Co. are so upset:

“Jan. 22 (Bloomberg) — U.S. investors overwhelmingly see President Barack Obama as anti-business and question his ability to manage a financial crisis, according to a Bloomberg survey. The global quarterly poll of investors and analysts who are Bloomberg subscribers finds that 77 percent of U.S. respondents believe Obama is too anti-business and four-out-of-five are only somewhat confident or not confident of his ability to handle a financial emergency. The poll also finds a decline in Obama’s overall favorability rating one year after taking office. He is viewed favorably by 27 percent of U.S. investors. In an October poll, 32 percent in the U.S. held a positive impression.”

It’s going to be a good year.

Quagmire

January 23rd, 2010
11:20 am

““Nothing in the Constitution specifies that 60 votes should be required to pass legislation in either house”

Isn’t it interesting watching liberals attempt to take over the US government like a dictatorship and be arrogantly proud of it? These same people think they are entitled to unending and unchecked power.

Well, in Mass, the people checked up.

Dusty

January 23rd, 2010
11:21 am

Now Now, RW

I was going to suggest that you be a new CZAR of Something or Other . Then you want to cut the gov bureauracracies just as I thought of something important like S or O. .I”m afraid you will never be president of Herzegovia or any other place else I can’t spell.

I had such hope.

Soothsayer

January 23rd, 2010
11:22 am

With this is mind, let’s examine the incentives built into the Federal Reserve policy of super-low interest rates and loose lending (”easy credit”). The fundamental idea here is straightfoward: consumers have limitless desires, and all we need to do to reinvigorate consumer spending is make borrowing more money both cheap and convenient/easy.

But what about the hidden incentives and disincentives? This policy is incredibly perverse in several profound ways:

1. it provides a powerful disincentive to saving (accumulating capital)

2. it offers a powerful incentive to speculate with “free money” provided by lenders

3. it provides a powerful incentive to leverage a small amount of capital/cash into gigantic bets via “easy money” (3% down payment mortgages, etc.)

4. it rewards risk and destroys moral hazard because the losses incurred by the borrower deploying massive leverage are extremely modest (3% down isn’t much to lose, so why not gamble that housing with rise 30% from here?)

5. it incentivizes a feedback loop of ever-expanding bets, leverage and borrowing (i.e. housing speculators buying a second, third and fourth home because they made a killing on their first house) which “rewards” the speculative mania with ever higher assets prices as this specious “demand” grows with expanding leverage and debt.

6. In a financial system which actively suppresses interest rates, then capital earns virtually nothing. Entrepreneurs have no incentive to be prudent in their borrowing, and holders of capital are left with no choice but speculation in risky assets lest their capital melt away in an engineered environment of “benign” (slow steady erosion of capital) inflation. Recall that “low” 2.5% inflation will rob you of a third of your capital every decade.

This is exactly the trap into which pension funds fell: required by actuary models to earn 6%, faced with a Fed-manipulated yield of 2%, they were forced to speculate in real estate, stocks and derivatives to reach the 6% yield they needed.

RW-(the original)

January 23rd, 2010
11:26 am

Dusty,

I could always be persuaded to change my mind if I get to be in charge.

Soothsayer

January 23rd, 2010
11:29 am

One of the key mechanisms financial Elites use to create a simulacrum of widespread prosperity is a real estate bubble. Homeownership in the U.S. is now around 67% of the households, though it is probably heading down to around 60-62% as foreclosures continue climbing.

The homeownership rate in China is much higher–around 85%, for the reason explained here before: citizens were deeded their homes for very modest sums in the early 1980s. (All land is owned by the government; it is only leased to private owners.)

With real estate so widely dispersed among the populace, then any rise in real estate prices boosts assets and lends an air of prosperity to most of the public. This bubble triggers “the wealth effect,” causing people to feel wealthier even when they haven’t sold their homes and taken an actual profit. This encourages spending and borrowing, propping up the status quo without actually redistributing income, lowering taxes or effecting any actual change in the imbalance of power/wealth between the Elites and the public.

