First, They Destroy The Economy, And Now They Want Our Thanks,

[Joe Economist]

When will Paulson and Bernanke finally go away. 5 years after the Financial Crisis they not only have the gall to claim that they saved the economy, but they act as though they deserve our thanks.

While the experts blame Lehman Brothers for triggering the Financial Crisis, the financial crisis was largely unavoidable. The magnitude of the crisis, on the other hand, was the fault of the government. The government injected uncertainty into the markets with plan that made the government the sole decider in which businesses were saved and which failed.

Risk is to capitalism what Kryptonite is to Superman. The government maximized the risk, and then acts surprised when a credit crisis emerges. The market has only one response to the situation created by the government: horde cash. The Federal Reserve and Treasury actions fostered uncertainty and risk. Now they want to praise themselves for saving us from a storm that they largely created.

Thanks for nothing Hank.

The longer piece is on policymic.

http://www.policymic.com/articles/63641/paulson-and-bernanke-screwed-millennials-and-now-expect-your-graditude

 

[fairsheet]

History proves that Fed Chrm. and Secs. of the Treasury work within the frameworks of the elected presidents they're serving at any particular point in time. Therefore, it may not be especially useful for us to ditect too much of our blame nor ire at them specifically.

A terrific example of this, would be Alan Greenspan. Whne Clinton was president., the public mood and Clinton were all for the idea of eliminating our deficits and running surpluses. So.....Greenspan said that was all good and necessary. Then when Li'l George came along proposing massive taxcuts, Greenspan said that surpluses are bad, bad, bad!...and that we should do whatever it took to eliminate them.

 

[Joe Economist]

History proves that Fed Chrm. and Secs. of the Treasury work within the frameworks of the elected presidents they're serving at any particular point in time. Therefore, it may not be especially useful for us to ditect too much of our blame nor ire at them specifically.

A terrific example of this, would be Alan Greenspan. Whne Clinton was president., the public mood and Clinton were all for the idea of eliminating our deficits and running surpluses. So.....Greenspan said that was all good and necessary. Then when Li'l George came along proposing massive taxcuts, Greenspan said that surpluses are bad, bad, bad!...and that we should do whatever it took to eliminate them.

You are right about the politicialization of these roles. They may have served the President in power, but let's not say that they did the right thing or that they deserve our thanks now.

You are not correct about Bush and surpluses. The projected surplus was gone by the time that GWB took office. The internet bubble had deflated the possible capital gains tax revenue that was largely responsible for the 'surplus' that Clinton claimed. Greenspan was the mouthpiece for Bush, but by the time of the tax cuts we were in a full blown recession and there was no serious talk about surpluses.

 

[fairsheet]

You are right about the politicialization of these roles. They may have served the President in power, but let's not say that they did the right thing or that they deserve our thanks now.

You are not correct about Bush and surpluses. The projected surplus was gone by the time that GWB took office. The internet bubble had deflated the possible capital gains tax revenue that was largely responsible for the 'surplus' that Clinton claimed. Greenspan was the mouthpiece for Bush, but by the time of the tax cuts we were in a full blown recession and there was no serious talk about surpluses.

The "politicization" thing is an inevitable by product of our political system. It does us no good to wish that the people in these positions would act counter to the elected president - for two reasons. First of all - to some extent or another, both of these postions "serve at the behest" of the president. And...and since he IS the elected president, our democracy tends to be behind whatever general framework the president is suggesting.

And no....I'm not wrong as to Greenspan's Bush/opinion as to surpluses. He absolutely DID say - in the context of the '00 election cycle AND Li'l George's proposed taxcuts, that surpluses were bad.

The "thinking" was that the private sector could invest that dough more fruitfully than could the guvmint. Therefore, it would be "bad" to leave that money in public hands. As to whether or not the surpluses still existed come 'o1?..That's a seperate issue.

 

[Joe Economist]

The "politicization" thing is an inevitable by product of our political system. It does us no good to wish that the people in these positions would act counter to the elected president - for two reasons. First of all - to some extent or another, both of these postions "serve at the behest" of the president. And...and since he IS the elected president, our democracy tends to be behind whatever general framework the president is suggesting.

