Associated Press
The most important speech in America this week wasn't heard in Tampa; it was delivered in Jackson Hole, Wyoming.
The Federal Reserve chairman, Ben S. Bernanke, delivered on Friday a detailed and forceful argument for new steps to stimulate the economy, reinforcing earlier indications that the Fed is on the verge of action.
Mr. Bernanke said that the Fed's policies over the last several years have provided significant benefits, but that a clear need remained for the Fed to do more and that, in his judgment, the likely benefits of such actions outweighed the potential costs.
"It is important to achieve further progress, particularly in the labor market," Mr. Bernanke said in his prepared remarks. "Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."
This wasn't an announcement, per se, but it renews speculation about likely action when the Federal Open Market Committee (FOMC) meets in two weeks.
As for the political circumstances, Bernanke, a Republican first appointed to the fed by George W. Bush, continued his long pattern of blaming Republican austerity measures, at least in part, for the weak recovery: "[F]iscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth."
In a not-so-subtle appeal, the Fed chairman added, "Monetary policy cannot achieve by itself what a broader and more balanced set of economic policies might achieve."
Or to translate this into English, "For the love of God, Congress, please do something to help the economy. Spending cuts are holding us back, so do the opposite."
The Republican convention just wrapped up, and we heard three straight days of various GOP voices blaming the fragile economic recovery on President Obama. For those who believe this nonsense, it's probably too late to persuade them otherwise, but Bernanke's speech reminds us that it's Republican austerity measures that are undermining economic growth and Republican lawmakers' refusal to consider public investments that have placed all of the pressure on a reluctant Fed.
We may soon see one of the more ironic political developments in recent memory -- voters may replace President Obama because of a struggling economy, rewarding the party responsible for the anemic growth, and punishing the party with the credible solution.
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From Romney's speech last night:
Right!!- that is the way it is supposed to be!!
Mitch McConnell: Top Priority, Make Obama a One Term President
Robert Draper Book: GOP's Anti-Obama Campaign Started Night Of Inauguration
Another quote from Romney's speech:
That is exactly what they wanted to be able to say!!!!
He could just be honest "I can put money in the hands of bankers, but they are playing monopoly with it, not investing, or getting it into the hands of consumers."
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"We need to get money into the hands of consumers and I am pushing a string- maybe government can give people some money."
Mr. Bernanke. We need jobs with fair wages. But we are expensive labor and we are unable to compete with offshore workers and machines who are making us irrelevant to US business interests.
Simply having government get money in our pockets is a stopgap. The system has been broken since the 70s. None of the wealth from GDP growth is going to the middle class. Our income is going down, and will continue to go down.
The deficit and the disagreement about spending priorities, or fed's monetary policy is really a side issue- a band aid compared to the core challenge facing the US consumer economy. The purchasing power of the US consumer is being starved, and that is happening due to the invisible hand pushing US labor costs ever lower.
@John Re: #2
What is the invisible hand and how do we get it to STOP?!?!?!?!?!
I have no idea why my re-edit got posted below, but whatever.
Those would be the invisible hands not of Adam Smith, but those made invisible by the Ring of Gyges. If we weren't looking, would all players be honest and moral? Smith's assumption was that people would have a heart.
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There's no money in that proposition, as Ebeneezer pointed out to everyone.
maphi
The invisible hand: http://en.wikipedia.org/wiki/Invisible_hand
What Adam Smith never took into account is that the markets can be manipulated by the greed of a few. That's why his and neo-classical theories don't work.
"The invisible hand" now stands for those who are the "manipulators' and we won't be able to stop it unless:
#1. We get rid of Citizen's United, either by a new amendment to the Constitution or by packing the Supreme Court.
#2. We break up businesses that are "too big to fail"!
#3. We modify the tax codes so that "usury" and excess profits are taxed at progressively higher rates.
#4 Companies that put money into research and development are given tax credits.
#5. Companies that "invest" in foreign nations are taxed at higher rates than those companies that invest in the United States.
