Motley Moose – Archive

Reuters: Obama picks Yellen for top Fed job, urges quick Senate approval

President Barack Obama nominated Federal Reserve Vice Chair Janet Yellen on Wednesday to run the world’s most influential central bank and urged the Senate to confirm her without delay.

Yellen, an advocate for aggressive action to stimulate U.S. economic growth through low interest rates and large-scale bond purchases, would replace Fed Chairman Ben Bernanke, whose second term ends on January 31.

The nomination will put Yellen on course to be the first woman to lead the institution and the first to head a central bank in any Group of Seven industrial nation.

At last some progressives are awakening to the political reality of our economic condition:

Nothing in this year’s exit polling hurt more than this:

Got that? Of the 35 percent who think Wall Street is to blame for our economic problems, 57 percent voted Republican – the party that does nothing but carry water for Wall Street.

Kos – Get Wall Street out of the White House Daily Kos 18 Nov 10

Yeah.  But what makes Democrats so different?  Well…  Not much, it seems:

…people think there is no difference between the parties when it comes to the rich and powerful.  And why should they?  Obama’s finance team is essentially a branch office of Goldman Sachs and company.

Kos – Get Wall Street out of the White House Daily Kos 18 Nov 10

Time to get serious, folks.  And big decision time for Obama.  I think Kos has got this right:

Here’s the bottom line – Obama and the Democrats need to repair their relationship with voters.  They can either focus on that, and the hell with Wall Street’s hurt feefees, or we’re headed for a Republican trifecta in the White House, Senate, and House in 2012.

Kos – Get Wall Street out of the White House Daily Kos 18 Nov 10

The next president will be the one who has convinced a nation of confused and angry voters that he or she is going to lead an administration which will put a stop to this nonsense, and let the chips fall where they may.

It would have probably been fair to say of Sarah Palin that until a few days ago ‘policy wonk’ would have been an unlikely description, love her or loathe her, of any facet of her complex relationship with American politics.

But now this:

I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities.  The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds.  And where, you may ask, are we getting the money to pay for all this?  We’re printing it out of thin air.

Sarah Palin via Robert Costa- Palin to Bernanke: ‘Cease and Desist’ National Review 7 Nov 10

That’s very interesting on a lot of levels.  The piece is coherent and sober and, more importantly, it is aimed directly at a weak point in the current administration’s monetary policy and an electoral vulnerability in the allegiances of establishment Republicans in the newly constituted House of Representatives.  Federal Reserve Chairman Ben Bernanke, the champion of this recently announced second round of ‘quantitative easing,’ promised Congress on 3 June 2009 that the Federal Reserve would not ‘monetise the debt‘ of the US government, in other words just print money “out of thin air.”  But that seems to be exactly what we are now proposing to do and there are dissenting opinions within the Federal Reserve system itself:

For the next eight months, the nation’s central bank will be monetizing the federal debt.

This is risky business. We know that history is littered with the economic carcasses of nations that incorporated this as a regular central bank practice.  So how can the [‘quantitative easing’] decision made last Wednesday be justified?

Richard W Fischer – Recent Decisions of the Federal Open Market Committee: A Bridge to Fiscal Sanity? Federal Reserve of Dallas 8 Nov 10

So which is it?  Well, that all depends on whose telling the story.  But it’s already a done deal.