When Federal Reserve Chairman Ben Bernanke delivered testimony to the Joint Economic Committee yesterday, most of the focus was on potential steps the Fed may consider to boost the domestic economy. And to be sure, Bernanke's willingness to act is critically important.
But there was something else the Fed chairman told lawmakers that stood out for me. MSNBC's "The Ed Show" aired this Bernanke quote last night.
For those who can't watch clips online, the Fed chairman told Congress:
"Monetary policy is not a panacea. It would be much better to have a broad-based policy effort addressing a whole variety of issues. I leave the details to Congress, who have considered many of these issues. I'd feel much more comfortable if Congress would take some of this burden from us and address these issues."
Bernanke, of course, has to maintain a level composure, and isn't in a position to start barking orders on Capitol Hill, but this is about as close as a Fed chairman can get to telling Congress, "For the love of God, do something."
When Bernanke talks about Congress relieving the burden and working in concert with the Fed on a "broad-based policy effort," he's not talking about cutting spending -- which as he'd already testified takes capital out of the economy and slows growth. Rather, the Fed chairman wants lawmakers to approve new investments that, like the 2009 stimulus, would generate demand.
Bernanke, in other words, wants what congressional Republicans refuse to consider. Indeed, it's worth pausing to appreciate the fact that Bernanke, despite being a Republican first appointed by George W. Bush, has been increasingly audacious on this front, telling GOP lawmakers what they don't want to hear.
Here, for example, was Bernanke talking to Congress in November.
"With respect to the current economy we are currently continuing our accommodative monetary policy. We are trying to do our best to support economic growth and job creation. It would be helpful if we could get assistance from some other parts of the government to work with us to help create more jobs." [emphasis added]
In October, the Fed chairman urged Congress to focus on job creation, embracing government spending policies that "support growth." In September, Bernanke pleaded with Republicans not to cut spending in ways that that would hurt economic growth
In August, Bernanke not-so-subtly urged Congress to adopt a short-term stimulus to give the economy a boost. In July, the Fed chairman told Congress that "sharp and excessive cuts in the very short term would be potentially damaging to that recovery."
And yesterday, in a not-so-subtle appeal, Bernanke asked Congress yesterday to share "some of this burden" of economic policymaking.
Republicans, of course, not only choose to ignore Bernanke's advice, they've come to perceive his suggestions in the same light as advice from the CBO, economists, the financial industry, the bond market, business leaders, and economic textbooks -- pesky reality that stands in conflict with far-right ideology, and must therefore be rejected.
Maybe GOP policymakers don't understand economics; maybe they don't want the economy to improve before President Obama's re-election campaign. Either way, there are two basic approaches to Washington efforts to improve the economy -- fiscal stimulus and monetary policy -- and congressional Republicans are fiercely opposed to both.
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"Centrists" like Alan Simpson and Republican partisans are all "missing the real point of the American economy. Spending cuts in any fashion are destructive and harmful. If we were to follow the blueprint of the GOP or the ridiculous "Simpson-Bowles" austerity plan, America would end up as as off as Europe, with massive debts and anti-growth policies leading to another recession. The working-class Americans currently struggling do not need a lecture on debt or deficits. They need good-paying jobs and a helping ha d from this government. http://www.sunstateactivist.org
I believe that is the GOPTP's goal (to wind up in the same sitch as Europe) and they are doing a bang up job convincing gullible americans that "debt" is what is hurting us. Oh, except for the military of course. When that works, they can then blame Obama for the mess, since he didn't pull us out of the canyon W drove us into yet. It is really sad that so many buy into it.
If BO is reelected, then without worrying about another reelection, he will approve the Keystone Pipeline and lead on negotiating Simpson-Bowles. If we don't take this action, Greece, Spain and Italy is our future.
Short term stimulus - long term deficit reduction.
Spending is easy - paying off the credit card bill later is hard.
The direction we were going - even before the 2001 and 2003 tax cuts, unfunded wars and Medicare Part D - makes doing the short term stimulus look irresponsible. If you don't think the first stimulus worked, it looks even more irresponsible. Plus in the past when spending was maintained or increased to get out of recession, the deficit reduction later just did not happen.
