A Nicholas Lemann profile of Janet Yellen in the New Yorker, based on interviews with her, is creating quite a stir, and for many of the wrong reasons. The article verges on fawning, but even after you scrape off the treacle, it’s not hard to see how aggressively and consistently the Fed chair hits her big talking point, that’s she’s on the side of the little guy. As correspondent Lee put it:
She’s simultaneously Mother Teresa (spent her whole life caring about the poor without actually meeting any poor people) and Forrest Gump (present when all bad deregulatory polcies were made, but miraculously untainted by them).
Puh-lease! She’s Bernanke in a granny package, without the history lessons.
In fact, as we’ll discuss, Yellen’s record before and at the Fed shows she’s either aligned herself with banking/elite interests or played two-handed economist to sit out important policy fights. Even if she actually harbors concern for ordinary citizens, she’s never been willing to risk an ounce of career capital on it.
It’s striking how often in the direct quotations from the interview that Yellen and her Nobel Prize wining economist husband, George Akerlof, assert that she’s concerned about the unemployed and feels for their distress. Lemann makes this a central focus of his piece, by starting with her first speech as incoming Fed chief, and highlights her remark, “Although we work through financial markets, our goal is to help Main Street, not Wall Street.” Readers are also supposed to be favorably impressed by the fact that her staff was able to find three living, breathing poor people for her to speak to on the phone so she could include them as anecdotes in her talk. As Lambert points out, they couldn’t have been destitute, since they did have phones.
Some passages are cringe-making. For instance:
…she wound up majoring in economics, which she talks about as if it were a helping profession. “What I really liked about economics was that it provided an analytical, rigorous way of thinking about issues that have great impact on people’s lives….Economics is a subject that really relates to core aspects of human well-being.”
One can Yellen’s remarks as taking interest in economics simply for its power. And we also have this about James Tobin, who Yellen said inspired her to apply to do her graduate training at Yale, where he taught:
Tobin was a person who really impressed me, because he had a passion for social justice and public policy….for Tobin it was always about making the lives of people better.
The article is also generously larded with standard defenses of the Fed, that it lacked the power to do much of anything about dodgy mortgage lending in the runup to the crisis. In fact, the Fed was so firmly in denial that even in 2007, Fed officials were convinced that banks were victimized by subprime borrowers, which is hardly a pro-intervention stance. Accordingly, the Fed did even less to enforce the Home Ownership Equity Protection Act, which required banks to report on subprime lending and also gave provided greater consumer protection for high cost borrowers in the subprime category, than even the bank-cronyistic OCC did.
And why did the Fed take so little interest? The real reason was that prior to the crisis, if borrowers bought more costly housing than they could afford, the losses fell mainly on them. There was enough of an equity cushion on average that the banks came out at worst only mildly dented.
In other words, readers are supposed to take Yellen’s claims at face value, when the Fed’s policy of saving banks by goosing asset prices and convincing itself that ordinary people would benefit because the “wealth effect” would lead to more consumption. The result has been widening income and wealth disparity and corporate profits at record levels as a percent of GDP, meaning workers are getting less than they’ve ever gotten. Yellen as the head of one of the regional Federal Reserve Banks and member of the FOMC can’t escape from responsibility for these policies. And there’s no evidence of meaningful opposition; unlike some Federal Reserve presidents, like Charles Plosser and Dick Fisher, who have often taken issue with the Fed’s official position in their speeches, Yellen made little use of her bully pulpit at the San Francisco Fed.
The article also contains an extended discussion of “Keynesians” in which Yellen declares herself to be a true follower and argues that the crisis proves Keynesians were right. Huh? Please tell me how many Keynesians predicted the crisis.
Lemann fails to distinguish that American Keynesians followed Paul Samuelson and bastardized Keynes by rejecting one of his central beliefs, that economies were inherently unstable because investors could freak out and suddenly take all their marbles home. American Keynesians instead adopted an equilibrium assumption (ergodicity) because that allowed them to create tidy mathematical models and proof-like analyses (I am not making this up; see Chapter 2 of ECONNED for the long-form treatment). That supports a “markets” orthodoxy, since economies are seen as self-correcting, absent periodic external shocks. The American Keynesian’s big bone of contention with the Chicago School is the correction time takes too long and that prices for labor are often “sticky”, which also means that the usual hallowed market clearing mechanisms don’t always operate well. That results in overly high economic and social costs, hence the need for intervention. The idea that internal factors, such as Minskian stability leading to financial instability, is absent from this sort of thinking but consistent with Keynes himself.
Although these differences are significant, Lemann overstates the dichotomy between monetarist followers of Milton Friedman and American Keynesians. In particular, Keynes himself debunked the “loanable funds” fallacy, that putting money on sale would induce businesses to take advantage of the cheap price and borrow and invest (the only ones that do are ones where the cost of money is a major product cost, and that’s financial players, who as we have found, plow it into speculation). Yet you see defenders of the Fed’s actions (usually making the argument that QE was beneficial, if less so than fiscal stimulus would have been) relying on “loanable funds” type arguments.
To put it more simply, if Yellen were as true to Keynes as she claims to be, she’d have been calling for more fiscal stimulus, particularly when it mattered, in the 2009 debates and during the fiscal cliff negotiations, rather than supporting the poor, wealthy-favoring, emerging-economy-imperiling substitute of super easy money.
So what are we to make of Yellen’s wildly-disconnected-from-reality patter? That Yellen is a closet socialist who has managed keep her head down and fool everyone for decades and is coming out now that she is safely in charge of the Fed? That Yellen is such a cloistered member of the economics orthodoxy that she really believes in “Let them eat QE”?
How about the most obvious answer, that Yellen is using this interview to run PR for the Fed. She leading a major institution that is under well-deserved criticism for its obvious preoccupation with banks during the crisis and post crisis period (and Lemann takes note of that issue, pointing out that the central bank’s critics range from Rand Paul to Bernie Sanders). She’s trying to brand herself as a caring grandmother who can relate to regular folks because she came from the wrong side of the tracks, and the chump public should trust the Fed’s actions as embodying her professed world view. Lemann promotes this effort to identify the Fed with Yellen’s supposed compassion for regular folk, starting with the article’s subhead: “How Janet Yellen is redefining the Federal Reserve.”
This positioning of Yellen comes off as heavy-handed “nurturant mother” imaging, recommended by George Lakoff’s to appeal to left-leaning voters. But this may not even be conscious; it may be so much part of the Democratic party hive-mind as to be reflex.
But a look at Yellen’s record shows she’s consistently advocated bank and corporate-friendly policies. As Zach Carter wrote in Huffington Post last September:
Yellen supported a host of economic policies during the Clinton era that have since become broadly unpopular. She backed the repeal of the landmark Glass-Steagall bank reform and she supported the 1993 North American Free Trade Agreement…..Yellen endorsed establishing a new statistical metric that would allow the federal government to reduce Social Security payments over time, by revising the consumer price index, or CPI, the government’s standard measurement for inflation.
