Cross-posted from Credit Writedowns
The Federal Reserve has released its latest statement on the state of the US economy.Its Chairman Ben Bernanke has now spoken to the press as well. The overall assessment was rather downbeat.
(video below)
Monetary Policy’s Impotence
If you compare the Fed statement to its previous one, you will understand the Fed has downgraded the economy’s outlook. And indeed its economic projections shade lower. The Economist’s Greg Ip asked Mr. Bernanke, why the Fed had lowered its medium-term outlook if the impediments to continued growth were temporary as the Fed had indicated in its statement. Here is what Mr. Bernanke said in response:
Part of the slowdown is temporary, and part of it may be longer-lasting. We do believe that growth is going to pick up going into 2012 but at a somewhat slower pace than we had anticipated in April. We don’t have a precise read on why this slower pace of growth is persisting. [S]ome of the headwinds that have been concerning us, like … weakness in the financial sector, problems in the housing sector, balance sheets and deleveraging issues…may be stronger or more persistent than we thought. And I think it’s an appropriate balance to attribute a slowdown partly to the identifiable temporary factors, but to acknowledge a possibility that some of the slowdown is due to factors which are longer-lived and which will be still operative by next year.
Now remember, since the Panic of 2008, the Fed has brought its policy rate down to zero. It has taken on all sorts of lower-quality assets as collateral for loans at effectively zero percent interest. And the Federal Reserve has more than tripled it balance sheet. Just looking at this objectively, it is an extraordinary amount of monetary liquidity. Yet the economy remains weak. What’s going on?
The Balance Sheet Recession
Nomura’s Chief Economist Richard Koo wrote a book last year called “The Holy Grail of Macroeconomics” which introduced the concept of a balance sheet recession, which explains economic behaviour in the United States during the Great Depression and Japan during its Lost Decade. He explains the factor connecting those two episodes was a consistent desire of economic agents (in this case, businesses) to reduce debt even in the face of massive monetary accommodation.
When debt levels are enormous, as they are right now in the United States, an economic downturn becomes existential for a great many forcing people to reduce debt. Recession lowers asset prices (think houses and shares) while the debt used to buy those assets remains. Because the debt levels are so high, suddenly everyone is over-indebted. Many are technically insolvent, their assets now worth less than their debts. And the three D’s come into play: a downturn leads to debt deflation, deleveraging, and ultimately depression. The D-Process is what truly separates depression from recession and why I have said we are living through a depression with a small ‘d’ right now.
Secular inflation will be non-existent
Therefore, the problem is a lack of demand for loans not a lack of supply. The Federal Reserve can print all the money it wants. But, if there is little demand for more indebtedness, it is not going to have the desired effect of permanently reflating the economy – although it can create bubbles.
The corollary of this is that inflation will be non-existent on a secular basis. For the increase in liquidity to feed into consumer price inflation, people have to actually buy more stuff. And that’s not what happens in a balance sheet recession because people are concentrated on reducing debt and increasing savings.
–Weak consumer spending will last for years, Aug 2009
For his part, the father of the Balance Sheet Recession theorem Richard Koo says QE2 drove speculation, but what about the real economy? His view is that monetary policy can aid speculative sentiment with residual feed through into the real economy but that it is largely impotent in a balance sheet recession. Only fiscal policy will have any measurable impact in driving the underlying demand side factors holding the economy back.
I believe Ben Bernanke senses this as well. I have noted this in the past at Credit Writedowns. Mr. Bernanke’s comment that “I’m a little bit more sympathetic to central bankers now than I was 10 years ago” underlines this.
Inflation Targets
It’s interesting to look back to that period, at the Japanese experiment with quantitative easing early in the prior decade after its policy rate fell to zero. At the time, a lot of foreign monetary policy experts were advising the Bank of Japan to do more.
For example, Ben Bernanke, now the Chairman of the Federal Reserve, remarked in a 2003 speech:
As you may know, I have advocated explicit inflation targets, or at least a quantitative definition of price stability, for other leading central banks, including the Federal Reserve. A quantitative inflation target or range has been shown in many countries to be a valuable tool for communication. By clarifying the objectives of the central bank, an explicit inflation target can help to focus and anchor inflation expectations, reduce uncertainty in financial markets, and add structure to the policy framework. For Japan, given the recent history of costly deflation, however, an inflation target may not go far enough. A better strategy for Japanese monetary policy might be a publicly announced, gradually rising price-level target.
