It’s one thing for Bernie Sanders, who is an independent in more ways than one, to put a hold on Bernanke’s confirmation (a threat to filibuster, which if executed, will at a minimum will mess up the Senate’s calendar for a few days) and quite another from someone across the aisle, and a member of the Banking Committee to boot, to place a hold of his own.
From FireDogLake:
As Ben Bernanke’s confirmation hearing begins in the Senate Banking Committee, a source tells FDL News that one Senate staffer and an outside source confirmed to him that at least one Republican on the committee will also place a hold on the Federal Reserve chairman, throwing the process into potential turmoil and giving Chris Dodd a difficult series of choices to make.
Dodd, who just announced his intention to vote for Bernanke’s confirmation in the Banking Committee and on the floor of the Senate, would be in charge of the decision to honor or ignore that hold. The fact that Dodd tried to place a hold on the FISA Amendments Act in 2007-08, and was generally ignored by Harry Reid, just adds a layer of irony to the process.
The source, speaking on condition of anonymity because of his work behind the scenes on the Bernanke confirmation, told me that two separate sources assured him that the Republican hold would be made public after today’s hearing. One staffer said that two Republicans would place the hold, while the other said it would just be one. The source said that the trans-partisan nature of opposition to Bernanke, with a conservative Republican and a socialist independent uniting to block the appointment, shows the intensity of the feelings on the issue. “It’s great to see everyone come together – Democrats, Republicans, progressives and libertarians, against this Federal Reserve, which is not federal, and not a reserve, just a group printing money and giving it to their buddies,” the source said.
While most people think that the multiple holds would delay the process, it’s unclear whether or not it would succeed.
Cracks are emerging, needless to say…the fact that anyone is even suggesting that opposition to Bernanke MIGHT succeed is a sea change from the view of the matter a mere week ago.
Update 4:00 PM: It’s Senator Bunning, and he says other Republicans will join him:
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But wait, there’s more. Does it get any more obvious than this?
Will Reid and Dodd opt for transparency, or will they cover for the Fed, and the bankers–like JPMorgan’s Jamie Dimon–who run it? Reid ignored Chris Dodd’s hold on FISA on behalf of the telecoms, and was handsomely rewarded–he’s the #1 recipient in the Senate of telecom money ($37,800 from Telephone Utilities, $73, 450 from Telecom Services & Equipment) for the 2010 cycle.
But that’s a drop in the bucket next to the money he’s received from the finance sector this cycle: $678,460 from Securities & Investment, $284,890 from Misc. Finance, $146,050 from commercial banks, $130,950 from Finance/Credit Companies. That’s $1,240,350 for the 2010 election cycle alone.
Chris Dodd, on the other hand, reports no money from telecom interests this cycle. Zero. But the banks? Well, that’s a different story. We’re talking $3,830,874 from Securities & Investments, $769,244 from Commercial Banks, $424,620 from Misc Finance, and $273,950 from Finance/Credit Companies. Total: a whopping $5,298,688 for 2010.
If Harry Reid and Chris Dodd ignore the bipartisan holds from Bernie Sanders and the Republicans, they are shielding the Fed from having to explain what it has done. And the financial institutions will have spent their money well.
http://fdlaction.firedoglake.com/2009/12/03/will-and-dodd-ignore-bipartisan-hold-on-bernanke-and-shield-the-banks/
From his comments at the hearing, it looks like Dodd is completely bought and paid for.
Despite all the criticism heaped on him about the bailouts and a move by one senator to block Bernanke’s confirmation, it doesn’t appear in doubt at this point.
Sen. Christopher Dodd, chairman of the panel, predicted Bernanke would win confirmation. “Under your leadership, the Fed has taken extraordinary actions to right the economy,” said Dodd. “These efforts played, in my view, a very significant role in arresting the financial crisis.”
http://www.msnbc.msn.com/id/34247116/ns/business-us_business/
Mind numbing purchase of congress critters….they call that fascism, don’t they?
It is only fitting of our great democracy that the R’s who basically caused this mess are now feinting disdain for one of the puppets while the D’s, those great champions for the masses, are defending this puppets grand accomplishments.
This opacity of cognitive dissonance is what brings empires down.
