12:00 AM, Feb 15, 2014 • By IRWIN M. STELZER
Janet Yellen made her first appearance before Congress since assuming the chair of the Federal Reserve Board and produced the yawns she was seeking, even thanking several of her interlocutors for calling her “unexciting.” Knowing that some Fed critics are seeking to rein in the bank’s independence (several of these critics would like to eliminate the Fed entirely), Yellen offered to stay for as long as necessary—six hours, as it turned out—in the hope that demonstrating such heightened transparency will head off legislation to politicize the central bank. The examples of Japan and Britain, where the central bankers have become aligned with Prime Minister Shinzō Abe and Chancellor of the Exchequer George Osborne, respectively, apparently do not appeal to her.
She won nods of approval for using simple sentences rather than the more opaque and convoluted structures preferred by her predecessors. Republican congresswoman Shelley Moore Capito thanked her, “I’ve understood more of what you’ve said today than I have probably [from] the last two folks that were in front of us.”
What Yellen said was a mixture of the expected and, for those who listen carefully, a clue to a subtle but real change in policy to reflect Yellen’s diagnosis of what ails the labor market. The Fed chair went to great lengths to give the impression that policy would be steady as she goes. “Let me emphasize. I expect a great deal of continuity in the approach to monetary policy”; we will continue reducing asset purchases at the rate of $10 billion per month and keeping interest rates at zero. But she added that Fed policy “is not on a pre-set course.” In other words, we will keep doing what we have been doing unless we decide to change our policy. So much for what has come to be called “forward guidance,” the attempt by the Fed and other central banks to let the public, and especially the markets, know where policy is headed. As in Britain, where Societe Generale economists have declared Bank of England “forward guidance, R.I.P.” so, too, in the U.S. Yellen announced that a fall to the 6.5 percent unemployment rate that the Fed had said would trigger tighter monetary policy is not an adequate gauge of labor market health, and that the Fed’s zero interest rate policy will continue “well past the time” that the unemployment rate falls from its current level of 6.6 percent to the now-discarded trigger of 6.5 percent.
Quite sensibly, she intends to look at the number of the long-term unemployed, the labor-force participation rate, and the number of workers involuntarily working only part time, in order to get a true picture of labor-market conditions. Not to mention studying incoming data, including another jobs report that will be available to the monetary policy committee when it meets again on March 18-19.
By that time we will know whether recent unhappy news is a mere bump on the road to the more robust recovery that forecasters were predicting at the end of last year, or a more serious and permanent setback. Recall:
· Retail sales fell by 0.4 percent in January, and December sales figures were revised to -0.1 percent from +0.2 percent. “A significant disappointment,” say Goldman Sachs’s economists. So, too, the drop in industrial production in January.
· Auto sales seem to be weakening sufficiently to have automakers nervous enough to reinstitute discounts.
· Housing markets are coming off the boil as mortgage rates inch up and more and more potential buyers insist on a “second look” at available properties rather than immediately entering bids.
· Jobs reports for December and January were not encouraging.
· We are experiencing “A profit cycle that may be peaking,” according to the Lindsey Group.
· International markets are in turmoil and in denial: Argentina’s cabinet minister blames his country’s turmoil on economists, “I know all of them [the economists]. They are all undercover agents…. Independent, objective economists don’t exist.”
1:16 AM, Jan 29, 2014 • By STEPHEN F. HAYES
President Barack Obama delivered a State of the Union Address on Tuesday that was important less for what he said than for what it says about him.
9:01 AM, Dec 6, 2013 • By DANIEL HALPER
The press covering Joe Biden's trip Asia caught an unusually frank comment from the vice president. Biden, speaking about himself, reportedly said that his "profound insights on policy are vastly exaggerated, but we do have profound respect for the people of South Korea."
9:30 AM, Nov 30, 2013 • By IRWIN M. STELZER
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.
Don’t ask the Davos forum.Dec 2, 2013, Vol. 19, No. 12 • By DAVID ADESNIK
For just a moment, let’s pretend the GOP really were waging a “war on women.” Where would you go to find less inequality and chauvinism? According to the World Economic Forum in Davos, Switzerland, three of the best options for women seeking greater equality are Cuba, Nicaragua, and Burundi.
12:00 AM, Oct 26, 2013 • By IRWIN M. STELZER
“The thrill is gone,” famously warbled B.B. King among others. And so it is for watchers of the U.S. economic scene. The eighteenth partial government shutdown is over, World War II veterans can legally visit the monument to their bravery, hikers can trek through national parks, and the National Institute of Health can resume its cancer research—all impossible to do when the Obama administration prevented amelioration of the hurt inflicted by the shutdown in order to maximize voter anger at the Republican party.
5:32 PM, Oct 17, 2013 • By MICHAEL WARREN
Louisana governor Bobby Jindal, the two-term Republican and potential presidential candidate, has announced the formation of a new group called America Next. The organization bills itself as a "conservative policy group" that aims to "focus on winning a war of ideas." Here's an excerpt from a mission statement by Jindal on the new group's website:
12:00 AM, Sep 28, 2013 • By IRWIN M. STELZER
If not Janet Yellen, who? Larry Summers wanted the job, but couldn’t win the support of leftish Democrats and feminists. Former Treasury Secretary Tim Geithner, who can have Ben Bernanke’s job as chairman of the Federal Reserve board for the asking, is said to have told the White House that he doesn’t want the post.
11:24 AM, Sep 11, 2013 • By DANIEL HALPER
First Lady Michelle Obama's office is holding a conference call with reporters now to tout her "New Effort To Encourage Everyone to Drink More Water," according to the White House. The content of the call is "embargoed until 6:00AM ET on Thursday, September 12."
Obama: I hear folks saying, "Katie, bar the door, let's just go in and knock out Syria."7:03 AM, Jun 18, 2013 • By DANIEL HALPER
Charlie Rose last night asked President Obama his new Syria policy. The president first objected to it being called a new policy. "I'm not sure you can characterize this as a new policy. This is consistent with the policy that I've had throughout," he said.
8:01 AM, Jun 15, 2013 • By LEE SMITH
Thursday the White House announced that the American intelligence community assesses, with a level of high confidence, that the regime of Syrian president Bashar al-Assad used chemical weapons against the opposition multiple times, in a limited fashion. Now that it is clear Assad has crossed the Obama red line by using chemical weapons, the question is, has this changed the president’s “calculus,” as he said it might? The media is reporting that it has.
7:52 AM, Apr 9, 2013 • By DANIEL HALPER
A list of rappers and stars, including Russell Simmons, LL Cool J, Lil Wayne, Ludacris, Kim Kardashian, and many more, have written an open letter to President Obama to ask that he ease the nation's drug policy. They also ask that prison policy be changed, too.
Honoring its heritage.2:45 PM, Feb 5, 2013 • By JUDY SHELTON
In these days of unprecedented monetary activism by the Federal Reserve, including massive purchases every month of federal government debt, it’s nice to see even a fledgling amount of resistance from attentive citizens. A bill now making its way through the Virginia legislature would establish a joint subcommittee “to study the feasibility of a metallic-based monetary unit.”