What I have in mind is that the Bank of Japan would announce its intention to restore the price level (as measured by some standard index of prices, such as the consumer price index excluding fresh food) to the value it would have reached if, instead of the deflation of the past five years, a moderate inflation of, say, 1 percent per year had occurred.
–Some Thoughts on Monetary Policy in Japan, Remarks by Governor Ben S. Bernanke Before the Japan Society of Monetary Economics, Tokyo, Japan, May 31, 2003
So what was Mr. Bernanke saying there? He was saying that an explicit inflation target would not necessarily be used only to limit consumer price inflation, but rather to target consumer inflation. In a deflationary environment, that would mean the Fed would use unconventional means like quantitative easing or interest-rate caps to create inflation. When the inflation target overshoots, the Fed would use conventional means like open market operations combined with increases the target Fed Funds rate to create disinflation.
Add inflation targets to interest rate caps and municipal bond purchases as policy tools the Fed will consider using in future.
My conclusion from reading Mr. Bernanke’s prior statements and his most recent ones is that he wishes fiscal agents would take the lead. But he has accepted this will not happen because of the political environment. Reluctantly then, he is going to have the Fed assume the stimulative role. Yet, here again, the same political forces which constrain fiscal policy are at work. And that means Bernanke will only resort to unconventional policy when the economy deteriorates significantly.
For my part, I am with Richard Koo. Monetary policy reflation will not work in a balance sheet recession when fiscal policy is contractionary. But at some point, the Fed will be compelled to act anyway.
Source: Serial disappointment, Greg Ip, The Economist
Follow me on twitter @edwardnh
49 comments
Comments are closed.
What can the Fed do?
At this point it would seem that “quantitative easing” (money printing) is the only option left. The types of assets purchased under such a program could also be expanded.
But as we saw with QE2, there would be nasty side effects (rising commodity prices). Hence, yesterday’s move to release Strategic Petroleum Reserves to put additional downward pressure on oil prices (they were already falling). Do not be fooled by the “official explanation”, this is strictly a “greasing of the skids” for further quantitative easing. The Fed needs to see oil prices (WTI) back in the $70-%75/bbl range before they can begin further QE.
And, at that point, Barry’s bosses can do God’s work yet again by going long on the artificial dip and waiting until the masses of free money drive up the price. Better return than recycling Fed money into Treasury debt and, with the government well in hand, just as safe.
Do not be fooled by the “official explanation”,
Actually, I am personally puzzled by the complete lack of official explanation. Releasing oil right now seems like such an incredibly bizarre move, especially with the lack of reports leading up to it, that I am wondering if this is a panic move based on information we commoners are not privy to.
Based on the news stories at the moment, there is really no reason that this action should have been taken. I view it as somewhat ominous.
What can the FED do? How about stop leverage with out collateral and allow Deflation to run its course it called Free Market Capitalism.
This one is for all of our US Chamber of Commerce Centrist and their Black Market Labor ring and would be sublime government Centrist types. The Mountain is the USA
http://youtu.be/qswm7lHp7oY
Some people should stay out of the stock market. Dam Bill Clinton and his removal of Glass- Stegall Act. It forced people out of saving their money in a bank into the stock market in search of a fair interest rate for their money.
Then the banks with their Self Regulation laws brought in leverage and sovereign wealth funds that took control of our Free and Regulated Markets. Regulations that were meant to protect the USA’s economy and it’s Citizens. They were removed BY WHO? (Terrorists) Globalist/Centrist/Fed now they are bailing out the world on the US Tax Dollar. The Welfare state
Money the Root of all Evil. Centrist have become complicit in Treason in the name of the Gambling Losses they incurred in the (401K)stock market. Banks ,AIG etc etc and they seem to be fine with illegal labor to.
Now the Mountain has a up hill Battle but we do it as Genuine Free Legal Citizens of the United States of America No heroes needed just responsible legal Citizens to stand up and be heard. Time and Time again. The Victims have the right to fight back.
Where do you find any indication that the Fed will purchase municipal bonds? Wouldn’t this require some serious mandate fudging? And what mechanism will the Fed use for triage? Every municipality in the country is in critical condition. Can the Fed buy up all their debt and hold it for a sufficient time to let them all get back on their feet? Maybe the banks can get involved and do muni CDOs. I bet that’s it. Ben Bernanke is doing an amazing job of doing what congress should be doing. I really don’t know why we need congress at all. It isn’t a democracy.