The easiest way to create a real estate bubble–lower interest rates and make borrowing easy easy easy–also encourages speculation (feeding the bubble frenzy), discourages saving and radically increases the general appetite for risk.

If real estate is leaping by 30% a year, and savings accounts draw 3% or less, then where are you going to put your cash? Low rates and easy money mean that cash can be leveraged via a mortgage.

But unfortunately for both the financial Elites and the public, all bubbles eventually pop–and the longer they are inflated, the bigger the implosion.

Red All Over

January 23rd, 2010
11:30 am

The reason we need the Fed….

This morning, I was reading the AJC printed newspaper. Do you think they could use cheaper ink and even less absorbent paper? My silk shirt is ruined, my hands are filthy. You should see the upper torso of my blow up doll. Hand prints all over. Yuck! Why couldn’t the AJC use disappearing ink, cause then I wouldn’t have to dry clean my shirt, (or give my blow up doll ANOTHER sponge bath.)

Anyway, I read this: “How would you like for an agent of The Imperial Federal Government of the United States to come to you and tell you that 50 percent of the money in your 401(k) plan had to be withdrawn and invested in Treasuries”

That was Neal Boortz today, (the Russian soup king). Neal fails to realize that if only the Imperial Feds HAD done that in 2007. People lost 50% of their 401k anyway, but it went to Royal Pirates.

…and that’s everything from soup to nutz on Neal Boortz.
…..

…and THAT’S Y we need Da Fed.

Southern Comfort

January 23rd, 2010
11:30 am

I nominate RW for the position of Cut out the Crap Czar….

AmVet

January 23rd, 2010
11:30 am

Great call Y. I always loved the feel of and the timing signatures in that song.

One of several very good bands to come out of those psychedelic SF days, they really hit the big time with that tune.

Another of those multi-talented, powerhouse groups…

One generation got old, one generation got soul.

http://www.youtube.com/watch?v=I_0sg0XDfmg

Morass, I’m sure your memory is particularly selective

There is nothing federal about the Federal Reserve and there aren’t any reserves. The name and the entire organization is a deception to make the gullible American people think that America’s central bank operates in the public interest.

“I have two great enemies, the Southern Army in front of me and the Bankers in the rear. Of the two, the one at my rear is my greatest foe.. corporations have been enthroned and an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong its reign…until the wealth is aggregated in the hands of the few, and the Republic is destroyed.”

Normal

January 23rd, 2010
11:36 am

Good morning all,
Totally off topic, but…

Just got in from a morning with my Grand Son. Went to Lowe’s for the “Build a Project” class and breakfast.

While on my way back I was listening to NPR and their “Wait. Wait, Don’t Tell Me” show. They were discussing the the Supreme Court’s decision to allow unlimited money in the election process. One said, that with all of the advertising experience they have, they could package candidates with certain products and kill two birds with one stone. Example: Polosi and botox, McCain and Depends…but my favorite was…Republicans, the other white meat… :D

Quagmire

January 23rd, 2010
11:38 am

“With this is mind, let’s examine the incentives built into the Federal Reserve policy of super-low interest rates and loose lending (”easy credit”).”

Liberal translation: “fair housing” though “easy loans” has failed and Barney Frank and Chris Dodd should have listened to the Bush administration in the mid-00’s and increased regulations on Fannie Mae and Freddie Mac.

“Homeownership in the U.S. is now around 67% of the households, though it is probably heading down to around 60-62% as foreclosures continue climbing.”

The last time home ownership was in the low 60th percentile was in the early 1970s – back when people knew the value of money.

What’s up with Soothsayer’s cut and paste posts anyway? Does s/he have an independent and original thought?

DoggoneGA

January 23rd, 2010
11:42 am

“Does s/he have an independent and original thought?”

Saith him who included a quote in his post. Do YOU ever have an original thought?

