In The Courage to Act, former Federal Reserve chairman Ben Bernanke reveals, a little unexpectedly, that he can tell a taut tale well, and in a manner accessible to someone who wouldn’t know a CDO from an Alt-A mortgage. After a likable autobiographical beginning, the book is centered on the Fed's response to the financial crisis that started to unfold just over a year after Bernanke took office in 2006. Bernanke was right to see that catastrophe threatened to engulf more than Wall Street, and he was right to see that, in the much-mocked phrase, something had to be done.
It's easy to criticize the technical aspects of bailouts based on Depression-era powers usable in "unusual and exigent circumstances" and put togetherRead more
The old saying about how banks only loan money to people who don’t need it seems to be coming around again. This after the disaster that followed a policy of lending money, and lots of it, to people who really needed it but weren’t likely to pay it back.Read more
Our economy is increasingly policy-driven, at least in the near- and medium-terms. What Congress and the president do or don’t do, what incoming Federal Reserve Board chairman Janet Yellen does or doesn’t do, will be important determinants of our growth, inflation, and job creation rates. So here is an attempt to see through the mist of obfuscation that is a feature of political and policy-making discourse, and spy the contours of future policy.Read more
Spare a bit of sympathy for the Federal Reserve Board’s monetary policy gurus. They have said they will begin to “taper” their purchases of bonds and mortgages when the unemployment rate falls to 6.5 percent.Read more
Data-driven, legacy-driven. Keep those two descriptives in mind and you will know a good deal about the prospects for a dialing back of asset purchases—“tapering”—by Federal Reserve Board chairman Ben Bernanke.Read more
Until recently it has been fashionable to denigrate the U.S. economic recovery: “America is the best house in a bad neighborhood,” sniffed many analysts. No longer. America is now a very good house in a terrible neighborhood.Read more
The bad news is that there is good news. At least, that’s how many skittish investors in shares and bonds see the increasingly cheery view of the Federal Reserve Board’s monetary policy gurus who concluded last week that downside risk to the economy has diminished since the Fall, and guessed that by the middle of next year the unemployment rate will have fallen from its current level of 7.6 percent to 7 percent, and then to between 6.8 percent and 6.5 percent by the end of 2014.Read more
In a press conference today, the Federal Reserve announced it will keep interest rates low and leave QE3 unchanged, continuing to buy $85 billion a month in bonds to prop up the economy.Read more
This is a good time to see where we have come during the year now coming to a close. Some things haven’t changed very much, or so it might seem. When the year began, households reported that 142 million Americans held jobs; right now, 143 million are in work. The labor force participation rate—the portion of workers in the labor market—was 63.7 percent when we (or some of us) were sleeping off New Year’s Eve hangovers, and now stands at 63.6 percent.Read more
The fiscal cliff is a diversion, designed by politicians to conceal their inability to come to grips with the fact that they continue to spend too much, and refuse to reform a tax structure that reduces the competitiveness of American companies in world markets. No matter what deal is cut, whether before or after the new year, it will at best nibble at the edges of the trillion-dollar annual deficits that are being piled up.Read more
About the only talking point Joe Biden didn’t repeat in his debate with Paul Ryan was the one lionizing President Obama for having saved the country from another Great Depression. Biden used it in his speech at the Democratic convention, as did others, and it remains a hardy perennial of Obama lore. The president, ever immodest, has credited himself for this achievement.Read more
When Federal Reserve chairman Ben Bernanke rushed to the aid of President Obama with an act of raw partisanship called QE3, the media ignored the political implications of this latest plan to print massive amounts of new money to boost the stock market.Read more
Here is an easy way for any non-economist to tell whether an economy is in dire straits: If investors are looking to their central bankers to get them out of the mess created by over-borrowing, ineffective regulation, and political paralysis. Markets unwilling to lend money at reasonable rates?Read more
Federal Reserve Board chairman Ben Bernanke now has two reasons to disappoint those who are hoping he will use his speech next week at the conclave of central bankers in Jackson Hole, Wyoming, to launch the good ship QE3.Read more
Robert Shrum is hoping for an assist from Ben Bernanke. Perhaps, Shrum writes, the chairman will have the courage to pull a John Roberts, launch QE3, and keep a staggering economy sufficiently upright that "Obama may actually be able to run on a decidedly more upbeat path through the fall."Read more
Ross Douthat: "What Mitt Lost While He Won"Read more
Three Republican presidential candidates—Herman Cain, Ron Paul, and Newt Gingrich—have at least hinted about the desirability of a return to the gold standard. The four top Republican congressional leaders recently called on the Federal Reserve to curb its interventions in the U.S. economy. In early October the Heritage Foundation held a two-day sound money conference in which both keynote speakers—New York investment banker Lewis Lehrman and former presidential candidate Steve Forbes—called for adoption of a gold-backed dollar. Advocating the replacement of Fed chairman Ben Bernanke has become aRead more
The Ben Bernanke word cloud: "For bonus points try to find the word 'jobs' in there."Read more
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