And this isn’t all she stood for. Contrary to her pious claims of empathizing with the downtrodden, if you read her testimony during the 1990s, she was regularly described by Senators during her tenure at the Council for Economic Advisers as one of the most hawkish members of the Administration. She advocated cutting veterans’ benefits. She pointedly refused to cite increased concentration in banking as an antitrust risk and approved of communications industry mergers. She supported cap and trade. She favored austerity for Mexico during its 1994-5 crisis. She also stood with Gene Ludwig complained about deadbeat borrowers declaring bankruptcy in 1997, which was tantamount to throwing her support behind the bankruptcy reform bill that eventually passed in 2005. Reversing that bill has been widely cited as one of the most powerful single steps the government could have taken to stem foreclosures, since the threat of bankruptcy would have forced more servicers to restructure mortgages.
At the Fed, Yellen is given more credit than she deserves for sounding some mild concern about rising housing prices. She’s also been cited as the best forecaster on the FOMC, but given how the FOMC failed to see the crisis coming, her “success” is tantamount to declaring her the winner of a height competition among peanuts.
In other words, Yellen was in the center to center-right of the Democratic party technocratic elite of the 1990s and never departed from conventional thinking. She’s now trying to rewrite her record by making pious statements and getting her interlocutors to focus on what she presents as her character in the hope that they won’t bother looking at her actions. And Lemann proves that strategy works.
Yellen’s contention that she’s really out to help little people would be far more credible if she acknowledged her past anti-middle class policy positions and claimed that she’d made a Pauline conversion. But her institutional and political loyalties preclude that.
If you have any doubts as to whose side Yellen is really on, watch this exchange yesterday with Elizabeth Warren, in which Yellen gave evasive responses to Warren pointing out, in so many words, that the Fed has clearly punted its duties mandated in Dodd Frank to make sure the banks have credible living wills or else force them to divest operations so they can be resolved:
Reporters also saw through Yellen’s evasiveness. Business Insider scored Warren having “just destroyed” Yellen.
Lee nailed the strategy behind the Lemann article:
The piece is weirdly designed to prevent New Yorker-reader limo-liberals from joining forces with right-wingers who justifiably want to know WTF the Fed is doing.
Lemann’s most insightful remark is an aside: “Yellen doesn’t leave footprints.” And that’s the real reason she got the job. She represented policy and even stylistic continuity with Bernanke, who was collegial and consensus-oriented. So Lemann’s lead in, that she’s redefining the Fed, is all wet. Her biggest effort at change seems to be new, more flagrant exercises in optics.
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There is a constancy with Obama’s appointments. Supporters should be concerned with Supreme Court contenders – but they probably aren’t.
I disapprove of much that Obama has done, and I voted third party in 2012, but his Supreme Court appointments (Sotomayor, Kagan) appear to be much less destructive than many of the other Supremes (Alito, Thomas, Scalia, Roberts, Kennedy).
I listened to Paul McCulley yesterday lauding Yellen, in an at times nauseating two hour stint on Squawk Box. He seemed certain that the FFR would be raised to about 2.5% in the near future, and that would a very healthy move indeed. Of course it would be the Yellen Fed doing the ushering, which in the end (stop any remnants of recovery in its tracks) would likely lead to Yellen’s certain removal from her lofted perch.
We are stuck at zero bound just like our friends in Japan, McCulley’s prediction notwithstanding. On the other hand, if Yellen somehow does the unthinkable, and raises rates to the levels McCulley intones, then you can bet the farm Ms, Yellen will be put out to pasture in an ugly and unceremonious fashion.
Stuck between a rock and a hard place… I don’t understand what miracle people are expecting from her.
At this point we expect her to fall on her sword.
Its quite clear from what senator Warren has said, the Fed must obey the letter of the law, if its to be credible.
Puh-lease! She’s Bernanke in a granny package, without the history lessons
or ,,,, to actually watch a woman get older before their eyes
—————
A lot of derogatory age comments could be said about many of the leading men out there, but for some reason they are spared…
We aren’t big on PC here.
She’s using that as protective coloring for her policies, the same way people assumed about Obama that a black man would naturally side with the poor. If you take advantage of the positive elements of a stereotype, you have to be prepared to live with the negative ones.
And older men in important positions do have the age issue raised, and in “grandpa” terms. See:
http://www.thedailybeast.com/articles/2008/10/29/how-mccain-made-grandpa-look-bad.html
And McCain tried, not very successfully, to flip the ageist issue:
http://thecaucus.blogs.nytimes.com/2008/05/22/mccain-judges-obama-that-young-man/
BTW, I’m not pointing fingers at NC. I’m just pointing out something that I find disturbing. Did Hillary use the advantageous elements of ageism?
I’m wondering if Yellen is consciously or subconsciously being forced into using it if she does not want to be pushed out like Hillary was using this tactic.
Whether you like these women or not, I’m not convinced these tactics are not doing women any favors and I just wanted to bring it up.
Predators are known to use a benign appearance to mask intentions. The last thing a predator wants is to stand out.
Hillary will be too old for the presidency, too. If she gets the nomination, it’ll be as a consolation prize in full knowledge that the Republican (whoever) will be elected. At the moment, it’s Obama’s job to make sure that happens.
That happened to McCain, too; I think it’s the real reason he chose Palin – as a small gesture of resentment.
Since when is granny packaging considered derogatory, that’s your projection. I’m a grandfather, my wife is a grandmother, I mean ,some of my best friends are grand parents now, and they are some of the finest people of any age you’ll ever meet, we just lost are looks due to be over the age of 29, except for my wife of course who I reduce to a sex object on a daily basis. But other than that, granny means to me a kind, past the middle of middle age person who will baby sit any time any where at a moments notice. Granny, derogatory? Why don’t you come over here and say that to my face sonny!
I agree – I saw the phrase that way, too.
Not sure about here, but I regularly point out that examples from McCain to Bernie Sanders are “too old” – mostly for the presidency. I don’t consider it derogatory; it’s a technical consideration. Might apply to heading the Fed, too.
Age has nothing to do with the job of being President. McCain’s problem is he is too stupid and cruel for the job. Bernie would do just fine, and as far as the 3am call, they have staff. 150 years of decisions were made without a situation room or a hotline. The President’s real job is management of the staff and his party. Although a cabinet secretary, Shinseki is a good example. Shinseki’s whining about his staff lying to him is a clear sign these people don’t understand the job. Shinseki is not elderly, and he couldn’t even figure out how to blame non-military bureaucrats at the VA. Ike is a counter example as supreme allied commander. He had all these arrogant prices with more experience and better minds than Ike, but Ike managed to get them to sit in the same room without Patton shooting everyone. Now that I think about it, usually the President just stumbles around anyway, and Obama’s age and knowledge of text messaging haven’t kept John Kerry in line.
40 year old Hillary was too cruel and greedy to be a good President. People do expect the candidate to make an effort, and the rigors of running will wear on Hillary or anyone at a certain level of health.
In my book, age is one of those variables worth considering but at the bottom of the list.
“She’s Bernanke in a granny package”
She reminds me of Velma from the old Scooby Doo cartoons.
another center right lesser evil, as the country slouches toward more austerity and another crash.
Yellan
“Extremely complex documents”
Perhaps.
The goal however is simple.
The continued extraction of purchasing power from a larger and larger cohort of people until all the remains is the people inside JPM and those poor overworked people outside.