Quagmire

January 23rd, 2010
11:44 am

“That was Neal Boortz today, (the Russian soup king). Neal fails to realize that if only the Imperial Feds HAD done that in 2007. People lost 50% of their 401k anyway, but it went to Royal Pirates.”

That’s not the point, big Red. WHY should the government take your money BY FORCE and shove it in a US treasury (note or bond) that even the Russians are starting to shy away from? You didn’t get the memo?

Financial Times 1/21/2010 — “Russia’s central bank revealed yesterday that it had started buying Canadian dollars and securities in an attempt to diversify its foreign exchange reserves. Analysts said the move could be a sign of increased diversification of emerging market central bank assets away from the US dollar and into investments denominated in other commodity-linked currencies, such as the Australian dollar.”

Dusty

January 23rd, 2010
11:47 am

Thank you, RW

I see that you are FLEXIBLE. As the pillar of present government policy “Change” seems to be cracking, I now appoint you as CZAR of Small Change. The substance of Small Change is what is currently passing through my pocketbook so I consider this very important. And…we all know that after STIMULUS comes Small Change.

You are now in charge. Every Friday night you can play “Pennies from Heaven” as that is the only place from whence they will now come. I will let you manage my piggy bank as soon as possible.

This job will last for many years to come. At least until 2012. Best wishes!

Now I leave to spend some small change so I shall return very soon..

Sominex

January 23rd, 2010
11:49 am

Homeownership in China is high because they make their homes out of straw. If something knocks their homes down, all they have to do is mow the lawn and voila, they got a new home.

We make our homes out of dreams. If something wakes us up we simply find a new drug, and voila, a new dream home, and we’re back to being Queen for a Day, till they draw back the curtain on another wall street wizard…..

The problem is that we ARE in Kansas forever more…..the problem is that people keep building the same home out of the derivatives that dreams are made of.

We’d be better off in a trailer along tornado alley in the flood plain next to a lightning-strike-prone dry tinder forest filled with tumble weed.

Taxpayer

January 23rd, 2010
11:55 am

John Galt Jr.

January 23rd, 2010
10:38 am

Dear John,

Businesses come and go. Yours is not the first and it will not be the last. Perhaps closing up your business will be the best thing that will happen to your employees, perhaps not. Perhaps it will be the best thing for you and your family, perhaps not. I certainly hope you find a better way to make your decisions than on the basis of the amount of taxes you do or do not pay though for I consider that rather sad. As for myself, I have been retired for nine years now and I’m in my mid fifties and enjoying more of what life has to offer with each passing day. Who knows, I may even live long enough to collect some social security if I live another ten years. Time will tell.

Enjoy.

Southern Comfort

January 23rd, 2010
11:56 am

“We’d be better off in a trailer along tornado alley in the flood plain next to a lightning-strike-prone dry tinder forest filled with tumble weed.”

Living like that, we definitely need health-care reform. Either that, or invest in a great life insurance policy.

The American People

January 23rd, 2010
11:57 am

Obama and his inner circle of cronies are crooked. Down With Dems In 2K10

AmVet

January 23rd, 2010
11:58 am

Kneel Boar-tz and his fellow talking marionettes will always shuck and grin for their fascist buddies in power. The love children of of Ronnie and Ollie, as long as one is not a commie, any and all crimes are fine with them. In fact, useful in many cases.

And the supposed Libertarians (GOP lites) , fake conservatives and Ayn Randian dupes will hang on his every nonsensical and self-righteous word as sagacity.

These wretched little mooches and cowards dupe the faithful into thinking they are champions of the little man, when in reality they are willing agents for those will destroy capitalism and the Republic.

Dusty

January 23rd, 2010
11:59 am

Seminex,

Be careful now. You will hurt RedNeck’s feelings with that “trailer along tornado alley in the flood plain next to a lightning strike-prone dry tinder forest filled with tumble weed”. You are talking about his PLACE even if you did not mention the pink flamingos.

Have some mercy. He delivers the fuel of America. BEER, that is.

Bye now.