#6. Tariffs are place on foreign products that are made in "sweat shops" and with "child labor" so that our businesses can compete with those countries that use unfair labor practices.
#7. The Government invests in technology so that new hi-tech jobs will be available for those "low technology" jobs that are being increasingly lost due to automation.
#8. Everyone in this country starts thinking about "We the People" instead of just ourselves, because if your neighbors are doing well, chances are you will do well also. Adam Smith was wrong when he said that pure self-interest benefits society.
John,
Aha! Since I am not steeped in the classics, this was a new term to me. Ring of Gyges, I will have to remember that one!!! Does make sense that it is the "invisible hand"!
@John and @once
So the invisible hand is not the "fickle finger of fate"?
Thank you for some interesting information.
How to get good paying jobs back for our workers is the most critical problem we face in this country.
One question: How do you pronounce "Gyges" without sounding like my cat coughing up a furball?
maphi,
Oh, I haven't heard that term in a LONG time!! It so reminds me of Rowan and Martin!!
Here's a link for Gyges: http://www.howjsay.com/index.php?word=gyges
Onceler, regarding the ring-
Fundamentally, the profit motive is amoral. This skeptic's criticism of Socrates' moral proposition is the same today. You get Bain capital investor Edward Conard making the pitch on Up with Chris Hayes (link) that the self interested player is inhibited from rabid immorality by natural forces- They will not sacrifice their reputation.
It's horse manure of course. Moody's senior credit officer Richard Michalek pointed out the phrase everyone uttered to in response to reluctance to participate in fraud or inhibitions about being seen. "Ill be gone, You'll be gone." (eg, this Nation article) When you cash out with several million, if not tens of millions, that can be compelling. But even if it is a mere 100K bonus, and your career goes on in some new company, then you are effectively invisible.
It's a moral proposition. Our system of meritocracy has a metric calibrated to profit returns, not virtue. That is why we have elites who rely on technical solutions that are divorced from moral responsibility of individual players.
That is why we get 4 phone calls a week for political fund raising from telemarketers who a few months ago were doing cold calls to sell cosmetics.
Obama gives himself a pass, that it is silly season and that this is the nature of the game, post citizen's united.
No sir. At some point the people sitting at the table with the Moodies credit officer has to say, this is wrong. It may be suicide if I refuse to play, but I am no longer the moral person I say I am if I participate.
Physical or existential suicide. Take your pick.
----
Maphi, regarding the fickled finger. It can can fickle even more people if it is wearing "Precious". Then it can be fingering everyone, and fingering no one. Everyone gets off, because everyone is invisible.
Re: #2.6
Verrrrry interesting - but also...............
fill in the blank.
What is a Bippy?
That show was great - satire can be very effective.
Stephen Colbert is terrific!
Re: #2.7
I remember listening to Edward Conrad and wondering what fantasy world he lives in!
We can't depend on people doing the right - moral - thing. We have to put effective regulations in place and enforce them!!!
It shouldn't be a choice between "Physical or existential suicide."
Re: #2.6 edited - still sounds like my cat.....
Re: #2.7
Regarding fickle finger:
*squint eye-roll eyebrow-pucker*
Must be time to feed the cat. :)
John,
I totally agree with you!!
Now tell me how you convince humans to consider the morality of their daily decisions (and I am NOT talking about the "false morality" fed to them by their religion)?
maphi,
I don't know what a bippy is, but I know it is "sweet" and you can put things into it!!
Onceler-
They must be convinced that their existence depends on it. If they step outside of the code whatever it is that they have established for themselves, then they are no longer the person they claimed to be. That person perhaps never existed except in the fairy tales they told about themselves. The fact is, this "existence" has very little significance for most people- they hardly give it a thought.
It is such a shame that the media are on such a rampage to utterly destroy the philosophical sense of the term "existential", giving people a false sense of understanding of an already overlooked set of concepts.