I didn’t know that a hold could be ignored. At least it was an unwritten rule. But the finance money is enough to override the Senate’s traditions?
Interesting development, and maybe a new one.
Here’s Jim Bunning (R-Ky) at the confirmation tearing Bernanke a new asshole:
http://www.msnbc.msn.com/id/21134540/vp/34258918#34258918
As far as condemnations of Bernanke and his performance, it doesn’t get much stronger than this.
Bunning is a moron. Only Imhofe might be a thicker dolt. I understand Yves Smith’s arguments that Bernanke should go – and whether one agrees or disagrees with her, it is difficult to accuse her of having some other agenda. But what’s happening, as we see the “extremes” of the political actors coalesce around issues like Fed Res reform, Medicare, Mammograms, and Finance Reform (not identical to Fed Res reform) is little more than gamesmanship. Those people do not want the same solutions, but they’ll act in concert for tactical reasons alone. Consider this piece from Bloomberg re the connections between Cap-and-trade and Finance reform:
“Carbon Capitalists Warming to Climate Market Using Derivatives”
http://www.bloomberg.com/apps/news?pid=20601170&sid=aXRBOxU5KT5M
It should be no surprise that the future of global warming policies must bear the stamp of their capitalist paternity, but I can already hear it: AGW is just another fraud to let Wall Street bubble. The Imhofes will use that for their ends (kill Cap and Trade) and so too will proponents of direct carbon taxes (those Pigouvian taxes, I believe they’re called.)
It is cheap and tawdry of me to say so, but it is true: We should be careful for what we wish, as our wishes might just come true …
this is all huff and puff… the repugs are playing theatrics in order to play to the populist outrage about all the shenanigans started under THEIR aegis…
… but Helicopter Ben WILL be reconfirmed and the political class / corporate servants will soon return to business as usual…
I agree. Still it was a ray of light in an otherwise kiss-me harder session of friends of financial sector.
At the same time, while Helicopter Ben is a dangrous lunatic and definitly something more sinister then just a moral hazard (note his comments on Social Security), repugs including Bunning in turn are something more sinister that just a systemic problem for the nation. They are a sign that the country is politically and economically reached the stage which in chess called “zugzwang”: no matter what actions will be taken the situation will deteriorate.
And it was grepugs who started labor arbitrage with China simulatnoisly using debt as an opium for the people instead of or more correctly along with religion (deficits does not matter, or in Goldman Sachs we trust ;-).
And none of these distinguished gentlemen dare to address the issue of declining income and resulting insufficient demand due to growing wage arbitrage (which now includes large part of white colar jobs) and which makes the current rate of unemployment by-and-large permanent: there is no economic nessesty to restore eliminated jobs. Most of them were replaced by computers and outsourcing for good.
As well as effect of current huge military spending on the economy as a whole.
To me it looks like the problem is more in the whole system then in people. Like Duke Kropotkin used to say “People are better then institutions”.
Ben would never rise to the top without Reaganomics and related ideological nonsense. The same is true for Easy Al. This ideology is so entrenched that a managed multi-year decline might be the only viable option for the country. In any case gradual decline is much better then abrupt collapse which is more typical for the situations of ideological lock-down.
As much as I hate Chairman Ben I think you guys missed target big time. Ben is just a product of this system, ask his masters to throw him under bus, replace with another slightly different Ben, will not make any difference.
The confirmation became too laughable for me to bear when Senator Schumer ask Ben to protect consumers by reducing ATM fees. Come on, banks and government rob people’saving 2% a year and our dear representative ask for 2 dollars rebate.
The confirmation end in this high note.
LZ,
Schumer has been a tool for banking industry and power elite for a loong time.
They might as well reappoint Bernanke because IT IS THE FEDERAL RESERVE BANK FRANCHISE THAT IS, BY FAR, THE GREATER PROBLEM!
Having said that, I don’t him to be reappointed.
Sen. Bunning and Bernanke (video).
Senator says to Bernanke a “your FED has become the creature of the Jekyll Island”
http://www.msnbc.msn.com/id/21134540/vp/34258918#34258918
Being a citizen is not an adventure, it’s a job!