Quagmire

January 23rd, 2010
12:06 pm

“We’d be better off in a trailer along tornado alley in the flood plain next to a lightning-strike-prone dry tender forest filled with tumble weed.”

I nominate that for short clip blog post of the year – it was only missing a comment about being next to a US Army Corps. Of Engineers-New Orleans managed levee.

“These wretched little mooches and cowards dupe the faithful into thinking they are champions of the little man, when in reality they are willing agents for those will destroy capitalism and the Republic.”

Go easy on us, Keith…errr… AmVet.

Destroying capitalism. Now that’s rich!

AmVet

January 23rd, 2010
12:09 pm

Sorry Morass, I “don’t go easy” on criminals or traitors.

Like you amnesty lovers in the Anti-Law & Order Parties do…

Marc

January 23rd, 2010
12:09 pm

Open letter to Congress: THROW BERNANKE OUT!!!!! HE IS ONLY INTERESTED IN RUNNING THE ECONOMY FOR THE BENEFIT OF THE WALL STREET GANG!!!!! HE IS NOT INTERESTED IN THE MIDDLE CLASS AT ALL!!!!
MAIN STREET YES, WALL STREET NO!!!!

Kamchak

January 23rd, 2010
12:11 pm

Quagmire

January 23rd, 2010
12:14 pm

“Sorry Morass, I “don’t go easy” on criminals or traitors. Like you amnesty lovers in the Anti-Law & Order Parties do…”

Amnesty? Huh? WHAT?

Anti-law? WHAT? Attempting to ram Socialist Care down America’s throats against their will was a Republican idea? Establishing “czars” to take over and control business is a Republican idea?

WTF is AmVet talking about?

Well, Hugo the Horrible Chavez said that the US used an underground nuke test to cause the Haiti earthquake, so at this juncture, anything is possible.

AmVet

January 23rd, 2010
12:14 pm

“These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people’s money to settle the quarrel.” ~Abraham Lincoln in a speech to Illinois legislature, Jan. 1837.

If only an uninvolved and unenlightened America had listened closely to him.

But I guess unbridled avarice and “an orgy of excess and reckless behavior” was too beguiling…

Quagmire

January 23rd, 2010
12:18 pm

Hey AmVet, here’s a quote for you:

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”– Sir Winston Churchill

I’ll take the former, thanks.

Gifted Speaker

January 23rd, 2010
12:27 pm

NASCAR has issued an edict: They WANT drivers to be more aggressive and bump each other like the old days.

It seems that ratings have crashed. (write your own joke there).

This is why there will always be Rushannity. People want someone acting crazy. Racing reckless is crazy. You can get killed.

Crazy talk is good. I’ll say it again. Crazy talk, for lack of a better phrase, is good. Crazy talk sells. Crazy talk works. Crazy talk draws the crowds and the attention. We WANT histrionic gesticulations. We want hate speak. We want lies and foamed incantations.

Why? Why Glenn Beck?

Because life is boring. Without wrecks, NASCAR is boring.

You have to “Howard Stern” a little, or nobody will read you.

DoggoneGA

January 23rd, 2010
12:32 pm

“I’ll take the former, thanks”

Churchill could just as accurately said “The inherent vice of capitalism is the unequal sharing of miseries; the inherent virtue of socialism is the equal sharing of miseries”

Would you still take the first?

Redneck Convert (R--and proud of it)

January 23rd, 2010
12:34 pm

NASCAR has issued an edict: They WANT drivers to be more aggressive and bump each other like the old days.

Leave NASCAR out of this. And my trailer too, for that matter. They never done nothing to you all.

@@

January 23rd, 2010
12:38 pm

Geez, AmVet…could you possibly come up with a better line?

Just wondering…but every time you mention going out, it’s to get some wings. Do you perchance frequent those eateries where “trivial pursuit” is all the rage.

When you meet a woman, do you tell her she has beautiful eyes and a warm smile? Do you ask if she’d like to see your gold medallion?