Posts Tagged ‘Federal Reserve’
August 16th, 2010 at 5:06 pm
More Money, More Gold?

With the Federal Reserve announcing it will increase the supply of paper money (i.e. dollars), it is once again time to consider the merits of (re)adopting the Gold Standard to help regulate the value of our nation’s currency.  Gold Standard 2012, a project of the American Principles Project, has a helpful video:

July 16th, 2010 at 12:27 pm
More Troubling Economic News: U.S. Manufacturer Capicity Utilization Slowed in June
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This should be a period of robust cyclical recovery from the past recession, but we received yet another troubling sign from the Federal Reserve yesterday. For the month of June 2010, American manufacturers utilized only 71.4% of productive capacity, down from 71.7% utilization in June.

What this means is that instead of cranking up and increasing velocity, manufacturers decelerated from May to June.  Moreover, this 72% capacity utilization compares with the post-war historical average of 81%.  Translation:  there exists a lot of slack in our economy at a time when we should be expanding.  This news comes on the heels of reports that American companies are hoarding a record $2 trillion rather than spending it on expansion or job creation, and adds to the sense that Obamanomics are subduing our recovery, not stimulating it.

December 11th, 2009 at 12:53 pm
Dr. Krugman Misdiagnoses What Ails the Job Market

In today’s New York Times, economist Paul Krugman seems to think that along with propping up failed financial institutions and distorting the nation’s currency, the Federal Reserve should also play a part in creating jobs. Predictably, the answer is more government spending.

Mr. Bernanke has received a great deal of credit, and rightly so, for his use of unorthodox strategies to contain the damage after Lehman Brothers failed. But both the Fed’s actions, as measured by its expansion of credit, and Mr. Bernanke’s words suggest that the urgency of late 2008 and early 2009 has given way to a curious mix of complacency and fatalism — a sense that the Fed has done enough now that the financial system has stepped back from the brink, even though its own forecasts predict that unemployment will remain punishingly high for at least the next three years.

The most specific, persuasive case I’ve seen for more Fed action comes from Joseph Gagnon, a former Fed staffer now at the Peterson Institute for International Economics. Basing his analysis on the prior work of none other than Mr. Bernanke himself, in his previous incarnation as an economic researcher, Mr. Gagnon urges the Fed to expand credit by buying a further $2 trillion in assets. Such a program could do a lot to promote faster growth, while having hardly any downside.

But there is a downside, and it’s more than immediately exceeding the proposed raise in the national debt by $1.8 trillion. As astute observers of California politics say, the government doesn’t have a revenue problem – it has a spending problem. As I’ve mentioned before, the main impediment to private sector job creation is not access to credit: it’s uncertainty about what the government will regulate or tax next. Some form of human activity has to be taxed in order to pay for “stimulus” policies like the one Krugman supports. Business owners know this because they must identify income before they pay out for services, goods, and yes, people. Adding an employee to the payroll is a tremendously expensive decision that isn’t made easier just because the Federal Reserve makes it easier to get a company credit card. If Washington is serious about job creation it needs to stop spending and taxing other people’s money.

December 3rd, 2009 at 5:55 pm
Obama Kept Larry and Moe; Why Not Curly?

There were three people at the center of the federal government’s response to the economic meltdown during the latter months of 2008. President Obama still employs two. Tim Geithner got a promotion from heading the New York Federal Reserve to Treasury Secretary. Now Fed chief Ben Bernanke is up for rehire. And while the Senate Banking Committee had some heated words for the Fed’s handling of the worsening economic downturn, it offered “measured support” for the man responsible for handling the Fed. This, despite labeling the Fed itself as a “failed” regulator doing a “horrible job.”

And yet, Bernanke is widely expected to be confirmed for a second term. Coupled with Geithner’s tax evasion, one is left to wonder what could have possibly disqualified former Treasury Secretary Hank Paulson from getting a plumb assignment in the Obama Administration.

November 23rd, 2009 at 1:24 pm
Why Is Geithner Denying Responsibility?
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In an uncharacteristically heated exchange last week at the House Joint Economic Committee, Treasury Secretary Timothy Geithner astonisingly denied any responsibility for financial decisions that helped trigger our current downturn.

Representative Kevin Brady (R – Texas) recited a litany of Geithner’s errors and concluded, “the public has lost all confidence in your ability to do the job.”  Peering from behind his oversized forehead and beady little eyes, Geithner replied, “what I can’t take responsibility for is the legacy of crises you’ve bequeathed this country.”

On what planet is Geithner living?

This is the man who, in addition to failing to pay federal income taxes, served as president of the Federal Reserve Bank of New York.  Let’s see…  Chief of the Federal Reserve, driver of the loose money monetary bubble,  in the city that is the financial center of the world, whose speculation and ensuing meltdown sparked the economic downturn… Perhaps he was asleep at his desk throughout his tenure, thereby absolving him from responsibility?

Come to think of it, that might also explain his blatant failure to pay taxes.