DEBATING BERNANKE’S REAPPOINTMENT: WHY, OBAMA, WHY?, WHO IS KILLING REFORM?

August 26th, 2009 - by: danny

SOME NEWS WE NEED TO KNOW
BERNANKE CHALLENGED
SIBEL EDWARDS: THE FULL TRANSCRIPT

Our Future.org WHO IS PAYING TO KILL HEALTH CARE?

More on Lockerbi: News covered there but not here:
“Vital Lockerbie evidence was tampered with”

U.S. Raises Estimate for 10-Year Deficit to $9 Trillion

The Obama administration, citing an economic downturn that
has been deeper than it had first thought, raised its
estimate on Tuesday of the government’s deficit over the next
decade to $9 trillion from $7.1 trillion.

COMMENT BY ECONOMIC POLICY INSTITUTE: New deficit numbers underscore the depth of the downturn

Statement by John Irons, EPI Research and Policy Director:

The While House on August 25 released an updated estimate of the federal budget deficit, which shows it now totals $1.6 trillion or 11.2% of gross domestic product. This is $262 billion less than what was estimated in May. The Congressional Budget Office showed a smaller improvement. The new numbers confirm earlier EPI research showing that the recession is the main cause of the deficit deterioration. Lower incomes, higher unemployment, and reduced business activity have all combined to produce the lowest level of federal revenues — as a portion of GDP — in more than 50 years. Policy measures aimed at stabilizing the economy have also added to the deficit, though to a much smaller extent: Stimulus investments made under the American Recovery and Reinvestment Act accounts for only about one-eighth of the deterioration in the 2009 deficit relative to pre-recession estimates.

Some will use this report as an opportunity to call for immediate action to reduce the deficit, or to suggest that we need to abandon or delay major policy initiatives, like health care reform. But given that the current deficit is largely caused by the recession, any near-term deficit reduction would choke off the recovery and, in the end, would be both irresponsible and self-defeating.

JUDGE SAYS BANKS CANNOT HIDE RECORDS

“Manhattan Chief U.S. District Judge Loretta Preska rejected the central bank’s argument that the records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions. The collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression,” according to the lawsuit that led to yesterday’s ruling.”

BOSTON GLOBE:
BARNEY FRANK: FRINANCIAL REFORMER

Bernanke’s Self-Promotional Reappointment Campaign A Stunning Success

Mish: Ben Bernanke’s self-promotional media blitz culminating with Orwellian Madness “Bernanke Saved The World”, was a stunning success for Bernanke in his bid to be reappointed Fed Chairman. Unfortunately, Bernanke’s win is everyone else’s loss. Bloomberg tells the story of his reappointment in Bernanke to Be Nominated for Second Fed Term by Obama.
Praise Unwarranted And Galling

Check out some of the misguided praise from the article:

Richard Berner, co-head of global economics at Morgan Stanley in New York says “It’s not just that he’s done a great job of dealing creatively with the financial crisis, he has the capacity to deal with the challenges that lie ahead — continuing to help the economy and markets heal and engineering the exit strategy when it’s appropriate to do so.”

“Bernanke is a source of certainty,” according to Guy Lebas, chief-fixed income strategist at Janney Montgomery Scott LLC.

Elsewhere, Nouriel Roubini and others have called for the reappointment of Bernanke. A few level-headed thinkers like John Hussman see things quite differently.

Bernanke Sees A Recovery

Inquiring minds are reading John Hussman’s article: Bernanke Sees A Recovery – How Would He Know?

SENATOR BERNIE SANDERS COMMENTS: Vt. Sen. Sanders Statement on Bernanke Nomination

BURLINGTON, Vt. — Aug. 25 — Sen. Bernie Sanders (I-Vt.) today issued the following statement on the nomination of Ben S. Bernanke for another term as chairman of the Federal Reserve:

“As a result of the greed, irresponsibility and illegal behavior of Wall Street our country has experienced the worst economic decline since the Great Depression. Mr. Bernanke was head of the Fed and the nation’s chief economist as this crisis, driven by reckless speculation, developed. Tragically, like the rest of the Bush administration, he was asleep at the wheel during this period and did nothing to move our financial system onto safer grounds.

“As the middle class of this country continues to shrink, we need a chairman of the Federal Reserve who is more concerned about expanding the productive economy — increasing decent-paying jobs for all Americans — than continuing to fan the flames of Wall Street greed and outrageous compensation packages.”

FINANCIAL TIMES: THE CASE AGAINST BERNANKE’S REAPPOINTMENT

Barack Obama has rendered one of his most important post-crisis verdicts: Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. This is a very shortsighted decision. While America’s head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing programme, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.

Mr Bernanke made three critical mistakes in his pre-Lehman incarnation: First, and foremost, he was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles. On this count, he stood with his predecessor – serial bubble-blowing Alan Greenspan – who argued that monetary authorities are best positioned to clean up the mess after the bursting of asset bubbles rather than to pre-empt the damage. As a corollary to this approach, both Mr Bernanke and Mr Greenspan drew the wrong conclusions from post-bubble strategies earlier in this decade put in place after the bursting of the equity bubble in 2000. In retrospect, the Fed’s injection of excess liquidity in 2001-2003, which Mr Bernanke endorsed with fervour, played a key role in setting the stage for the lethal mix of property and credit bubbles.

Second, Mr Bernanke was the intellectual champion of the “global saving glut” defence that exonerated the US from its bubble-prone tendencies and pinned the blame on surplus savers in Asia. While there is no denying the demand for dollar assets by foreign creditors, it is absurd to blame overseas lenders for reckless behaviour by Americans that a US central bank should have contained. Asia’s surplus savers had nothing to do with America’s irresponsible penchant for leveraging a housing bubble and using the proceeds to fund consumption. Mr Bernanke’s saving glut argument was at the core of a deep-seated US denial that failed to look in the mirror and pinned blame on others. Read the rest.

FEDERAL RESERVE CREATES INTERACTIVE MAPS OF CREDIT PROBLEMS

“The Federal Reserve considers the record rate of mortgage delinquencies, foreclosures and their impacts on communities an urgent problem. The Federal Reserve Bank of New York has therefore used its expertise and knowledge to provide detailed data on US credit conditions to the public in order to establish a strong body of factual data for use in forming policy decisions and developing mortgage foreclosure mitigation efforts.

Wall Street Journal: Labor Leader Named Head of New York Fed

The Federal Reserve chose a labor leader to succeed a former Goldman Sachs executive as the chairman of the Federal Reserve Board of New York’s private-sector board of directors.

Denis Hughes, president of the New York state branch of the AFL-CIO, had been serving as acting chairman of the New York Fed board since May, when Stephen Friedman stepped down from the position.

RHODE ISLAND TO SHUT DOWN STATE GOVERNMENT FOR 12 DAYS TO SAVE MINEY

U.S. NEEDS $1.6 TRILLION AND CAN’T GET IT ANYWHERE

ELLEN BROWN: WHY MONEY IS COLLAPSING AND WHY CENTRAL BANKS NEED ADULT SUPERVISION

VIDEO CLIP OF ELIZABETH WARREN: LISTEN CAREFULLY–SHE TELLS IT LIKE IT REALLY IS

The News Dissector