You have to do it 8 hours a day, 5 days a week. (Hopefully, the government will recognize that and pay the citiznes. Citizens are not slaves.)
Go Citizens!!!
wow Sen. Jim Bunning was in pretty good form, except when he called Bernanke “Mr. Greenspan”. ha hah ha. That was pretty funny.
Chairman Bernanke has to go, for the reasons Senator Bunning expressed.
I’m sure Dr. Bernanke is a good professor of economics. He could best serve America by returning to Princeton and re-assuming that role.
He could usefully devote the remainder of his careeer to researching what went wrong with his macroeconomic analytical framework, and how the institution of the Fed (and central banking in general) could be reformed to better serve the people as a whole — not just banksters and financial looters.
Let us hope the Senators have the collective wisdom to put Dr. Bernanke back where his knowledge can be best employed for the public good.
I wonder who the anonymous republican is?
Bunning is the same idiot that said Ruth Ginsberg was likely do dead within 9 months. thanks a lot Jim bunning. when i heard those hearings it’s really sad. Diaper boy Vitier up there, wonder if he has a call into an escort while grilling Big Ben and then Evan Byah, Mr Pretty Boy. Getting his dad’s seat, trying to be a smooth talker while him and his wife get their pockets lined by insurance cos so they can be “conserva-dems” and oppose any thing that helps americans. Some of these guys just truly look like world class scum, but then again many of them actually ARE that too.
Those are all ad hominem attacks, generally a sign that one lacks a substantive argument on the matter at hand.
Yes, but Bunning’s comments were not? Your FED has become the Creature from Jekyll Island, you’re a moral hazard, etc? In either case, I apologize for the more aggressive tones to the prior comment and will tone it down.
My friend, the entire United States has become a moral hazard — not just the Fed. A bankrupt, war-mongering nation that is about as corrupt as any Latin American or Southern European country you’d care to name.
Vinny
This is more political feel good theater from a totally corrupt, non responsive to the will of the people, gangster government, meant only to appease and comfort the marks. Reread Blurtman’s first comment above with the graft and payola numbers.
And that is the substantive argument on the matter at hand.
Vinny G. has it right.
Don’t apologize for and tone down your anger, pump up the volume!
Deception is the strongest political force on the planet.
Yes, they are Yves Smith – unless they are facts cited to impeach the intellectual capacity of the proponent of some policy. Any idiot who can read, like Bunning apparently can, can read what some smarter more literate staff person has given him (and sometimes, members of Congress only have to read what’s been written by lobbyists, passed to them through their staff – re the Health Insurance vote in the House.) Bunning’s “Jekyl island” pejorative for Bernanke is neither more nor less intellectually shallow than calling Bnning a dolt. I have a pretty boring personal life, I’ve watched this clown on CSPAN at 3 in the morning when I couldn’t sleep mangle the English language and digress into inane conspiracy nonsense during Committee hearings. Shit for brains, stupid is as stupid does, there’s no getting around it. There is nothing to celebrate when principled objectors to Bernanke (if there are any in the Senate at all) have to stand with idiots to make progress. To paraphrase Kievite from above: It portends no good outcomes no matter what else happens…
honestly, i am ashamed to say i never heard of Bunning before today, but I am happy to see a republican second bernie sanders’ “hold” on the confirmation. The Federal Reserve is completely out of control, is way too banker compromised(volcker was really the last populist fed president, as much as one could be), and transparency is needed.
Transparency is needed because it is THE FED, and THE FED ALONE that has had a huge role causing almost all of our government’s and our citizenry’s major problems because of terrible policy. From greenspan’s channeling of credit creation and indebtedness through the GSE’s and the resulting housing bubble, to the lack of regulation, oversight and enforcement which the fed was aware was taking place(I remember on an interivew at Goldman Sachs in 2007, they told me their credit derivatives operations department was only starting to catalog their CDS positions…that is..CDS exposure wasn’t even tracked in any meaningful way even in 2007(even though the fed mandated it be tracked in 2005, they said… nice followup Fed) and now the fed indebting the United States government by monetizing agency paper for foreign central banks(because the GSEs are now bankrupt thanks to greenspan) by printing money in return for those central banks buying up the newly issued treasury paper(which directly violates the fed’s own rules about buying us government debt) leading to a debasement of our currency ,living standards, and probably higher taxes.