The FED and all central banks goal from the get go is to use all methods avallable to concentrate wealth into the insiders hands.
This is the capitalist system folks.
So what Yellen said is that a bank’s “extremely complex” and possibly “tens of thousands of pages”-long resolution plan with possibly trillions of dollars of assets under its control is acceptable. I can see the regulators now…”Uh, Mr. Dimon, we need you to change a couple of paragraphs of pg. 6375 regarding your 10th largest subsidiary in the Cayman Islands, and then you’ll be good to go until next year.”
Works on consumers.
Seemingly in the 21st Century (or since Ronald Reagan 1980s or 1970s ?) elite Fed Gov poli-trick-ians (including the Fed Chairs like Yellen The Bank$ta Fellon Apologist) are oligarch/1%er operatives/PR hacks.
From my basic US History 101 understanding, there have been examples of politicians successfully advocating & achieving Progressive Economic public policy that actually helps the USian Avg Jane Public aka the 99%. Pres. LB Johnson is one, achieving the Civil Rights Act, Medicare, Medicaid. FD Roosevelt’s New Deal, T Roosevelt’s trust-busting are examples of other Presidents. There were also Non-politician outsider activists like ML King, who advocated excellent 3-part public policy of Civil Rights for All, Economic Rights & Opportunity for All, and anti-war/anti-empire.
1 In 2014 is it possible to actually achieve Progressive policy again? Do politicians advocating Progressive Economic policies get threatened by the Deep State by the equivalent of Colombian narcotics Mafioso Pablo Escobar’s “plata or plomo” aka silver (sell out like Obama, B & H Clinton, etc) or lead (get murdered by a “lone mentally ill assasin” like ML King or JF Kennedy)?
2 If #1 is no, when did this “silent slow coup” occur? Why was LB Johnson successful in ~1968 in say achieving Medicare, whereas B Clinton & Obama are hostilely against Medicare For All?
3 If #1 is no, what can we citizens do that is most effective in terms of organization/activism, such that a powerful poli-trick-ian (e.g. a President, Senate/House Leader, etc; not a marginalized Sen Warren or Sanders that has limited power) will want to “jump in front of our parade” to advocate actually Progressive Economic policies like Medicare For All?
The Right Wing money machine made it easier for Republicans to slowly build a base in Congress, the Statehouses, and the media that didn’t do very much for quite some time but squawked a lot and could depend on steady infusions of cash even with short-term minimal returns.
If you are wealthy and for whatever reason on the Left of the political spectrum (not many of those, but a few) then you are there for emotional reasons most likely, and emotional people want results. They want badly to DO something (that’s why they are called do-gooders). Men (and a few women) who have bankrolled the Right in this country could and did always take the long view. Obstruction, confusion, and forcing “compromise” on their opponents was often very useful to their bottom line. They could get results without radically changing anything. If Progressive/Left elements want to make a difference, they would have to swim against every current of power in this society: the power of money, the interests of the MIC, the attitudes of millions who see themselves as temporarily foiled millionaires, the laws and customs of the land that respect property more than fairness or justice–you get the picture. In short, the Left has to move the paradigm much further than the Right ever had to. Where do you find people to support and fund a grinding battle of attrition over decades against those entrenched powers and interests?
As for #2, this is really the unravelling of hard won progressive gains. Career wise, the Roosevelts and LBJ were long time politicians who understood the system they inhabited. They possessed, firstly, character, which these later politicos plainly don’t, and secondly the assurance and self possession that financial independence gives. (The Roosevelts came from old money and LBJ married one of the wealthiest women in Texas, Lady Bird.) The Clintons and Obamas can be argued to be Nouveau Riches. (I would put in an argument that the Clintons and Obamas are excellent examples of Narcissist personalities, but that charge can be levelled against most politicians if one takes into account the performance aspect of retail politics.)
ambrit, thanks for your insightful reply, with your interesting idea of contrasting the oligarch (Roosevelts, LB Johnson via marriage) vs. 99%er non-oligarch (Clintons, Obama) wealth as possibly being impactful on policy. I had not read this idea before.
If true, this increases my respect for LB Johnson. Constrast LBJ with another pol who married a ultra-wealthy wife, John Kerry. I would assume that the majority of this cohort are more like Kerry, “status conscious/climbing”, desperate & thankful to be part of the wealthy, & willing & eager to enthusiastically verbally fellate the oligarchs. Kerry certainly does so.
OTOH LB Johnson married into the 1% class, & then “was a traitor to” his new “class”! If Obama is the oligarch’s Manchurian Candidate, perhaps LBJ was the Jane Q. Public’s Reverse Manchurian Candidate!
Dear PND;
Well, I was somewhat mistaken about Lady Bird. (Chews on foot in mouth.) She did have some money of her own, (her father was a successful small businessman,) and by all accounts was an excellent businesswoman and executive. She organized LBJ’s affairs and made them millionaires back when that meant something. Johnson himself was a teacher for several years before entering politics and had direct knowledge of 1930’s poverty and racism. The rest is history.
Do go through the Wiki on Johnson. He was a fascinating man.
Or better yet, read Robert Caro’s wonderful series of Johnson biographies, beginning with “The Path to Power”. A fascinating man, indeed.
Better wait for Robert Caro’s next book (covering Vietnam) before getting all misty eyed about Johnson. And his “character” is a mixed picture.
http://en.wikipedia.org/wiki/Robert_Caro#The_Years_of_Lyndon_Johnson
Caro is very even-handed – and perhaps even a bit harsh – in his treatment of Johnson. Apparently so much so that Lady Bird refused to be interviewed a second time by him after publication of the first book.
Caro’s second Johnson book is very harsh–the stolen Senate election, the lies about war service–but he seems to have gone soft in the most recent volume where Johnson is portrayed as a victim of Kennedy snobbery (all true no doubt). However it will be hard to sugarcoat Vietnam.
After the payback in Dallas, young Lyndon was nobody’s bitch.
You left out Truman. He doesn’t fit the blueprint.
Truman’s rise came from investigating war profiteering at least from being Senator. If he was so motivated, I think he would have been the next elected President as he had become a household name. There was later GOP propaganda to paint him as the beneficiary of FDR’s largess, and even his nomination to VP was related to his investigation into unaccounted funds going to New Mexico and Tennessee. Liz Warren’s early appearances are fairly similar. Sure she’s doing all right, but she’s not disgustingly rich. Her star is directly linked to her reformist and accountability language as opposed to her accompanying spectacle which is volunteer of the year in a small town. Has she uttered nonsense about hope? Nope.
Truman out of respect for FDR told the chief of staff he was going to bring his committee’s entourage and press to Los Alamos where he thought White House staffers had set up a money laundering scam. When he was briefed on the bomb, Truman realized he almost told everyone about it in ’43.
IIRC, Truman got his start in politics when a scout for the Pendergast organization recalled meeting him in France, and said Truman was the only army officer he’d met whose men didn’t seem to want to shoot.
Got over that, didn’t he. Two nukes obliterate two cities and a couple hundred thousand people in an instant when the War was already won. Japan was totally defeated, and negotiations underway for Japan’s surrender in advance of the Soviet invasion of Japan per Stalin’s commitment to the US to do so after the German defeat in May. The long-awaited Soviet assault had been scheduled for early August. It was canceled and re-scheduled so that the Bombs became demonstration shots aimed at the leadership in Moscow (and the rest of the world, of course) against the advice of the top military brass.The invasion, of course, was off and the Japanese in a state of shock.