David Blanchflower:
“The major questions about quantitative easing aren’t so much if, but how much will the Fed buy and of what type? There is little point in moving slowly. So $100 billion a month for six months seems a reasonable amount.
What will they buy? They are limited to only federally insured paper, which includes Treasuries and mortgage-backed securities insured by Fannie Mae and Freddie Mac. But they are also allowed to buy short-term municipal bonds, and given the difficulties faced by state and local governments, this may well be the route they choose, at least for some of the quantitative easing. Even if the Fed wanted to, it couldn’t buy other securities, such as corporate bonds, as it would require Congress’s approval, which won’t happen anytime soon.”
http://www.bloomberg.com/news/2010-10-18/quantitative-easing-is-only-show-in-town-commentary-by-david-blanchflower.html
Wouldn’t really be too difficult to nationalize the Federal Reserve system. Start paying interest to ourselves. The only fly in the ointment is fraud-denial by the Fed and the TBTFs. And all the raving maniac right wing commie haters. But if we de-facto nationalize the crime (as we are doing now) we will not have accomplished much. Every citizen needs restitution from this unmitigated mess. If Schneiderman and Biden come up with an out for TBTFs, however convoluted and distasteful to the rest of us, it will open the door to whitewashing the securitization fraud and shut the door to honest nationalization of the solvent banks.
“Not too difficult to nationalize FED”??:
http://www.zeitgeistmovie.com/
Susan,
We can certainly nationalize the money system while purchasing the stock of the FR banks and putting the resulting entity under Treasury.
That was proposed in the Monetary Control Act of 1934 after the Fed’s failed promise to prevent depression.
It failed, and we ended up with Glass-Steagall and other banking reforms, rather than a reform to the money system.
Of course, far more relevant is today’s proposal by Congressman Dennis Kucinich to accomplish the same end, this time with specific monetary authority reverting to the commons, as contained also in the 1934 Act.
http://www.monetary.org/hr6550bill.pdf
What is needed is a great deal of unlearning that allows the new understanding of what Nobelist Frederick Soddy called The Role of Money.
Ever upward.
Thank you joebhed. I just read Kucinich’s HR6550 IH, and loved it.
Of course, an Administration that was assertive in using its powers as the Republican House is in asserting its own, would just take over the Fed by executive order.
And by what authority could they justify such an E.O.? The Federal Reserve Act does come with a kill switch.
“wherever any power vested by this Act in the Board of Governors of the Federal Reserve System or the Federal reserve agent appears to conflict with the powers of the Secretary of the Treasury, such powers shall be exercised subject to the supervision and control of the Secretary.”
http://www.federalreserve.gov/aboutthefed/section%2010.htm
This is to beowolf
Yeah, it’s true that any administration may exercise its power grabbing potential to the max, and Repubs are setting a new low tone there, the accomplishments of the Kucinich Bill could never be achieved simply by having the Treasury overseeing a debt-based money system of fractional-reserve banking.
That would nationalize the debt-money and banking system.
Seems a bad idea.
We need to abolish it, not just put a new face on the parasitic pig.
Thanks.
What will they buy?
A much better question is to ask why they should buy anything.
All of the Fed’s actions to date have been explained by the laughable excuse that the economy would collapse if the Fed didn’t take action, with the corollary that the Fed’s actions would save the day.
Now that the Fed is slowly beginning to realize that they can’t do anything other than dig a deeper hole, it’s time for them to stop.
“Can the Fed buy up all their debt and hold it for a sufficient time to let them all get back on their feet?”
Jesus. When you say this, don’t you really mean:
“Buy up their debt and pass it along to a future generation, or hold it long enough to hope that inflation wipes out the value of the debt?”
That’s the kind of kick-the-can-down-the-road mentality that has got us to where we are today. How about buck up and default, let the creditors take the haircut they deserve for making risky investments?
Can the Fed buy municipal debt? As easily as it can buy underwater mortgages. All it needs is another SPV like Maiden Lane. Perhaps they can call it Duane Street or Reade Street or Water Street or Broadway? The Fed can also buy credit card loans, auto loans, student loans, pay day loans, but of course that would interfere with the usury game, which is borrowing from the Fed at zero and lending to consumers at up to 30%. What can be done is a matter of politics and nothing else. All this nonsense from Bernanke is just that. He is no different from Greenspan, just not smart enough to be unintelligible. Meanwhile, if the Fed wants stimulus, perhaps it can return a fair return to savers whose money realized through thift has been yielding nothing for 2 1/2 years. What do the Fed geniuses imagine the effect that has on demand?