BUT - It is clear to me that we have to find the courage to do what is needed now, coupled with the commitment to make the long term changes.
Sounds reasonable doesn't it? Yeah - I know - Fantasy Land in today's climate of division.
*sigh*
I agree that we should have been paying down the deficit when times were good (just before the crash - but Cheney assured us that it didn't matter, right?), but to worry about the debt before worrying about re-building up the middle class (whose revenue would most certainly help with that) is even more short sighted. It is like trying to pay off credit card debt after you lost your job. It will leave you homeless and hungry, then you won't be a very good candidate for a job, and will not get hired and so on. It is a race to the bottom.
I just had a thought - you know the kind when it pops in your head you say "Holy !@#$ that can't be right!!!"
Remember yesterdays' post "Sink or Swim" that NC officials along the coast could ignore scientific models showing rising sea levels? Everybody was blasting NC for being stupid. I had a different take - they are basically bowing to pressure by property owners of land and buildings that would be affected to just "Shh - be quiet! - until I can unload and get my $$$ out before you blow the lid off and values plummet".
What if the Republican puppet-masters [I try not to be snarky but - there it is] are convinced that our economy is essentially doomed and are concerned that they might go down with it.
Wow - somebody please talk me out of this or as Rachel says "talk me down!"
What if we - the United States of America - are being
vulture venturevulture capital-ized?!?!The "investors" {the wealthy and powerful} are intent on extracting out their assets (off-shore banking etc) and then getting as much more as possible (tax breaks for the wealthy) before leaving the empty husk of the company (the US) to fail.
THAT is why Romney is so popular with the wealthy and powerful! He was very successful doing on a small scale (one business at a time) what they want (only rational economical - for them - option) to do to the whole country.
OK - where does this logic go wrong?
So if he's elected, he can finish the promise of "fundamental change of America" and take the wrap for it?
Sorry-had to do it ;>
stknmov
THAT DIDN'T HELP!!!
Do you think I might be on to something?
@Maphi,
You're going wrong by violating Napoleon's maxim that you should never attribute to malice what is explained by incompetence.
If history teaches one thing, it is that in every age and every nation throughout history, the rich are, and always have been, like domestic turkeys: they will gorge themselves to death if the farmer lets them because, however intelligent they may be individually, collectively, they're simply too stupid to conceive of any level of enlightened, long-term self interest that exceeds "*chomp*gulp*smack*'MORE!'" Doesn't matter if it kills them outright. Doesn't matter if it starves the farmer who feeds them so they end up starving in turn. Doesn't matter if they render themselves incapable of running from predators. It's all about "*chomp*gulp*smack*'MORE!'" all the time.
The problem is that, unlike turkeys, the rich often manage to get control of the farmers.
@Steve
Ummm---
Not sure that helped.
Which is worse malice or incompetence?
Following your analogy, I think the rich have control of the farmers.
In the book "Blur: How to Know What's True in the Age of Information Overload" Bill Kovach and Tom Rosenstiel there is a section in Chapter 7 called "The Fallacy of the Evil Man" - "It refers to the idea that when you are trying to understand a situation in public life, the likelihood that people did something because they are basically bad, or have vicious motives - because, in effect, they are evil - is almost always wrong and is even more suspicious when it is used to describe a large group."
It's so easy to do - just look at the vitriol and ridicule launched at the Republicans from posters on this site and the other way around on the Fox News site.
But - just because you are paranoid does not mean they are really NOT out to get you.
"For the love of God, do something!"
But Congress, and specifically the House, has done something - They've done nothing. The absence of doing something might not seem like much, but doing nothing is hard work, if you're going to keep the evil forces of Kenya - Keyes at bay. The economy is slowly improving, but had Congress actually acted, the situation might be much much worse. Widespread certainty could reign unchecked, optimism coloring our vision.
But don't worry - The GOP has a plan to bring complete paralysis to Washington, a stimulus of nothingness, and with it, the economic prosperity that we all have been waiting for.