I think in important ways that’s where it all went wrong. Right there. The Path Not Taken.
Some speculation on why the New Deal was so successful, but , but with none of the work done to support it, so this is just spit-balling. Consider the 1910’s, 1920’s and early 1930’s and what has happening prior to FDR’s election. In Russia the Czar and his family were gunned down, and an entire aristocracy was liquidated. That makes for sobering headlines. Dig a little deeper into history and consider that the United States was bordered by a country embroiled in a civil war, Mexico, that included an agrarian reform movement, and cross border raids into Texas. Following the Great War, Great Britain had a war for independence on its hands across the water, in Ireland, which was not immune from class issues at all. So, when FDR is sworn in, in 1933 following an economic collapse, the idea that society could fall into chaos, that elites could be liquidated, or that civil was a possibility was not so hypothetical. It isn’t that fellow elites gave FDR a big thumbs up, but perhaps they were less strident and obstinate than they would be if a modern day FDR was sworn is as president. Finally, FDR’s policies were unequal on race thus making them palatable to Southern populists, but at the same time delaying the reckoning that would come with the Civil Rights movement. That meant there was an expiration date built into the social construct between the 30’s and 60’s and there would eventually be a new division between populists who are overcome by racism (a surprisingly large grouping of US citizens) from the more utilitarian left.
so the possibility of elites falling or civil war is now more “hypothetical?”
The New Deal was successful because the Democrats weren’t the post Watergate party dedicated to making the robber baron class slightly hipper they are today. I think the Democrats outside the South were heavily influenced by non-captured groups. Democrats treat blacks like shit because where are African Americans going to go. Hispanics elude the current Democrats, but because they aren’t a captured group, they won’t blindly follow the Dems on their corporate and right wing giveaway. The reason all those kids are in the camps are because Obama directed the INS to Crack down so he could tout how he was on the poor minorities for 2012 much like Clinton with his warehousing.
African-Americans use to vote Republican and almost voted for Nixon in 1960. The Irish swung from the GOP to FDR after almost 40 years of GOP support, but even the craven Democrats grasped this. Look at Hillary, she’s claimed she was mistaken on the Iraq War largely that’s why she isn’t President but after the failures of Obama’s smart wars, the Democrats are at risk of losing large amounts of people who consider themselves anti-war or sane because there is no justification.
LGBT issues are good examples. With the rapid drop of opposition to gay rights in white America, the LGBT activists sensed an opportunity to squeeze and they were ready to crush the President. The Democrats led by Obama only repealed DADT after a federal judge struck it down, but the Administration repealed officially because they were about to be exposed as nothing more than hostage takers.
The DNC mentality is to show how they are more competent than Republicans, but sadly they never get the credit they crave. They want to be rewarded for their competence in forwarding mergers, in wars (look at the Balkans, ending Iraq, fighting the smart war in Afghanistan), running drones without lefty objections, reducing the deficit, ending welfare as we know it, ending regulation (Glass-Steagal) and so on.
A Big part of the New Deal was prosecuting banksters – it was a big part of his new contract with the 99 of the era:
“Few today remember that a half-century ago a number of New York and Chicago’s top bankers were sentenced into penitentiaries-the New Yorkers into Sing Sing-the senior partner of J.P. Morgan and Company, the president of the National City Bank, the president of Chase Bank. Every one of them had been found to be doing reprehensible financial tricks. They were selling their own friends short. They were opening their friend’s mail and manipulating the stock market. They were manipulating everybody. They were way overstepping the moral limits of the privileges ethically existent for officers in the banking game, so a great housecleaning was done by the New Deal.”
Buckminster Fuller “Critical Path”
Reason obeys itself, ignorance submits to what is dictated to it. Thomas Paine.
Darn typos – A Big part of the New Deal was prosecuting banksters – it was a big part of his new contract with the “99%” of the era:
I think the golden era was short lived. 1929 was not the first world depressing bust. Why was it different? What made an aristocrat so eager to master the forces the caused speculative bubbles?
‘Yellen comes off as heavy-handed “nurturant mother.” But this may not even be conscious; it may be so much part of the Democratic party hive-mind as to be reflex.’
ZIRP: for the children!
Central banking 101 teaches that monetary policy can effectively pursue one policy at a time, not the two goals (monetary stability and full employment) statutorily imposed on the Fed. When one conflicts with the other, the modus operandi is simple: give lip service to monetary stability, while letting the U-rate rule policy.
But the Fed’s artful dodge goes deeper still. ZIRP, and the sharply uptilted yield curve produced with T-bills at 0.02% and 10-yr T-notes at 2.55%, is a time-honored way to bail out banks without Congressional appropriations. Citibank was saved this way in the early 1990s. Twenty years on, plus c’est la même chose, as ZIRP indecently drags on into its sixth year while asset prices bubble ominously.
That is, even ‘full employment’ is just a convenient smokescreen for the bank cartel to recapitalize itself with ZIRP, by claiming public policy objectives as it malevolently deforms the entire economy. The wonderful thing about having two statutory objectives is that ‘full employment’ can be cited to lower rates, and ‘monetary stability’ invoked for those once-in-a-lifetime singularities when rates have to be (pardon me for saying this out loud) ‘raised’ (though ‘enhanced’ is the preferred euphemism).
Go, go, Janet B. Goode!
Thank you for your comment, Jim Haygood. Looking at a chart of U.S. Treasury bill rates is like looking at the mortality of the U.S. economy… flatlined. After 6 years of Zero Interest Rates under the Fed’s policy together with regulatory and legal forbearances, what have they accomplished other than enabling the greatest market manipulation, theft and transfer of wealth in the nation’s history, and the concentration of that wealth in the hands of a few?
That the Fed remains in denial is telling and demands profound systemic changes IMO, although they are not the only institution, agency, or branch of government deserving of such.
When one conflicts with the other, the modus operandi is simple: give lip service to monetary stability, while letting the U-rate rule policy.
This is the most ridiculous, ahistorical right-wing drivel you’ve written since yesterday. Never has the Federal Reserve placed unemployment above inflation fighting in its 100 year history. I’d suggest you research the term “opportunistic disinflation”, whereby the Fed has maintained a mutli-decadal policy of attempting to choke off employment recoveries for fear that someday inflation might just maybe possibly occur.
Kudos though on continuing your tireless efforts to misinform and brainwash via Ron Paul’s newsletter talking points.
‘Never has the Federal Reserve placed unemployment above inflation fighting in its 100 year history.’
No, never! But during the chairmanships of Arthur Burns and G. William Miller (spanning from Feb. 1970 to Aug. 1979), the CPI increased from 38.0 to 73.8 — an annualized rate of 8.12% — as the dollar collapsed and the D-mark and swissie ruled.