Nearly everything written by and about the Fed is utter horseshit. Only the ignorant are fooled, but as George Carlin told us, think about how stupid the average person is, and remember that half of them are stupider than that.
Very ironic that Bernanke is now on the “deflationary train”. With globalization, the only way to drive rising standards of living for the majority in the west is to drive down household expenses.
Housing has already dropped to levels that help future families establish a decent living standard. Now with the game plan to drive down oil, consumers again get a huge deflationary break.
Has Bernanke learned his lesson? With globalization, only deflation can drive consumers purchasing power.
So, instead of “making sure deflation doesn’t happen here”, the new mantra is make sure deflation drives consumers purchasing power before Nov. 2012.
“Housing has already dropped to levels that help future families establish a decent living standard.” – Bahahahaha!
Yeah… right after the debt jubilee.
“… future families derive a decent living standard”.
In 2008, the US homeownership rate was 68%. Lets assume that 25% of US households really need to rent – so we end up with 7% of households that were not owners who now have a great deal that housing prices were down.
I think the plan is to wait for those 68% of homeowners to die off, but the government will probably figure out a way to have the debt transferred to their heirs.
For those who have not read Koo’s book here is a slide show he presented.
http://csis.org/files/media/csis/events/090326_koo_presentation.pdf
In reference to Bernanke’s speech he used a word that is rarely spoken “depressed” when commenting on real estate prices.
Japan is often spoke of the lost decade. We have already witness 5 years of this lost decade in real estate prices decling since 1996. In addition the S&P over the last 10 years has produced a less than one half of one percent compounded annual return.
American’s don’t want to realize it but we are a long way off from turning around the balance sheets not only of consumers but of the financial institutions as well.
Well respected Steven Roach also made similar comments espousing Japan & Koo
http://www.ft.com/intl/cms/s/0/0d390ba4-973b-11e0-9c9d-00144feab49a.html#axzz1QA4snhfN
The overleveraging issue is still raging from Greece to Ireland, Portugal, Spain, UK, and America. Global growth will continue to be hobbled by these legacy problems.
As Koo articulates, Austerity is not the solution. Unfortunately that is what is being prescribed.
Off topic this is to rich.
“the most stimulative fiscal and monetary policies in our history”
Mort
Bernanke is now on the “deflationary train”
http://www.youtube.com/watch?v=_kiNN5qQ53o
With 95% of QE2 going to foreign banks, what did you expect?
Do I want to see QE3? Nope.
Until insolvency is addressed we are throwing money at a global money pit that isn’t going to help Americans … except those getting commissions on the Fed monies.
I’m not willing to pay another penny to the TBTF toll collectors.
Trickle down and behavioral economics be damned.
Honest to god… is any of this surprising?
What pisses me off is there is no shortage of otherwise smart economists who continue to beat the Fed’s drum.
How lame does “wealth effect” sound now? Bernanke knew there would be no traction on that front, but he invoked the prescription anyway because he needed to buy time for the banks to make some easy money. Main St. be damned.
Also, can anyone name a successful neoliberal reformation that lasted, say, for 10 years or more? What is the shining example of neoliberalism?
If there isn’t one, then here’s what we ought to do: impose tariffs based on average labor rate plus some penalty for not building stuff in the US. If you want access to our beautiful markets, then you build your shit here!
What the hell good is a cheap pair of workboots if you don’t have a job to wear them to? They are still too expensive then. With full employment, we’ll shell out the money for the more expensive boots.
Velocity, baby. Forget pulling demand forward via credit/debt. Induce real velocity. Make things. Efficiency through innovation, not labor arbitrage.
Our so-called leaders are taking us down a path that really should be met with Guy Fawkes masks.
Ken,
Just as there has never been any goal= “fully educated workforce” in America, there has never been a goal of
“full employment”…
“If you want access to our beautiful markets, then you build your shit here”
FINALLY!!! Somebody is finally hinting around the perimeter of the real problem with our country!!! I just wonder how bloody a revolution would be needed for the kind of course change you’re talking about.
China did it.