And no....I'm not wrong as to Greenspan's Bush/opinion as to surpluses. He absolutely DID say - in the context of the '00 election cycle AND Li'l George's proposed taxcuts, that surpluses were bad.

The "thinking" was that the private sector could invest that dough more fruitfully than could the guvmint. Therefore, it would be "bad" to leave that money in public hands. As to whether or not the surpluses still existed come 'o1?..That's a seperate issue.

I hope you see the contradiction your comment. On one hand, you are saying that the politics of the job is inevitable, and then you link Greenspan to Bush before he got elected. You are suggesting that Greenspan wasn't politicized by his then boss-Clinton or his possible future boss-Gore.

 

[fairsheet]

I hope you see the contradiction your comment. On one hand, you are saying that the politics of the job is inevitable, and then you link Greenspan to Bush before he got elected. You are suggesting that Greenspan wasn't politicized by his then boss-Clinton or his possible future boss-Gore.

Now...I do see the apparent contradition, and as I'm not up to researching the exact chronology, I'll concede that it is a contradiction. So then...how do YOU explain Greenspan's 180 degree flip-flop?

 

[Joe Economist]

I explain exactly as you have, only later in time. The 180 degree turn occurred the day that the Supreme Court ruled GWB was President.

 

[fairsheet]

I explain exactly as you have, only later in time. The 180 degree turn occurred the day that the Supreme Court ruled GWB was President.

Well, I thank you for that! My problem with Fed/Treasury is that they're supposed to be concerned with inflation AND employment. I think we all got sort of spooked by the runaway inflation we saw in the late 70's. And of course, that inflation DID have to be dealt with. But since then, I think we've latched on to the idea that 0% inflation should be our goal and holy grail, at the cost of everything else.

Funny/sad thing is that IF you happen to be one of those who agrees that the lowest inflation rate possible is "all that", then Bernanke has presided over a lower rate of inflation then any of hiw modern-era predecessors.

 

[Joe Economist]

Well, I thank you for that! My problem with Fed/Treasury is that they're supposed to be concerned with inflation AND employment. I think we all got sort of spooked by the runaway inflation we saw in the late 70's. And of course, that inflation DID have to be dealt with. But since then, I think we've latched on to the idea that 0% inflation should be our goal and holy grail, at the cost of everything else.

Funny/sad thing is that IF you happen to be one of those who agrees that the lowest inflation rate possible is "all that", then Bernanke has presided over a lower rate of inflation then any of hiw modern-era predecessors.

The only thing that these people are concerned about is getting re-elected.

I think we have run-away inflation today. What is masking it from the public view is massive overcapacity developed for an economy fuel boosted on debt. As that overcapacity is taken out of the system, we will see inflation. If you look at things where we don't have excess capacity, Gold, Oil, Food Crops, and Basic Minerals - inflation is in the system.

 

[fairsheet]

The only thing that these people are concerned about is getting re-elected.

I think we have run-away inflation today. What is masking it from the public view is massive overcapacity developed for an economy fuel boosted on debt. As that overcapacity is taken out of the system, we will see inflation. If you look at things where we don't have excess capacity, Gold, Oil, Food Crops, and Basic Minerals - inflation is in the system.

You say these basic goods are inflating, but there's no evidence that they actually are! Leaving gold out of the equation, since it's of no real practical value and focusing on the others, it's inevitable that the prices of these goods will climb as the economy improves. That's how the free market works. Now then...their values may increase by more than a functioning free market might allow - even as again, we've seen no evidence of that yet.

 

[Joe Economist]

I am talking about commodities like corn, wheat, minerals and the like.

"The price of raw materials is seen as the top risk, reflecting the importance of manufacturing to the region, and the rising cost of materials across a range of sectors. It has soared up the risk index ranking from 12th to 1st place in the last two years," the survey noted.

http://articles.economictimes.indiatimes.com/2013-07-11/news/40515162_1_asia-pacific-region-risk-index-business-leaders