The point is, as I believe everyone is aware, that our current situation could have been avoided had the fed took or not took specific actions in the past. The federal reserve changed character after Regan’s election(it was rarely involved in pro active monetary policy, but was largely a defensive organization meant to respond to crisis, and had a strong duty to the population as well[i personally think the fed’s character changed not out of policy changes but because of the tenants of modern economics]’
Congress has a duty to make sure the fed is held accountable and is transparent because they have fucked up majorly in the past..and could fuck up again..which is why we need bloggers like Yves and her critique. I believe we need hard changes made to the fed’s charter and to enact other system-wide alterations regarding the fed’s place in our society. I worry what will happen if Congress doesn’t step up to the plate, and I am frankly surprised they haven’t done so considering the seriousness of everything currently occurring. If they can’t make proper fixes now, when would they really be able to. And they(the administration and congress) really hasn’t made concrete changes yet..just a lot of hooting and hollering.
The bankers would love to see governments go bankrupt and for them to be the power centers of the world. This is not an impossibility today. Starving the beast one crisis at a time….
The FED is a debt kiting scheme that banks on the good will accumulated by previous generations of hard working Americans. We can be certain the FED is shredding as we read.
I watched most of the hearings today at my desk using Fox Live streaming. I am so sad and angry at the lying sacks of sh**t that my senators represent. Not one (except for Mr. Bunning) had the courage to ask Bernanke some tough questions or follow-up with a probing question when Mr. Bernanke lied outright or evaded their questions.
For example when a Senator asked Mr. Bernanke about why he didn’t do enough to prevent the crisis, the chairman claimed that he did not have the powers to be a systemic risk regulator. This is a bald faced lie or a flip flip of enormous proportions.
Any Senator could have been prepared with the following testimony (available on the Internet ahead of time) from Mr. Bernanke during his last testimony in front of this same crowd of Senators during his confirmation hearings 4 yrs ago.
To remind everyone:
Bernanke said at last nomination: “I believe that the tools available to the banking agencies, including the ability to require adequate capital and an effective bank receivership process are sufficient to allow the agencies to minimize the systemic risks associated with large banks. Moreover, the agencies have made clear that no bank is too-big-too-fail, so that bank management, shareholders, and un-insured debt holders understand that they will not escape the consequences of excessive risk-taking. In short, although vigilance is necessary, I believe the systemic risk inherent in the banking system is well-managed and well-controlled.”
So, which is it Mr. Bernanke? Will you resign on your own or do we, the people, have to kick you out?
Sasher
I read last night that Bernie Sanders had put a hold on Bad Ben’s nomination?
Yes, it’s true.
Is Bunning, a drooling, senescent fool, more important?
I am not sure Bunning and Demint understand that they are playing with fire here. If they actually manage to defeat the nomination, they will end up with a Democrat as Fed governor. I am really not sure you want Democrats running price stability. Johnson & Carter sure did a bang-up job with that, letting inflation go nuts.
Jesus those senators are idiots.
Myles SG,
Did you not read the WSJ editorial? They are of the view, which I think is correct, is that Bernanke has such a loose policy bias that a Democrat would not be worse. Crimeny, this is Obama we have in here, with the Clinton crowd that was afraid of the bond market vigilantes.
This is a stereotype that has little to do with facts on the ground.
Yves, you are what Bernanke has done to deal with the economic crisis, with what he is likely to do when exiting the crisis. Whoever gets appointed if Bernanke does not continue will have to deal with steadying the economy when the the recovery is under way.
The rumor going around right now is that Janet Yellen is the likely fall-back. I am guessing that you know more about her than I do, and in light of your previous comment, I am also deducing that you do not prefer Yallen over Bernanke.
So unless you do, in fact, prefer someone Yallen as Fed chief over the incumbent and are willing to state so explicitly, kindly not object to Bernanke on the grounds that he’s been too loose and liberal with monetary policy. He’s been practical, sober, and realistic, and he’s been a good man.