Just the facks, kind suh …
First, the inflation of the 1970s was the result of fiscal policy, not the Fed. Johnson refused to raise taxes when he ratcheted up spending for Vietnam, his Great Society, and beating the Russkies in the space race. He figured, probably correctly, that a tax increase would be seen as due to Vietnam and would be really unpopular. Deficit spending when an economy is at full capacity is pretty much guaranteed to create inflation. And inflation became self-reinforcing due to labor having bargaining power, and it got another kick with the oil shock of 1973.
Volcker set out explicitly to crush labor, but the Fed has managed adeptly to keep that out of the record. As William Greider reports in his book “Secrets of the Temple,” Volcker kept a card in his pocket in which he kept track of weekly construction wages. His goal was to get them to go down. He also remarked that unions needed to “get it”.
The divergence of wages from productivity gains happens to coincide almost exactly with when Volcker took over at the Fed. Stagnant worker wages and the liberalization of banking led to the consumer debt bubble that gave us the crisis.
Oh, and that period right after Volcker brought inflation down and the dollar got really strong? That killed US manufacturing. You can look at the record of auto sales, for instance. Even though US car makers had been losing share in the 1970s, in low end cars, it was the strong dollar that allowed the Japanese to move, hard, into higher priced vehicles. They never gave back the ground they took. That was the reason for the Plaza Accord, in 1985, because the yen was widely seen as too cheap v. the dollar.
Be careful what you wish for. Although you’ve never seemed to be a fan of workers, so perhaps you are happy with financiers dominating the economy and crappy growth and high unemployment.
Raise taxes to avoid inflation? What are you talking about? Higher taxes are inflation.
Higher corporate or sales taxes, maybe, under some conditions. Higher income taxes, not so much.
Please study up on the fiscal multiplier…lordie.
Fiscal multiplier? You’ve got to be kidding me. Ms. Smith you can be a very thoughtful person but this stuff is not nearly as complicated as you make it out to be.
Deficit spending leads to GDP growth. Even the IMF has been forced to admit to that and has cited empirical data from a large sample of countries.
I’m not spoon-feeding you. You really need to do your homework.
Inflation is inflation whether is occurs in taxes, real estate, stocks or commodities. Saying it isn’t inflation because of a “fiscal multiplier” is bloody ridiculous.
You econobloggers have delusional pretentions of authority.
It’s a big Internet. May you find true happiness elsewhere!
The Japanese also had superior quality and mileage, and were dominating in other important sectors as well. The Plaza Accord destroyed Japanese aspirations within 5 years, and they’ve not yet recovered.
Yves,
You might attribute a wee bit of the loss of auto sales by US makers to other factors:
Like the fact that the 70’s cars were junk… and the bean counters rise to power ……. Note Chrysler’s rise from dead when Iacocca ( a car guy) was put at the helm in the early 80’s…..
Not meaning to downplay 240 yen to the dollar… it was a big help
I never said it was the only factor but it put a big nail in the Big Three’s coffin. Track US carmarkers’ market share v. the rise in the dollar in the early 1980s.
Suezilla!
There needs to be a serious examination of the economic career field. No other job can be so wrong about most everything except if it is coming from an economist. Economist continue to enjoy large followings even when they don’t have a clue and miss the boat.
I still remember all those so called leading economists vouching for Yellin to run the Fed. They did not like Summers but had a high opinion of her so they advanced her position as far up Washington’s elite bass’ as they could. One prominent economist claimed she was one his best students — ever. Sure, I know what the price of tea is traded in China so that makes me an expert in tea production.
None of these great voices of economic reason — ever so intellectual — ever so thought provoking — went too deep into her work history — but they certainly knew it. When I look back they did not share much with us. It was as if it were all pristine — nothing to see here — move your ignorant self along. “We know what’s good for you.” Count me as one that was fooled.
The only ferreting out on who we were getting was from intrepid journalists like Zach Carter. But who follows these guys?
With all those expert opinions in place, all that Nobel laureate backed fire-power, the Washington elite listened. We got Yellin to run the Fed. Job done.
If that is the state of peer review in economics…. then we know the system is totally rigged against the 99.9%. Their opinions should not be taken seriously.
That sparks an interesting thought. In the old days, meteorologists would have competed with economists for the “most wrong about everything” title. But with today’s numerical atmospheric models, meteorologists are looking pretty good by comparison. Has mainstream economics has become the refuge of failed meteorologists who can’t build numerical models that even slightly reflect reality?
It was such a victory to get a Rubinite like Summers quashed that most people weren’t prepared to look at any replacement that hard. And Yellen is better than Summers would have been, although that is a very low bar. She is intellectually more flexible. She’s not committed to deregulation, for instance.
Yellen is probably the best person that Obama would have chosen. But she is in thrall to economic orthodoxy. If you can move conventional thinking, you can move her.
Is this a compliment of a sort, for Obama choosing the best possible choice, from a strictly limited set of candidates that are even deemed worthy, and rejecting Summers? And also, is this proof that there is no truth to the claim, that NC is run by crypto-republicans? Lambert’s oblivious comment about having a phone proving you are not destitute proves he does not read the Drudge Report on Obama Phones. Almost everyone has a cell phone or a land line, for free, if they really want one! Which happens to be true, but not because of Obama, but because of previous social insurance legislation. For example, aside from Welfare Queens automatically qualifying, solid blue collar types on SS disability also qualify for cell phone service. It’s kind of hard to get job without a phone in this day and age.
Q: Was this program instituted by the Obama administration?
A: No. Nor was it just instituted “earlier this year,” as the email claims. The program as it exists today was created over a decade ago by an act of Congress, the Telecommunications Act of 1996. A version of the Lifeline program was already in operation as far back as the early 1980s. (Source: USAC.org)
Q: Does the program offer every welfare recipient a free phone and 70 minutes of wireless service?
A: Not necessarily. The specific benefits vary according to locale and service provider. Also, the program is designed to help low-income people generally, not just welfare recipients. Examples: Safelink Wireless | ATT Lifeline and Link-Up | Verizon Low Income Programs. (Source: FCC)
Q: Is it accurate to say that taxpayer money is being ‘redistributed’ to provide these services?
A: Basically yes, though not in the sense one might assume. Apart from being administered by the FCC, it’s not a federally-funded program. Since its inception, the program has been financed via the pooled contributions of commercial phone service providers, which in turn impose small monthly fees on their regular customers to recoup the cost. (Source: FCC)
http://urbanlegends.about.com/od/barackobama/a/obama_phone_free_cell_phones.htm
No, he could have picked Danny Tarullo, who was at the Fed and was tough on banks.
I’m saying Yellen is the best an unabashed neoliberal like Obama would have chosen. Remember, he was all gung ho to give us Summers until the noise got too loud.
Yves,
Obama could have nominated Thomas Hoenig, who although a flyover state Republican, seems more in tune with Elizabeth Warren, particularly on the regulatory front.
Yes, he was another respectable choice that was passed over.
Yves – nice nut-shelling. Yours is a great writing style for this discussion format and these fast-moving topics.
Perhaps worth talking about Lemann, who was once one of Charlie Peters’ boys–young writers mentored by Peters at the Washington Monthly. The avuncular Peters was a self described New Deal Democrat and strong advocate of outside the box revamping of what was then called “bleeding heart liberalism.” I recall reading him back in the 80s and his enthusiasm for something called neoliberalism.