WELL SAID.
totaly agree with largenose
"...and congressional Republicans are fiercely opposed to both." Well, for now they are that is until they return to the White House whereby they'll flip-flop back (as Bush did) to take any credit for improvments in the economy - but on their watch - in hopes to secure their political future. They're certainly not going to do anything on Obama's watch to give him even a sliver of credit that could weaken their electoral chances. That is the new Republican way, "Our way or the highway". Period.
A correction...
...telling GOP lawmakers what they
don't wantrefuse to hear.The problem is the disconnect with the average American voter due to the propaganda given to them by the media (if they even are paying attention). While there used to be honesty and integrity in news, now it is just as partisan as our halls of Congress. It is a fast food culture, where everyone wants to know the answers to a difficult question in a sound bite so they can move on worrying about the important things - like who Kim Kardashian is sleeping with, or who is moving on in American Idol.
Apathy and a lack of engagement is what the GOP feeds off, and they know that they can control the message since there is no referee out there calling foul to all of their blatant lies.
A lot of Americans have been told by legislators to close their eyes and not worry about what they are doing. They have relied on the fact that people hate politicians so the GOP uses this in their favor by passing or not passing laws which in turn hurt The American People. They do this with the premise that we are not watching them, Guess what we are watching them. We have been watching them ever since they took our pensions, our homes, our children, our life savings. There is still a dream out there, but, it no longer just includes America it includes the entire World. This world would cease to exist if it wasn't for us Dreamers. I am disappointed with the GOP and their behavior, but, I will never be disappointed with the Spirit in which the oppressed rise up and continue to survive even if it means picking their food out of a garbage can.
I think what the Banks and Wall St. are going to realize pretty soon here is the Gravy Train is no longer up and running. There is no more gravy, not where they're looking. There is no more turnip juice left, none to squeeze. Their ungreatfulness, that they have exhibited towards The American People, has caught up with them, it is biting them in the ...when you put your customers last .....you eventually lose. Fuzzy math has convinced them that 1 is greater than 99. They also seem to think it is legal to change voting procedures the same year a National Election is taking place. So, if they have gotten away with breaking the law what's to stop them from tampering with the voting process. They think they can win by cheating, in the end they will lose.
Whether GOP resistance to actually do anything except bloviate in front of the cameras is because they're ignorant of economics or because they're trying to make this President a 1 term President, or for a failed ideology, or even their "pledge to Grover" - the bottom line is they are committing treason against the American people, period! This is why they and their DINO's need to be voted out! They are abdicating their jobs so they should be removed by the voters!
The sheeple need to wake up and pay attention to reality, instead of the false nonsense being spewed forth by the GOP! Is it time for the pitchforks and torches yet?
"I'd feel much more comfortable if Congress would take some of this burden from us and address these issues."
Did Bernanke say raise spending? No. Did Bernanke say cut spending? No. You can paraphrase it as "For the love of God, do something.", but you can't say he called for bigger deficits. In fact I found this piece opining that Bernanke wants deficit reduction. Putting words in Bernanke's mouth is not trust inspiring.
http://online.wsj.com/article/SB10001424052748704575304575296443551099612.html
I agree, and who better to help us with the deficit then those, who let's say, spend 125 million on an unfaithful man who associates with sharks. They should stop wasting their money investing in States that have no money. They should instead make a donation towards the deficit reduction. Go ahead and ask them, we'll wait, we've been waiting for them to pay back the money they still owe the American People for bailing them out. We're still waiting for them to make retribution for the President they paid for the last time out, Bush.
From the article you provided the link for:
"Advancing a theme he has emphasized in the last few months, Mr. Bernanke said that if Congress pursued more fiscal stimulus to sustain the recovery, it should be accompanied by a concrete plan to bring the deficit back into line in the long run. Without a fiscal "exit strategy," he said, the U.S. could, "in the worst case," see financial instability like in Greece."
I read this as calling for short term stimulus (increased government spending) - long term deficit reduction.
So you are correct - Bernanke wants deficit reduction. Do the planning now - do the fiscal stimulus now - implement the deficit reduction later when the economy can handle it.