Yves, you are *confusing* what Bernanke has done to deal with the economic crisis, with what he is likely to do when exiting the crisis,
Sorry
Myles,
I suggest you bother reading so we can have a conversation based on facts rather than uninformed prejudices.
Per the Journal, which you did not bother reading, an examination of FOMC minutes in 2002 shows that Ben was the architect of rates that were vastly too low, well out of line with the Fed’s normal rate setting policy, the Taylor rule. In keeping, Bernanke also made a speech in Nov 2002 which is the basis for his “Helicopter Ben” moniker, in which he obsessed about deflation. Bernanke persuaded Greenspan (Greenspan was pretty much acceded to by other FOMC members) to embark on an interest rate policy which was radically too loose by historical standards.
You are just plain wrong on this one.
But this takes us directly to the heart of the matters raised in the piece covering Robert Brenner. The briefer post about him did contain the language: “the bubbles were no accident.” The link to the new introduction to his book contained the larger argument that the bubbles were no accident: The capitalist real economy cannot sustain itself, finance capital becomes the prime economic mover, and finance moves things with bubbles. That analysis was seconded by the Peter Gowan essay linked by a comment poster – “Crisis in the Heartland”, New Left Review 55, Jan-Feb 2009. In fact, Gowan asserts:
“Greenspan-Rubin-Paulson …understood Minsky’s theory of bubbles and blow-outs, but believed that they could use it strategically for blowing bubbles, bursting them, and managing the fall-out by blowing some more.” (page 10)
Gowan makes the statement without citation, so I do wonder HOW he knows WHAT they “understood”, but the idea is intriguing, and it is what ideological hegemony does best: Appropriate the critique and subvert it to the perpetuation of the ruling class hegemony ….
So the problem is: If Brenner and Gowan and all those other people mining Das Kapital Vol 3 for the theoretical frame to explain what’s happened are correct – that blowing bubbles is the only way to keep capital in circulation at this decadent stage of Western Industrial Capitalism, then the only fair objection to Bernanke is that he was, and is, a capitalist tool.
Well, to the barricades then. Bernie might join us, but Bunning will be on the other side, shooting at us … well, telling other people to shoot at us…
I mean this is just ridiculous. Every single vote against Bernanke is an implicit vote for higher inflation.
Whuh? BB is printing dollars and buying Treasuries like crazy in an end-run attempt to unwind a deflationary monster. The only reason his actions haven’t resulted in massive hyperinflation (so far) is because the deflationary spiral is alive and well and devouring money (and debt) faster than anybody can create either.
This is not a time to flame the democrats as “inflaters” when every CB on the planet is QE themselves around the edge of a mighty toilet bowl that’s trying to suck their economies into the sewer of history.
cougar
Myles,
It was Bernanke who pumped the Fed’s balance sheet to its current massive level. I don’t know where you are getting your fantasies from, but per my comment earlier, it was BERNANKE who was the moving force behind a widly loose interest rate policy when we didn’t have a crisis! During the crisis, Ben was also the man who brought us “75 is the new 25”.
There is plenty of evidence that Bernanke has been a profligate liquidity creator when circumstances did not warrant it. And you assert, with NO factual support, that voting against him is a vote for inflation.
This is like Henri of Chambord rejecting the offer of restoration from parliament after the Franco-Prussian war because they wouldn’t adopt his flag. Just cutting off one’s nose to spite the face.
Here! Here! 40 years of good times, come on now just a few bumps in the road eh.
The Fed is just a party house so lets keep the party rolling all night long :http://www.youtube.com/watch?v=8_k64mLyaZw&feature=related
Ben’s just a regularly guy like the rest of us full of faults, but he does mean well: http://www.youtube.com/watch?v=HO8dtaeOqZ4
Skippy…personaly from me too you Ben. I’m here for you, I remember the good times we had: http://www.youtube.com/watch?v=LZ5cMLyUxMo&feature=related
Here’s a link to an excellent story in Huffington’s Post for more details on this:
“Senator To Fed Chair Bernanke: ‘You Are The Definition Of Moral Hazard’
http://www.huffingtonpost.com/2009/12/03/senator-to-fed-chair-bern_n_378673.html
Looking at mr. bunning at opensecrets
http://www.opensecrets.org/politicians/industries.php?cid=N00003437&cycle=2010
The majority of his money comes from the FIRE industries.