It all sounded fairly benign back then and Peters, a former newspaperman, was also a strong advocate of journalism’s role in keeping government honest.
Cut to today and neoliberalism has become a nightmare and journalism’s watchdog role rarely to be seen. The former stormers of the ramparts are now inside dining at the king’s table (these include, btw, perhaps Peters’ best known protege, Michael Kinsley).
Not sure what lesson is to be drawn from this but it does reinforce my view that Orwell’s most prescient book was not 1984 but rather Animal Farm. The outsiders become the insiders….the some who are more equal than others.
Bernanke was an aloof academic, but even he cannot hold a candle to Yellen. It’s clear to me she is the loyal career bureaucrat brought in to go down with the ship. But at least it’s entertaining if you can remain detached. Bernanke was a bore. Yellen is the drunk grandma you’ve got to wheel out of the room when the guests arrive.
Seems like Yellen is actually the Professor Umbridge of the Fed.
Loving it:
“She’s using that as protective coloring for her policies, the same way people assumed about Obama that a black man would naturally side with the poor. If you take advantage of the positive elements of a stereotype, you have to be prepared to live with the negative ones.”
And….
“Bernanke was a bore. Yellen is the drunk grandma you’ve got to wheel out of the room when the guests arrive.”
Also….
“She’s simultaneously Mother Teresa (spent her whole life caring about the poor without actually meeting any poor people) and Forrest Gump (present when all bad deregulatory polcies were made, but miraculously untainted by them).
Puh-lease! She’s Bernanke in a granny package, without the history lessons.”
More ZIRP-induced ‘prudent investment’:
NEW YORK (MarketWatch) — The African nation of Côte d’Ivoire was set to sell dollar-denominated sovereign debt on Wednesday, despite defaulting twice since 2000, according to a report in The Wall Street Journal.
The country was planning to sell at least $500 million in 10-year bonds, which may yield around 5.875%. Côte d’Ivoire is likely to benefit from a surge of investor money into riskier bonds as investors search for higher-yielding investments amid low interest rates.
http://tinyurl.com/mskd9c2
————
As they say in America’s ‘buy here, pay here’ used car lots, EVERYONE DRIVES! All you need is ninety-nine dollars and a dream.
Grateful Ivoirians should build a statue of Saint Janet in Abidjan. (Not that proceeds are actually going to spent on them, mind you).
ZIRP … for the African children!
OMG! Major train wreck coming. Yet the media and public will be angry at the Ivory Coast when they default, not the dumb investors chasing yield and the central banks driving them away from even higher priced debt.
Probably part of the Hollande-Obama deal. Ivory Coast has oil; the EU needs oil; France can’t bribe IC with such a bond; who does this leave? Goldman Sachs. Doing God’s work in Africa.
Nkosi sikelel’ iAfrika, as the Xhosas say. God bless Africa.
With ‘friends’ like GS, they gonna need it …
Since you mentioned Côte d’Ivoire (Ivory Coast), it’s worth noticing that this is one of the modern countries that continues the age old practice of slavery.
http://www.antislavery.org/english/campaigns/cocoa_traders/
Yellen was sending a signal. As she put it that day, “Although we work through financial markets, our goal is to help Main Street, not Wall Street.” More than five years after the financial crisis, historically high numbers of Americans are still out of the labor force, working part time when they’d rather be full time, or unemployed for more than six months. Yellen spoke mainly about unemployment, and told the stories of three blue-collar Chicagoans, two black, one white, who had lost their jobs in the recession. Her staff had found these people for her, and she had spoken to them on the phone before her speech. Two of the three—from Chicago’s desperately poor West Side—had criminal records.
The poor have been relabeled as criminals according to the New Yorker.
What did she actually say to these three desperately poor people?
What could she possibly say to them?
Yellen: How’s it going?
Poor person one: Crappy.
Poor person two: Shitty.
Poor person three: I’m hungry.
Yellen: Why are you poor?
Poor person one: I was working for Philips in Sparta Tennessee and they closed the factory and moved it to Mexico.
Poor person two: My job went to China
Poor person three: I failed the drug test and they moved my job to China.
Yellen: I have a job!
Poor person one: What job is that?
Poor person two: Will you share your money?
Poor person three: Wanna buy some pot? If you have a job, you have money to by pot.
Yellen: My job is to make sure the banks get fed by the FED.
I am not the sharing kind, get your own money.
I don’t smoke pot, but if you have coke, I’m all nose.
Yellen: See, I care about poor people. I have spoken to three of them!
The 90s were pretty depressing as we watched our social network ruthlessly dismantled. When you think about it, it was remarkable that we salvaged social security and medicare. So Yellen was all for the bad things back then. Naturally she needs to change her persona because all those policies crashed like the Hindenburg. This is not to forgive her PR; but PR happens. Yellen was gung-ho for Clinton to reduce the deficit, aka government spending, and now she’s all for mainstreet all the time. If she understood the problem she and her colleagues created by balancing Clinton’s budget and indebting private citizens beyond their capacity to function, she’d be a better economist. But it’s a confession she can never make. And besides she can play unemployment off against inflation till the earth freezes over. From disgust. We’re all indignados now.
I thought Liz was throwing her softballs. 10,000 page living wills. What a farce. Why didn’t Liz cut to the chase and ask what the Fed plans to do about 1.2quadrillion in derivatives?
Oh, I thought Warren was enjoying herself immensely. Yes, she could have twisted the knife and asked Yellen to provide a letter saying when the Fed was going to make its determination, but she might prefer to do that, along with other related requests, via letter. You can only do so much in five minutes.
She might also not want to look like she’s beating up on a nice old lady. That can backfire. Geithner was so obviously squirrely in her COP interviews that he handed her the opportunity. She made her point and all the media accounts got that Yellen was just stonewalling Warren.
I would have settled for asking her whether, _yes or no_, the fed found JP Morgans living will credible. Without all the double talk.
oh yeah…more trickle down the sewer economic benefits for the surfz
this is her talk but notice where it was given… the snoreyorker article suggests this was some
type of neighborhood (grass roots averrance) revitalization event…
http://www.federalreserve.gov/newsevents/speech/yellen20140331a.htm
it was a banker teflon / astroturf organizations jamboree where they compare notes on how to
play the neutertainment media into creating “feel good” and do nothing stories…
the EVENT was held with all these notable “community” people providing color commentary and suggestions for ‘proper protection of the little people” :
http://www.federalreserve.gov/newsevents/press/other/20140307a.htm
Rick Freer, American Bankers Association; Claudia Lima, Local Initiatives Support Corporation, Bruce Gottschall, NHS of Chicago (retired)
LISC is a banker owned organization which funnels and controls certain tax credits to “accepted and approved” organizations and there aint no south side of chicago “neighborhood” opportunites that LISC handles that don’t have bank fingerprints all over…
NHS and neighborworks is owned and controlled lock stock and barrel by the banks and the banking system…not compromised…or bent…owned…originated by the bankers. of the bankers and for the bankers….almost everywhere it has opened an office, the community soon collapsed…in what my not so white friends might call, creative urban negroremoval (urban renewal), where instead of paying for the properties through a eminent domain lawsuit, the properties are taken by long term destruction and devolution of communities to insure that there can be cheap assemblages for “qualified and accepted” developers to come in decades later and “rebuild”
bumped into this cadre of stalinists two decades ago…the suits change but the story stays the same…and if you don’t follow the agenda, you get photo-shopped out of the history books…
And speaking of the 90s, that dark decade. It was a frenzy of offshoring both jobs and corporations. Without a care about the consequences. Today Jack Lew is advocating reversing the tax loop hole for corporations so they will bring their money and jobs home. Calling for patriotism. That’s a good one. It should have stood to reason, even for the dumbest policy maker in the 90s, that if you offshore all your manufacturing and labor to other countries and then plan to have a trade surplus it won’t work. All those former trading partners simply made their own goods but the productivity gains, however temporary, were so enticing that offshoring continued. I mean if you are going to give the engine of capitalism away without protecting your own country with a social safety net and a measure of self sufficiency you are going to bring the whole thing down. And add to this the balancing of Clinton’s budget. What is Keynesian about any of this?