Republican policies have failed the country. Americans need jobs. Americans want jobs. The country will never recover unless we have real, good-paying, American jobs. Americans do not want, nor need, a lecture from the corporate Tea Party elite on how the middle-class aren't paying enough taxes, the rich need to pay less, jobs are only for the privileged, we're spending too much, and we all have to deal with growth-killing austerity. Obama can win back the country if he simply provides a solid jobs-based recovery. - pp
Obama signed the NDAA, you can now be detained indefinately.
Obama snuffed out the Keystone pipeline.
Obama hasn't passes one budget.
Obama still hasn't closed Gitmo.
Obama has done nothing for LGBT.
Obama makes secret promises to the Russians.
Obama says that you didn't build your small business.
Obamas rule has increased Americans on food stamps by 35%.
Obama has only seen UE decline because people are on so long they are no longer counted.
Obama's rule saw 9.5% increase in poor citizens (39.8M to 43.6M)
Obama terminated NASA.
Obama's appointed over 45 new Czars (what is this Russia or the middle east?)
Obama's sealed his medical, education and travel records.
Obama has never saluted the American Flag.
Obama allowed us to pay for 17 of his vacations.
Obama spends over 100k per year on dog training (at our expense).
Hope and change? Vote Mitt if you want, but the real man to get the job done is Ron Paul.
If you are just going to vote for Obama because you like him better than Mitt, please please read about Ron Paul. He will straighten us out, get back on the path to economic growth, and strengthen the dollar.
Re: #3.1
That is a long list and much of it is pure SPIT WAD!!!!!!!!!!!
@TheActivist, hasn't the House been sitting on Obama's Jobs Act for months and months? I read that somewhere, don't know if it's true.
Go get him, maphi!!! Where are these trolls coming from? I check their names and, go figure, they've just signed up just to troll us!! Makes me wonder how many different gmail, hotmail, or yahoo acounts these people have!!!! They all say the exact same things!!! Wonder how much they get paid per post!
He could just be honest "I can put money in the hands of bankers, but they are playing monopoly with it, not investing. There is two trillion of money sitting in corporate bank accounts but no one will invest. Consumers will push money into the system, but I can't get money to them. You can.."
.
"We need to get money into the hands of consumers and from where I sit, I am pushing a string- maybe government can give people some cash.
Mr. Bernanke. We need jobs with fair wages. But we are expensive labor and we are unable to compete with offshore workers and machines who are making us irrelevant to US business interests.
Simply having government get money in our pockets is a stopgap. The system has been broken since the 70s. None of the wealth from GDP growth is going to the middle class. Our income is going down, and will continue to go down.
The deficit and the disagreement about spending priorities, or fed's monetary policy is really a side issue- a band aid compared to the core challenge facing the US consumer economy. The purchasing power of the US consumer is being starved, and that is happening due to the invisible hand pushing US labor costs ever lower.
.
Intervention my eye. This is what our finest minds can do on this problem? They aren't even addressing the core issue. They just think that if you reignite the consumer cycle, that everything will be hunkey dorey. Well it may get restarted, but it will flicker out again due to the cockamamie thinking that is going into the contradictory propositions that:
This isn't even econ 101. Those US workers and US consumers are the same people. You want to do a real intervention? Square those too competing propositions. AND try and do it without getting labelled a proponent of industrial policy.
Sorry- some glitch in the software reposted my final edit as a new one. The version above is the one I intended.
Silly computers...it's amazing they work as well as they do!!
From our post:
Does it make sense to add this one?:
The WalMart "Je m'accuse!"
That is the lead in point that classical economists will make. To be sure, it is a cycle, and you can point out that every player is demanding maximum input of cash and minimum outlay. I frame it in terms of the manipulation by those who have been the economic winners in this game. GDP has increased handsomely since the 1970s. A fair system would see corporate wealth and middle class wealth soar by similar percentages.
It has not.
So it is fair to frame it as I have, with corporations the unfair players who are unwilling to equitably distribute the gains in GDP growth. As I point out, their activity is self defeating. Eventually as goes the neoliberal justification for this madness, the Chinese and Indian consumers are lifted up and there is a global consumer economy that dwarfes the current one.
