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
So it’s come to this. A former professor of economics turned central banker can keep policymakers and investors on the edge of their seats, waiting for his latest pronouncement. That tells us two things.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
With the American economy still struggling to recover and its long-term structural strength in question, policymakers and politicians are focusing on the Federal Reserve.Read more
New York Times: "Pro-American Militia Members Die in Blast in Iraq"
David Beckworth and Ramesh Ponnuru: "Tight Budgets, Loose Money: Why Both Liberals and Conservatives Are Wrong About How to Fix the Economy"Read more
It didn’t take long for the snark attack to begin among the Big Money crowd. Less than 24 hours after the Federal Reserve announced its latest easy-money plan to goose the flaccid U.S economy, investors were already deriding “Operation Twist” as “Operation Fail.” Almost everything that was supposed to go up went down—and vice versa. Global stock markets plunged, oil prices fell, the dollar rose, and inflation expectations tumbled despite the central bank’s decision to swap $400 billion of short-term Treasury bonds for ones of longer duration over the next nine months. It was like Opposite Day on Wall Street.Read more
In the Washington Post, Camden Fine, president and chief executive of the Independent Community Bankers of America, writes, “I was astounded this month when the Federal Reserve announced its intention to keep interest rates at zero percent for at least the next two years. I kept staring at that number, 2013, assuming that it was a mistake.” He continues, “In my view, the Fed’s policy is nothing more than a backdoor bailout for the Wall Street mega-banks and investment houses; it amounts to the back of the hand for the community banks of this country.”Read more
President Obama blames the recent turmoil in financial markets on floods in Japan and Republicans who won’t raise taxes. Republicans blame roiling markets on the president and Democrats who won’t cut spending. The Europeans blame short-sellers.Read more
Norwegian Prime Minister Jens Stoltenberg: "I have message to the person who attacked us and the people who are behind it: You're not going to destroy us. You're not destroying our democracy and our work for a better world. We're a small country but a very proud country. No one can bomb us to be quiet. No one can shoot us to be quiet. No one can ever scare us from being Norway."Read more
The U.S. women's national team will advance to the finals of the women's World Cup.
Federal Reserve chair Ben Bernanke says he's open to another round of quantitative easing.
Meanwhile, the price of gold got a big boost after Bernanke's comments.Read more
It’s easy to get caught up in the details of the political battle of the day over the nation’s economic and fiscal health—after all, that’s what we do in Washington. Unfortunately, many of our decision-makers and opinion leaders possess the skills required for political infighting in greater abundance than the capacity for thoughtful analysis. Their focus on the fight and on winning the 24-hour news cycle has produced a country that designs policy for tactical political advantage and not for the efficient use of scarce resources.Read more
The only question now is whether the slowdown in the economy is what economists at the HSBC bank call “a speed bump” on the road to continued recovery, or the first step down the road to a double-dip recession. No less an expert than former Federal Reserve Board chairman Alan Greenspan answers, “I don’t know” when asked whether it’s speed bump or double dip.Read more
The weakening of the dollar since 2008 has added 56.5 cents to the price of gasoline, the congressional Joint Economic Committee (JEC) has found. The average price of gasoline would be $3.40 per gallon, instead of the current average price nationally of nearly $4, if the dollar hadn’t declined.Read more
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