It’s clear Yellen hasn’t a clue. Neither she nor her male cohorts have the empathy or social intelligence to understand someone like Warren. They know nothing of fairness. It has always seemed to me that their belief system/ideology/economic ideas stem from their own psychology and has nothing to do with reality, other than their own, that is.
“In other words, readers are supposed to take Yellen’s claims at face value, when the Fed’s policy of saving banks by goosing asset prices and convincing itself that ordinary people would benefit because the “wealth effect” would lead to more consumption. The result has been widening income and wealth disparity and corporate profits at record levels as a percent of GDP, meaning workers are getting less than they’ve ever gotten. Yellen as the head of one of the regional Federal Reserve Banks and member of the FOMC can’t escape from responsibility for these policies.”
Wonderful, Wonderful, Wonderful (did I say wonderful???) in-depth article – I learn so much by reading NC. Our press has really lost the intellect, historical background, and intelligence to ask probing, insightful questions. Entertainment Tonite does a better job.
Boy does she remind me of Dipshit Geithner with her obfuscation and feigned ignorance of the question/law. The colossus in the room to me is:
Given that virtually every branch of gov’t is captured by these monied entities and here we see one head regulator not only failing to enforce the law but actively avoiding it and assisting the violator. Now it would be one thing if it was quiet and small potatoes, but its huge and here she is trying to bullshit in a Congressional hearing. So how can we as taxpayers possibly hope that:
1: These entities will ever be actually regulated at all,
2: That the next financial failure will not result in massive handouts,
3: That a pathetically weak republic, whose political parties are entirely dependent upon these same monied entities will do anything to damage their power or expansion of it?
I just do not see this bi-party governmental structure capable of doing anything to control this type of behavior. Let’s not deceive ourselves, even Joe Six-pack knows this is the case and knows that voting is a wasted gesture as manifested by the incredibly low voter turnout.
What really would?
X
Thank you NC for being an oasis of clarity and sanity! Granny really is a BS’ing big bad wolf.
The bribing of the banksters to keep rates low to mainly benefit the 1% continues unabated. All under the guise of “creating jobs” that never appear.
She was such as sweet little thing back in the day.
https://www.flickr.com/photos/expd/11513391405/in/set-72157638951452973
Owning Your Time, Currency Veils, & Say’s Law
Most accept the status quo of expedient peer pressure automation. Others fight its gravity, and some move forward to work in the future. Few are quite so stupid as to live in a single dimension. That is the circuit you recycle, to build your own.
If the future were calculable, there would be no future, which is why the empire plan for the future has no future, except war with the past, and why life is what you make of it. Leaved the futureless surrounding you behind to die in their own poison. In a game of last to lose, you want to lose first.
The trick to space travel is not to travel, but to be, a part of the gate, leaving your intellect and your body to travel, with another doing the same. Just because the empire eliminates time for natural relationships, with busy-work activity, doesn’t mean that artificial relationships, civil contract marriage, is the answer.
America is just the latest empire, prostituting its natural resources to subsidize previous empires, monetizing artificial demand for artificial supply, of dead real estate inventory, and its energy derivatives, humanity’s oldest profession, politics. Of course the peer pressure crowd cannot allow you to step out of the MAD credit clock.
The bank merely sets empire time with credit, interlocking the peer pressure networks to feed the FILO bankruptcy queue. Public education feeds the flow back into public housing, normalizing the arbitrary outcomes. That’s why jobs are connected to peer pressure to credit, which is connected to drugs.
Manufactured food in a manufactured environment, bred by an upper middle class on drugs, inflating assets with debt, on debt as income, feeding the entitlement ponzi with impoverished children imported for the purpose, to the end of legacy energy exploitation, is not the future. And the demographic stupidity is once again locked on course, globally.
The proprietary programmers directly and indirectly incorporated more of the global population in the hunt to exploit labor, distributing debt wider and deeper, but labor moved further ahead, while the corporations wasted time printing reserves. With dead possessions in one hand, they now try to work with the other.
And no matter how many automatons – humans, drones and robots, or how many times they attempt to solve an accounting problem with accounting, the best they can do is get further behind. Humanity is not here to print more derivative forms of gravity, for which planetary variability is the problemsolution.
Mortgaging the family farm to work in the empire factory, with bank issuing debt on the expectation of per pressure education to liquidate the participants, has been going on for centuries, leaving the participants always at war, over artificial scarcity, created by plumbing, production against consumption, divide and conquer.
Money, the draw on wealth, either to consume the past or invest in the future, is quite simple. Debt as money, drawing on future wealth, is only complex because the issuer doesn’t want you to realize that the choice eliminates investment, until you are bankrupt, trading recurring family wealth for non-recurring consumption.
First you prepare for Monday on Friday, and then two Mondays hence, and then three, which requires probability analysis, and the most important thing you learn is that the majority is always going in the opposite direction, which has many applications, and why a gravitron is always a component in the system.
The empire traps the majority in time with debt, enslaving the body, which enslaves the intellect, which enslaves the spirit, effectively eliminating the future as a choice, replacing it with false choices, entitlement promises. With experience, that which comforts the majority, group security, warns the thinking individual.
Once you invest in production, you se a world of opportunities, instead of threats. If you enter a middle class event horizon, recognize threats as others do, until you don’t, when you exit, leaving them behind. You complete the circuit randomly, unobserved, because the empire has already occupied the direct path, mimicking mobility.
Empire mobility, a rigged lottery, exchanging status for family wealth, replaces natural interest by adding horizons from the bottom, with so-impoverished children chasing the example, hiding the lost purchasing power with inflation. With relative mobility pricing on a curve of diminishing return, stupid replaces wealth with debt, as the rising tide.
Debt as money is a problemsolution, subject to the laws of gravity, a closed system. All theories are arbitrary, with arbitrary outcomes. Some learn, but most do not, which is why debt is ineffective. It is the weak that herds up to attack the helpless, offering assistance, trapping itself in time, always with another theory, expecting a different outcome.
Empire money isn’t being systematically discounted away by accident, and hiding its operation within SMART chips isn’t helping the issuers. Dinosaurs come and go, all on the assumption that an irrational market can outlast all intelligent investors. What remains is talent.