It simply defers the problem, because on that glorious day when US and international wages are similar, there will be no cheaper goods any more at WalMart. Everyone realizes as in 1970 they aren't getting paid enough, so they ask for more, and businesses say screw it and put in more machines that don't need medical care or pensions, and pay for themselves in two years.
The rest is gravy.
Re: #4.3
"...corporations the unfair players who are unwilling to equitably distribute the gains in GDP growth. As I point out, their activity is self defeating."
Correct.
And this is exactly why corporations and the wealthy people who profit the most from them should NOT be in charge of the government - which is the direction we are going - or where we are.
It is also where we have been- and were we constantly return due to inattention. I mean Romney is just so perfect with the dressage horses- it was the past time of the Ancien Regime.
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Romney and the aristocrats who seem oblivious about the lack of cake amongst the unwashed. Who seem to live in a fantasy world of fabrications, defying gravity- the brave captain of industry soaring.... You just have to look at some of these absurd dressage paintings to get what I am alluding to: EG "Die Cabriole" (jump).
Actually out of respect to Romney's draft dodging years in France, we should adopt french ballet terminology for his moves. After a particularly grand and transparent lie... The pundits can call it out like sports commentators- Observe, Romney executes another "Grand Jette!"... "That's right Rachel, and there's no visible means of support for the proposition. A real master at defying gravity... How he soars tonight!"
And how about them there pirouettes?
BTW, other missionaries risk their lives, and often give them, in some of the most dangerous war-torn and poor regions in the world. Just sayin'.
I have respect for the true Mother Teresas. Those are unfortunately not even the majority of most missions. The goal of mission trips of Mormons has more to do with creating a formative experience in the young initiate than the overt purpose of the trip. It is more a right of passage.
Unfortunately, true Christian missions to aid the poor are for the most part distant from the thinking of church elders. In my experience a "mission" is a euphemism for junket- and if it is not a thinly disguised holiday, the purpose is proselytizing. Better to not send the "missionaries", and take the money spent on airfare and "supplies" and give it to aid agencies to distribute for services to the poor. Those agencies (church and secular) are the folks doing real work on the ground.
You mean the exact same way they did in the 2010 mid-terms? Don't act so surprised, Steve. And it isn't irony; it's stupidity.
You people need to wake up and stop pointing the finger, we are all responsible. We all vote for Bush, twice in fact, we all wanted the tax cuts, we all wanted to wage war on terror.
Get a life people, we all are responsible for this mess we are in today, over promising healthcare, medicare, social security, pensions, etc. We collectively spend too much damn money.
WAKE UP. RON PAUL 2012
Re: #5.1
We did not ALL vote for Bush!!
We did not ALL want the tax cuts!!
We sure as H**L didn't ALL want to wage the war on terror the way it was!!
I could never vote Republican because they don't care about anyone or anything but their own self-interests. For them it isn't 'We the people' but 'ME the people.'
Ron Paul is an even worse choice than Romney, if such a thing is possible.
And no, I never voted for Bush. Not for either of them. Never. Nor did I want to "wage war on terror," which is not what we ended up doing anyway; certainly not in Iraq. If I have to agree with these statements of yours in order to "wake up," I would much, much rather stay "asleep."
Here is Paul Krugman's evaluation of the Fed summit.
As usual Krugman has it right.
I wish someone would give a narrative at the DNC next week about Obama's struggles for 3 1/2 years with the GOP fighting against him all the way--so he wouldn't get reelected--instead of working for the good of the country. The speaker could even show the video segments to prove it such as McConnell's vow to crush Obama. What the Republicans have done is immoral and they need to be called on it for the sake of our President and WE the people!
Rachel, is this going to happen?
Re: #7
This would need to be done very carefully - otherwise it would be just playing into the Republican narrative that President Obama always blames others.
Maybe presented as pure satire poking fun? Sometimes satire works best - like Stephen Colbert.
If there were videos I don't think it would look like Obama is blaming others because people would see the facts.
How about have an Independent give the presentation, maybe a top Economist?