The difficulty of course would be in deciding exactly when that point would be reached. Careful analysis would be needed.
BTW - I am not clear what he means when he says "exit strategy". From what - our current crisis? or ...? Need clarification
It's no secret that Republicans are sabotaging the economy in their cynical attempt to regain the White House. Democrats know it. Republicans know it. Much of the public knows it. And the bulk of the MSM knows it, but they won't report it because they might come off as looking biased. So instead we all watch them play the charade.
I don't know what they think the big prize is going to be if they win the White house? Ann might enjoy decorating. She'll probably request that they burn it down and build a new one. One with a helicopter garage attached for a speedy exit. I want it painted black. They'll probably do better winning a prize in a cracker jack box. Do they actually think that we have any money?
AJA would cost $450,000,0000,000 to create 1,500,000 jobs. Ed, would it be easier to hand out $3,000,000 directly to every one of those new employees and cut out the middle-men?
The Chinese are spending billions on ... (wait for it) ... affordable housing ... to ... (wait for it) ... STIMULATE their economy! Yes! The Chinese! I ask you: do they know something our Congress doesn't know? Like, spending to build places for people to live THAT THEY CAN AFFORD can (wait for it) ... CREATE JOBS? What a novel concept, huh?
The housing that they are building is not affordable. There is rampant runaway real estate speculation similar to our Miami and Las Vegas real estate markets in the early 2000's. The average worker (wait for it) can not afford these new homes. It's only the moneyed elite who speculating in this market. That was the reason their central bank started tapping the brakes through raising bank capital reserves and interest rates years ago.
Now that the rest of the world is in recession, China started cutting rates yesterday. No, the life of the majority of Chinese citizens is much more difficult than our average citizen who would gladly switch places with us.
What people fail to realize, or admit is how organized the right wing actually is, how each member of the Republican party is forced to walk in step and not deviate... They know they can't run on their record. The policies under Bush turned out so horendously wrong... But they also know they can block any recovery and hold the economy hostage long enough that they can blame this economy on the current administration.
All the problems we're facing right now are a result of 8 years of the Bush/ Cheney economic policies coupled with the blocking any real reforms or any legislation that might ease the current economic climate.
Rod - Thats why the Tea Party rose in rebuke to not only the hard left swing of Pelosi's legislative agenda, but to its own free-spending republican party. Thats why Boehner has to adhere to the freshmen republicans. They are the ones who have finally instituted fiscal conservatism back into the Republican party.
Agreed that Bush/Cheney spent money like drunken sailors. The entire country doesn't want to repeat this, particularly the Tea Party. Run away entitlement spending and reform is going to be difficult to do and takes time to work - more than 4 years to realize the entitlement dividend in europe and here in the colonies. However Wisconsin is the vanguard of many states which are cutting back their run away spending - NJ, NY, OH, IN and CA in Nov. after the electorate vote down Brown's sales and income tax increases.
I can not agree w/ you that Bernakke has been telling the American Taliban the truth. One he was on the Fed throughout the period the FED simply had a policy of nonfeasance towards the financial institutions. Two, he has never clearly said that the problem w/ the current Great Recession is that the recession was caused by a financial collapse from over extension of credit. Credit contractions are more painful than the post Depression contractions because to much credit over expands not just the monetary base but the production base as well creating to much of everything to be supported by a "normalized" economy. Three, no matter what the Paul family would desire the FED's independence is not threatened by speaking more clearly. As the boy w/ his finger in the dike he can see the cracks more clearly. When the dike breaks he will drwon like everyone else.
Yep, kaneblues, it's all in the book DO NOT ASK WHAT GOOD WE DO. All this was planned on the very day Obama was inaugurated--obstruct, deny, block, do everything to make the black man look bad.
And, of course, Mitch McConnell's final comment: "Our MAIN priority is to make Obama a one term president". At least he was honest. The American people, the economy, everything else can go to hell. Getting rid of Obama is and has been the goal from the beginning--actually, since before the beginning since Obama hadn't walked into the WH yet..