It doesn’t take a Ph.D. in rocket science to look at the data and see that the assumption is false, for those with the physical and mental stamina to employ the gravity of stupidity, as a counterweight, not to expect equality and self-destruct upon inequality, the positive feedback loop of tyranny, entitlement bait and swap.
Debt as money is an empire façade, ostensibly to simplify decisions, with increasing obscurity. As Say provided, money is perishable relative to the stupidity of natural resource exploitation, in favor of FILO bankruptcy protection, as purchasing power and the history of money clearly demonstrates, regardless of peg.
Discount, by measuring in time rather than money, to time the empire out of your life. You might think that the ivory tower physicists would be more intelligent than to pay themselves in other people’s debt, but you would be wrong. Artificial borders do not change the natural interest rate, but they do create jobs, breaking and fixing windows.
TBTF depends entirely upon parents choosing to mortgage away their children’s lives, a majority of, by and for peer pressure extortion, and children stupid enough to accept the contract. Bring on the next wizard, with a theory and a bully pulpit, built on ‘higher’ education.
You are the economy; the magician and the crowd are just a side-show. Recognize the future and everything else will take care of itself. Labor has much better things to do than build cities on sand, for the Bank of England or anyone else.
TBTF can have Carney, and a million more just like him, along with all of their followers, on this side of the Atlantic. It is labor, not the global city, which has the last, and first, word on the matter of bank value. Careful, with whom you presume to wage war, employing Family Law as a weapon.
Last time, people walked away from their mortgages. Now, the automatons are dying away, in a demographic collapse. Good luck, procreating robots with google glasses to pay the empire mortgage, on ignorance. And you were expecting…?
Showtime
Things are getting weirder & wierder by the day. It’s almost like reality itself is thinning out and becoming a cartoon where nothing has meaning beyond transitory spectacles and you see right through it the way you see through a window to a vast emptiness beyond. Then you wonder, does everybody see this? Or is it just us? It’s a lot of people, I’m pretty sure of that. That’s why it feels weird because you can feel the fevered attachment to the spectacle as a kind of addiction, a tether to prevent the headlong pitch through the window into the emptiness. Nobody wants that on purpose. I mean really.
Then you see there are some people who are perfectly possessed by their addiction, because the addiction is complete and total, womblike and nurturing, occupying not just the body but the mind and the soul. You can say they live inside it, but that would presuppose something that isn’t true, that there is a separation between self and addiction, when in fact, the self becomes the addiction and one cannot spacially decompose a single thing into a hierarchy . And then you look at it that thing and you see something that seems translucent and thin, almost like a cartoon, and you think “That’s weird. It doesn’t even have enough presence and weight to be real. It just floats there like something you remember in your mind while you’re looking across a street but not something fully alive in front of you.”
That’s what it feels like when I look at somebody like Chairman Yellen. It doesn’t seem real to me. I don’t know. It may be she’s not really the Fed Chairperson at all. She’s just an actress in a cartoon and the logic she uses was concocted by some writer who just made it up for reasons that are hard to describe. It seems like that to me anyway. Who would believe this stuff if it was in front of them? Very few people I think. But when you read about it or see it on a TV it seems natural, because that’s like looking through a window into some reality that you know somebody made up and fabricated, and that you watch just to pass the time and avoid falling through into a vast emptiness.
Star Trek; the episode where the computer is in charge…
kevinearick, nice stream of conscience writing there, ala the sixties. But what concrete issue are you talking about?
Whoa, many times! What self-rightious, self-serving, rapacious tribe does that bank sponsored quisling belong to?
That is not an acceptably PC question…..grin
Next you are going to start asking questions about ongoing inheritance and accumulating private ownership of property. You know, those things that fig leaf economists don’t include in their myths about how the world works.
I am afraid the only way out is to kill the bankers.
Why, sir, do you give the lawyers a free pass?
Have you ever asked yourself who hires and fires the bankers?
Maybe some of your ire should be directed at the folks behind the curtain.
Ilargi: “Janet Yellen is a religious nutcase. She may not appear like one at first glance, but take a look at her picture again and you may find that instead that’s exactly what she looks like. She may have that nice little grandma façade, but then those are often the worst cases. I realize this is not a nice thing to say, but there are limits to what even nice little grandmas can say and do, especially when they run a central bank where an embroidery class would seem like a much better fit…..”
http://www.theautomaticearth.com/debt-rattle-jul-15-2014-janet-yellen-is-a-religious-nutcase/
“Economics is a subject that really relates to core aspects of human well-being.” Replace “well-being” with “power and control” and you have an accurate statement.
“John Maynard Keynes (1883-1946) correctly argued that the severity of the Great Depression was due to under-consumption or over-saving. What Keynes failed to note was that the under-consumption of the 1930s was due to over-spending in the second half of the 1920s. In other words, once circumstances have allowed the under-saving event to occur, the net result will be a long period of economic under-performance.”
Yes, over-spending (gee, that’s familiar, isn’t it) in the Roaring Twenties, just like over-spending pre (sub-prime loans) and post-crisis (education and cars).
That’s the cycle, isn’t it? The Fed (with government complicity) comes in and lowers interest rates, regulations are relaxed, people go nuts, and the Fed looks the other way and pretends it sees nothing. Too much money starts chasing goods, and prices escalate. Risk is nowhere to be found.
It’s the looking-the-other-way that causes the problems; that, and deregulation. But you don’t get velocity and big profits and skims by having people “save” first. It’s much better to lower standards, lower interest rates, create more debt, and party on! (sarc)
“Thus, in aggregate, the U.S., Japan and Europe are all trying to solve an under-saving problem by creating more under-saving. History indicates this is not a viable path to recovery.”
http://www.valuewalk.com/2014/07/hoisington-investment-management-2/2/
Of course, Yellen knows all of this. Just another banker puppet (as is Congress/Senate/Presidents past and current).
If you don’t let things get out of hand in the first place, you don’t have a problem. Everyone just wants to paper over their debts (it’s easier to say, “It wasn’t my fault,” blah, blah, blah). Bullshite.
After seeing this testimony. I’m loath to say this in this way, but she’s Big Finance’s whore (which is an insult to the legitimate whores.)
She couldn’t charge two shits per trick, much less $200.
This article (see below) has changed my life and applies here.
The current method of all in power is to say the right thing, then do the wrong thing.
Older viewers would call this phenomenon: “politicians are liars”.
http://www.salon.com/2014/06/22/pope_franciss_liberal_reformer_image_is_all_smoke_and_mirrors_partner/
I’ve just finished reading Lemann’s 8700-word profile of Janet Yellen and think it is AWESOME. It demonstrates (once again) why Lemann is one of our country’s greatest public intellectuals. He is — and has been for 15+ years — the best journalist working. Period.
I’ve been reading Grant’s Interest Rate Observer for 30 years, so I’m quite familiar with Fed bashing.
But I’ve been reading (and collecting) Lemann’s writing for 25 years (I’ve got 186 essays by him, edited/highlighted, digitized)––and this profile of Janet Yellen ranks right up there among his best.
I suggest you reread it. Not only is Lemann’s writing very funny (like Jim Grant’s), but he nails his targets in a very subtle manner. It is a GREAT piece of reportage.
http://www.newyorker.com/magazine/2014/07/21/the-hand-on-the-lever