The rest of his money comes from a perfect neo-con conglomerate of nonsense.
Be careful about hitching your wagon to this guy. He may turn out to the bagman.
One can hope that since he’s an old man, he is thinking of the future and doing the right thing rather than the source of his money. Sometimes people find a lot of virtue in their final years.
I don’t get the sense anyone is necessarily hitching stars to Bunning. He’s not running for reelection anyway, and in the past came up on the short end of campaign money distribution from his own party.
Pols are pols, so star-hitching doesn’t enter into it. When very rarely these days a politician does something positive on an *issue* of importance to me they’ll get a pat on the head and “more of this please” even if they aren’t my representative. When my own reps screw up (most of the time) I let them know their actions are so deeply disappointing and short-sighted in terms of appropriate policy that I might not see my way to voting for them or contributing ever again. Yes, it’s all something of a game and I don’t kid myself this has much effect, except to the extent that enough other people howl early and often.
As full-disclosure, in over 30 years of regular voting, I’ve voted for exactly 1 Republican and that in a local election, so it’s not like Bunning and I have oodles of common ground. But I’ve thanked both him and Sen. Sanders for their holds on Bernanke and let my own Senators know that too.
OT, first post here but for over a year now NC has become one of a tiny handful of must-read blogs for me. Well done, Yves, et al.
Yep, totally useless – or as useful as Vitter preaching fidelity ..
I don’t know if any of you’ve seen this or not. It is three essays by William K Black on Geithner, and Bernanke. They are just incredibly good. He outdoes himself. http://neweconomicperspectives.blogspot.com/2009/12/geithner-as-our-last-action-hero.html
Also, This article in the Huffington Post. It goes into detail on today’s quote from Bernanke to the Senate Finance Committee where he suggests that the best way forward from here to get the budget back on track is to cut Social Security and Medicare. Just incredible. No suggestion that we rein in the drunken spending going on over at Fannie Mae, of course, or that the Federal Reserve should stop giving multi-billion dollar non-recourse loans to favored wall street banks, oh no. If regular voters became aware of what he had said it would just blow the lid off of the confirmation process. I wish. here’s the link: http://www.huffingtonpost.com/2009/12/03/bernanke-channels-willie_n_378963.html
Criticism like that being leveled by Bunning, Sanders and others is extremely valuable. It serves two purposes:
1) It allows those who oppose the Bernanke/Greenspan mentality–a mentality that never saw a Wall Street bailout it didn’t like but sees great evil in social security and medicare–to start building their case.
2) It flushes out deficit hawks like David Walker, who are forced to circle the wagons around Bernanke, and forces them to show their true colors, such as this CNN video featuring Walker:
http://money.cnn.com/video/news/2009/12/03/n.bernanke.hearing.fed.cnnmoney/
What we see here is a David Walker who jumps all over himself to gush all over Bernanke, a David Walker who sees absolutely nothing wrong with lavishing trillions upon trillions of dollars upon Wall Street to bail it out, but a David Walker who wants to take an axe to social security and medicare.
And I can say something just as outrageous, relative to the number of people whose interests I’d gore: Make SS and Medicare all means tests, take off the caps on SS taxes (no upper limit), and embed Medicare inside a national health insurance plan (or vice versa).
Bernie might help, Bunning will look to his Teabaggers for his cue.
God help us when people like me (I’ve been to jail for my political actions, I shit thee not) have to start rallying for a sense of reality. Your enemies enemies are not your friends.
Dave,
I hear you loud and clear.
It’s kind of like allying oneself with Stalin in order to defeat Hitler, no?
I don’t have a good response.
This fed issue has made for strange bed fellows. Just imagine the coalition of Grayson, Paul and Kucinich on the house side.
Yes and no – there are always those other “qualities” of things used in illustrative analogies. Is Bernanke exterminating Jews, Gypsies, Communists, and gay men and women? No. The link Yves Smith put to Economics of Contempt (http://economicsofcontempt.blogspot.com/2009/12/changing-my-mind-on-bernanke.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+economicsofcontempt+%28Economics+of+Contempt%29&utm_content=Google+Reader) probably best tropes my own sense of things – and I will say I do not concur with the author’s previous defense of those TBTF entities as necessary – unless of course one believes that market makers are necessary.
