For Bernanke, a Question of Toughness

“Bernanke should be making stronger statements and then backing them up with decisive easing,” said Jan Hatzius, chief domestic economist for Goldman Sachs, who argues that the short-term benchmark interest rate the Fed controls should be cut to 3 percent by year’s end. The rate is now 4.25 percent, already down a full percentage point since mid-September.

“Personally, I think we should be at 3 percent right now,” said James Glassman, a senior economist at JPMorgan Chase. “You ask anyone on Wall Street, ‘If Bernanke cuts to 1 percent or 2 percent or 3 percent, would that fix the problem?’ Most people would tell you that would certainly start the healing.”

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“I think personally that the rate cuts have been just about right,” said John B. Taylor, a Stanford University economist who served as a top Treasury official in the early years of the current Bush administration.

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“People have more debt than they can afford to pay and they gambled on house prices going up forever,” said Joseph E. Stiglitz, a Columbia University economist and a Nobel laureate. “There is no way that Fed policies can undo these harsh realities. Bernanke needs to say to Congress, ‘We have reached the limits of what responsible monetary policy can do.’ ”


Indeed, no matter what the Fed does, it may not be able to prevent a recession. That is one reason a number of experts, including Mr. Stiglitz, are also calling for fiscal stimulus in the form of tax rebates for low-income families, or extended unemployment insurance or other subsidies to help counter the downward pressures on consumer spending.

Edited by milbank, 09 January 2008 - 08:59 PM.

Without pissing Mark off: All of these guy's are clowns. Or worse. Dollar debasers. Inflationists. Globalists. I guess it's not really a recession as long as JPM, GS and co-ops on CPW rally. Let the working man who's paid in depreciating script eat crumbs while the asset holders get inflated out. Viva' Peron. Here's my truth Milbank:Any one who argues for rate cuts is scum. If I were in Congress (and I ran in 2004) I'd bring impeachment charges upon the entire Fed board if they cut one more time. We should treat inflationary policy as treason.

have you ever compared an equity chart to the fed funds chart? why does the fed lower rates? to step in on a faltering economy. and does the stock market usually lead a faltering economy? has the fed lowering rates (from an already low level as we have now) ever do anything than boost the market with a stick save closing? sorry lots of questions, may be rhetorical.. just opening it up for topic... -TA

Without pissing Mark off: All of these guy's are clowns. Or worse. Dollar debasers. Inflationists. Globalists. I guess it's not really a recession as long as JPM, GS and co-ops on CPW rally. Let the working man who's paid in depreciating script eat crumbs while the asset holders get inflated out. Viva' Peron.

Here's my truth Milbank:Any one who argues for rate cuts is scum. If I were in Congress (and I ran in 2004) I'd bring impeachment charges upon the entire Fed board if they cut one more time. We should treat inflationary policy as treason.

Pabst, you ran??? Good for you...at least you stand up and take a shot at what you believe in (sorry don't know exactly what you believe in) but thats substantially admiral. -TA

Without pissing Mark off: All of these guy's are clowns. Or worse. Dollar debasers. Inflationists. Globalists. I guess it's not really a recession as long as JPM, GS and co-ops on CPW rally. Let the working man who's paid in depreciating script eat crumbs while the asset holders get inflated out. Viva' Peron.

Here's my truth Milbank:Any one who argues for rate cuts is scum. If I were in Congress (and I ran in 2004) I'd bring impeachment charges upon the entire Fed board if they cut one more time. We should treat inflationary policy as treason.

I agree. For me The Fed is there to enrich their shareholders...the banks via separating the lower 99% of income makers from their money. The Fed has made capitalism into nothing more than a floating crap game with weighted dice.

I especially like the last line of the Times article I posted....

“It is easier for people on Wall Street,” Mr. Wojnilower said, “to cloak their personal desires in a national concern.”



When I saw that I immediately thought of PIMP CO's Bill Gross during the summer saying that if the Fed didn't lower rates to 3.75% immediately. People would be homeless. He "forgot" to mention how much of that collapsing Mortgage Backed junk his funds owned. A lot!

Pabst, you ran??? Good for you...at least you stand up and take a shot at what you believe in (sorry don't know exactly what you believe in) but thats substantially admiral. -TA

So, let's see.... Hmmmm. You live in Illinois, you like the New York Post...

Pabst! You're Alan Keyes!

Edited by milbank, 09 January 2008 - 10:00 PM.

“You ask anyone on Wall Street, ‘If Bernanke cuts to 1 percent or 2 percent or 3 percent, would that fix the problem?’ Most people would tell you that would certainly start the healing.”