“The corollary of this is that inflation will be non-existent on a secular basis. ‘
WTF ? why do pompous econ types like the word secular ?
I think what he mean is that inflation will be low as long as demand is low, or something like that
like it says in looking for mr goodbar, anything spills, it is milk, not sunlight
If the Federal Reserve Bank really wanted to do something to speed the repair of balance sheets, repair the economy quickly, and put new money directly into the economy, I can think of one way to do that: Buy Houses! They can pay above-market rates, write down the losses where commercial lenders have been reluctant to do so, then put them back on the market at realistic prices. It would LOOK like a bailout of Main Street while still in REALITY be a gift to lenders.
Unfortunately, it may be too late for even this type of action, since the slack in the economy seems to be calcifying. But until it is attempted, Uncle Ben can’t claim to have tried “everything.”
Plus, it would be fun watching Ron Paul have a cow when he hears about it.
All the Fed can do is loan and buy. The solution is to forgive or give.
The Federal Government should just give away debt-free fiat equally to the entire population after first banning so-called “credit” creation pending fundamental reform in money creation.
Why do we insist on pretending our money system is not a moral abomination? It is literally based on theft of purchasing power from the entire population including and especially the helpless.
“My conclusion from reading Mr. Bernanke’s prior statements and his most recent ones is that he wishes fiscal agents would take the lead. But he has accepted this will not happen because of the political environment. Reluctantly then, he is going to have the Fed assume the stimulative role.”
This has been obvious from the get-go. What isn’t obvious is why the press and much of the public fixate on the Fed — they’re second order players in this mess. Congress is primary, but I don’t see anything like the pontificating, navel-gazing, hand-wringing, and doomsaying over the lack of fiscal action as I do over every little tiny hint the Fed might or might not drop. All I get is one side saying “NO!” to anything that might help, the other side capitulating and nobody among the Serious People or the MSM calling either to account.
“What can the Fed do?” How about defining banking? The sh$t is flying so fast no one has a clue.
I think the Fed can hire every unemployed worker and make him or her an economist, or at least pay at the salary of one.
Let’s see – 6,000,000 workers x 100,000 = 600,000,000,000.
$600 billion, ONLY. Not even a trillion.
Given the consumer society that we are, my bet is that $ will go towards real spending, rather than commodity speculation.
We are a sovereign nation. We can do it without getting the OK from the IMF.
Sorry, it’s not that I don’t care enough, but I just simply forget to add that it should come with full retirement pension after 3 months.
I can not emphasize enough how useful 6 million extra ‘economists’ would be in manning the fort against an audit invasion by Ron Paul.
Between gov’t deficit spending and the Fed fulfilling its employment mandate ‘personally,’ I prefer the Fed expand its payroll.
And maybe pull him off the hot burner. :)
What do you think of paying zero or even negative interest rate on reserves? I understand that in Sweden, they went to a -0.25% on reserves where they were actually charging them for excess reserves.
Yea, let’s force the banks to counterfeit. That’s the ticket. NOT!
Reserve requirements should be 100%. Excessive reserves would be in excess of 100%. And if a bank doesn’t have 100% reserves or can’t borrow from the excessive reserves of another bank then tough luck; there should be no lender of last resort.
Our banking system is as crooked as the day as long. It is essentially government backed counterfeiting.
So actually that is a 100%+ reserve requirement. How do you make a loan of 5% of your reserves unless you have 105% reserves? If you buy them from another bank, that bank has to have excess reserves. Basically the banking system needs 100% + x% for the whatever total loan demand would be.
Where are all these reserves supposed to come from, and what are they made of?
It is one of the most deflationary ideas out there.
So actually that is a 100%+ reserve requirement. How do you make a loan of 5% of your reserves unless you have 105% reserves? If you buy them from another bank, that bank has to have excess reserves. Basically the banking system needs 100% + x% for the whatever total loan demand would be. pebird
Good point. At least for short periods of time till the excess reserves were loaned out, the system as a whole would require 100%+ reserves.
Where are all these reserves supposed to come from, and what are they made of? pebird
The reserves would come from deficit spending by the Federal Government. They would consist of new, debt-free legal tender fiat.
It is one of the most deflationary ideas out there. pebird
Agreed. That’s why a move to 100% reserve banking MUST include a means to replace existing credit with fiat to prevent the total money supply (money + credit) from shrinking as existing credit is paid off.