But she’s in the business, and simply has familiarity with details of matters that I still flounder to grasp – for simple unfamiliarity with the full sense of the lingua franca. She impales Bernanke on one horn or the other: Either he is incompetent, or he is one of the crooks (so in either case, looking out for the wrong people.) Out here in flyover country, I consider a third alternative: He really is an academic, and his only motive is to figure things out, and unfortunately for us, we are the experiment. Not bailing out Lehman was an experiment. There was no model sufficiently robust to predict the consequences of an action except reality itself. Arguendo, people saw bubble this and bubble that, and this connection to that; nobody had the predictive capacity of the sum total of actual consequences – at best, different people had better hunches, and those were grounded in the specifics of their own histories and dealings more than any grasp of modern finance and its relation to real economic forces – or so I suspect. The odd savant is irrelevant – nobody ever listens to them until reality proves them right anyway. (Isn’t this at the core of the break down of the “rational expectations” metaphysics of neo-classical economics? Rational people should have done what? And if so many people are not rational, and there’s a herd, well now what?)
I’m not one much to care for the intricacies of naked shorting some stocks – the issues that draw me here are the ones I found so succinctly put in the Gowan article I mentioned earlier: Still hunting the “proximate” cause, if you will:
“There is thus a rational, dialectical kernel in the superficial distinction between financial superstructure and the ‘real’ us economy. In what follows, I will first sketch the main elements of the New Wall Street System, and
briefly show how its crisis took such spectacular forms. I will then argue that, to understand the deeper roots of the malaise, we do indeed need to probe into the overall socio-economic and socio-political characteristics of American capitalism as it has evolved over the past twenty-five years.”
So like the author of Econ of Contempt, I mostly figure who’s there is mostly irrelevant. Consequently, what then matters is the politics of the game – since, as much as I detest politics, it is the form of the class struggle in bourgeois society. The non-nut jobs ought to be negotiating with Bernanke off camera, getting what they think needs to be done.
My favorite part of Bunning’s takedown of BB was when after calling him “Mr. Greenspan” he caught and corrected himself and apologized for the “fraudian slip.” That apology has to be the best Freudian slip I’ve heard in a very long while.
If Zimbabwe Ben doesn’t get reconfirmed, his successor will be no better, perhaps worse. The first and foremost prerequisite to be appointed Fed chairman is willingness to slavishly serve your political masters. The second prong of the Fed’s dual mandate (full employment) provides all the justification the Fed needs to recklessly blow bubbles ad infinitum. Obama realizes he has little chance of reelection without the wealth effects of rampant asset inflation to plug the hole in the economy that was previously concealed by the housing bubble but is now obvious to all. Ergo, if ZimBen is not recofirmed, whoever takes his place will carry on where he left off, perhaps with even more gusto than ZimBen himself.
Can anyone shed any light on Judd Gregg’s over the top. self-righteous endorsement of Bernanke? I knew he was a supporter, but this was ridiculous. Was he really sincere in his praise, or does he have an agenda?
Hay just a thought, whom ever fills the spot should enter a pre-nup with us little people. That way if they go back on their vows we still make out to some degree.
Skippy…Tiger woods wife can handle the details ok.
Strange bedfellows, but I hope Dunning and Sanders win out. If it takes dismantling the Fed to provide better regulation of our financial industry then so be it.
For those republicans that still think that there should not be financial cops on the financial streets…well I hope they listen to Dunning’s UFC verbal takedown of Bernanki.
If you want Capitalism to work, then it has to be regulated. Like a stallion that can become a great racehorse, you got to break it, before you can ride it.
Bleh Bunning not Dunning. I drank the wrong wine tonight.
Congrats to Yves (and allies) for pushing the populist revolt against Gentle Ben and his allies.
Will Yves get a repeat invite to Treasury?
Kicking off 2010’s mma events is the amazing UFC 108. It’s definitely going to be a great event with the main match being Evans vs Silva going head to head. You can watch ufc 108 online for FREE in full HD without paying that grotty $55.95 PPV cost.