However, I don’t advocate a permanent 100% reserve requirement. After a bailout of the entire population was accomplished then fundamental reform should allow banks to risk as much leverage as they desired but with absolutely NO government backstopping of any sort and with rigorous enforcement of insolvency laws.
Thanks for the critique. You’ve sharpened my thinking.
If you understand the full-reserve requirement, all it says is that banks cannot lend money that does not come from the savings of depositors, who have given the bank permission to lend their money in return for a rent.
In order for there to be soundness in money, after all deposit balances have been “monetized” into being backed by real money, and separated between demand and non-demand balances, the amount of money in existence is the same as what bank credits were before.
So, how could this be deflationary?
What it is, in reality, is anti-inflationary , something quite different.
But, of course, given that any un-borrowed savings/investments are excess at any bank, then, yes that bank would lend them to another bank just as to another borrower.
Actually, I don’t think i understand the problem.
Of course with full reserve banking, ALL monies can be lent unless they are demand-deposits.
Any term depositor takes on a lender role.
But if the bank only lends real money, then there can be no losses due to a bank run, and no deposit insurance is needed.
Prof. Irving Fisher populated most economics textbooks for several decades with his how-to on achieving full-reserve banking.
It was proposed by Fisher, Douglas, Graham and others in their 1939 Program for Monetary Reform.
Well, since Greenspan set precedent by, at the height of his powers, advocating the Bush tax cuts (which the maestro now apparently wants rescinded), how about Ben coming out with some honest talk about how the bottom 95% of Americans will inevitably see their standard of living stagnate or decline over coming years and how to mitigate the most pernicious aspects.
Ben could, for starters, acknowledge that health care costs are a major reason increased productivity on the part of US workers has not resulted in greater real household spending power over past decades. He should challenge the “exceptionalist” fanatics (who mostly expect divine apocalypse any day now) with international comparisons. He should really think about going down in flames over this.
Further, the Bernanke could and should make efforts to abandon GDP in the same way various “quantities of money” have been abandoned, and focus instead on the status of the bottom 95% as criteria for the US economy’s success or failure.
Did you get the notion from our Coffee With Joe titled “Bernanke’s Monetary Impotence” ?
http://www.youtube.com/watch?v=Zliv3USGysM
And then ignore our our solution – the proper and priority USE OF THE MONEY SUPPLY.
http://www.youtube.com/watch?v=oo873Qu5yGk
Here’s a clue.
We cannot revive the national economy without understanding that the problem cannot be fixed by the machinations of monetary policy. That should be Bernanke’s first lesson.
You can start to see it in his unknowing eyes.
We need to first recognize that it is the “monetary system” that is broken and in need of repair in order to achieve the objectives of monetary policy – that of stable buying power of the currency(general price stability) and either full employment or sufficient economic safety net capacity.
Again, anyone who hasn’t grasped the content of Dr. Bernd Senf’s presentation titled “The Deeper Roots of the World Financial Crisis” here:
blip.tv/file/4111596
….cannot fully understand the unsustainable, parasitic nature of compounding interest under the debt-money system, and why Congressman Dennis Kucinich’s monetary reform proposal – the most revolutionary document introduced in the House of Representatives in a hundred years – is essential to move forward.
http://kucinich.house.gov/UploadedFiles/NEED_ACT.pdf
It’s not what the Fed can do.
It’s what the Fed can’t do.
I’m getting a little weary about the increasing spread of terms such as “Balance Sheet Recession”.
As everybody (hopefully) knows, Assets = Debts + Equity.
It appears inevitable that the next round of stories will involve increasing equity by wiping out the debts (default, not forgiveness).
I’ll give it about 6-12 months before this appears as a trial balloon in some major western countries (I don’t mean the peripherals like Greece–I mean the core members of the Paris and London clubs).
Fiscal stimulus has been effective in stimulating a recovery. That is American fiscal stimulus has stimulated a recovery in China.
The cure to the ailment isn’t economics. The cure isn’t financial. The cure isn’t capital, credit, or money. The cure isn’t jobs.
Think about a first cause.
The cure is legal, law, and the rule of law. Law gives birth to oversight, supervision, and regulation.
Second cause is social. The will to remedy. The will and capacity to oversee, supervise and regulate.
It’s difficult to get American to realize that their country may be corrupt.
Blagojevich becomes the second straight Illinois governor convicted of corruption. His predecessor, George Ryan, is now serving 6 1/2 years in federal prison.