COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Friday, November 12, 2010

Brernanke's Nightmare, Ron Paul, Chairman

Bernanke's worst nightmare: Ron Paul


By Chris Isidore, senior writer

CNBC Ron Paul grills Bernanke, traders cheering 2008.02.27


CNBC Ron Paul grills Bernanke, traders cheering 2008.02.27

NEW YORK (CNNMoney.com) -- Ben Bernanke has had his hands full since his first day on the job as Federal Reserve chairman nearly five years ago. It's about to get even tougher.

His harshest critic on Capitol Hill, Rep. Ron Paul of Texas, is about to become one of his overseers.

With the Republicans coming to power, Paul, who would like to abolish the Fed and the nation's current monetary system, will become the chairman of the House Subcommittee on Domestic Monetary Policy.

If you've never heard of the committee before, you're not alone. But Paul promises you'll be hearing a lot more from it.

"It's basically been a committee that's dealt with commemorative coins. I'm going to deal with monetary policy," he said.

Paul doesn't think he'll be able to move his proposal to eliminate the Fed, or to allow Americans to use gold instead of paper money as currency. But he said he does intend to use his new position as "a mini-bully pulpit" to criticize Fed policy and call more attention to what he sees as its negative consequences. And he's confident that American voters are ready to delve into those monetary policy questions.

"Five years ago they wouldn't have listened. Now they will," he said. "We've gained a lot of credibility in making the Federal Reserve an issue since the market collapse."

And Paul vows to try again to authorize Congressional audits of the Fed's decisions on the economy, a proposal that passed the House last year but was essentially gutted from the final version of the financial regulatory overhaul legislation.

"It will never be easy; the Fed has a lot of influence," he said of the audit legislation. "But there's a lot of life to it. We got further along than I ever expected."

One way that Paul will bring pressure on Bernanke and his Fed allies is to hold hearings to give greater voice to Fed members -- like Kansas City Fed President Thomas Hoenig -- who disagree with the current monetary policy.

"Just getting someone there willing to discuss their viewpoint and why they might dissent, I think that would be interesting," Paul said.

A Fed spokesman did not respond to a request for comment for this story.

Some economists worry that Paul having that kind of pulpit will hurt the Fed, and diminish its ability to fix an economy that still needs help.

"From Ron Paul's standpoint, the Fed can't do anything right," said Lyle Gramley, a former Fed governor who is now senior economic advisor to the Potomac Research Group. "He can cause the Fed to lose a lot of public support. But it needs public support to do what it needs to do."

While the Fed policymakers will try to resist pressure from Paul, they won't be able to ignore it, said John Silvia, chief economist for Wells Fargo Securities. And he said there's a potential for that pressure to influence Fed policy.

"The Fed has a more balanced, nuanced position on its dual mandate to promote growth and keep prices stable," he said. "Ron Paul probably doesn't."

But other Fed watchers say Bernanke already faces plenty of criticismand doesn't have too much to worry about from Paul having control of an oversight committee.

"I think that Bernanke has been pretty cool under fire up to now. I can't imagine Ron Paul being someone who could shake him up," said Michael Bordo, a professor of economics at Rutgers University.

Paul also rejects the idea that he's Bernanke's greatest concern.

"He probably just thinks I'm a nuisance rather than a nightmare," he said.

And Paul doesn't think he'll be able to reverse Fed policy or force Bernanke to resign, as much as he would like to.

"I think psychologically, Bernanke is incapable of changing his mind," he said. "It's probably unlikely [Bernanke will resign] under today's circumstances. But you don't know what it will be like a year or two from now."

Paul argues the Fed is making a serious mistake by pumping more money into the economy to try to spur more spending and growth. He predicts it will only lead to further declines in value of the dollar, inflation and higher interest rates rather than the lower rates the Fed is shooting for.

Paul thinks that will bring about another economic crisis that will eventually force Bernanke to resign from office.

"That's more likely to happen than for Bernanke to think, 'Well, I guess I made a mistake for 35 years. I've misunderstood the Depression, and I'm going to change my policy.'" To top of page

37 comments:

  1. This video from CNBC where Ron Paul grills Bernanke has traders cheering on 2008.02.27.

    This is more than a hint at what is about to happen.

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  2. i am not sure where it will lead.

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  3. WASHINGTON — The Department of Homeland Security said on Friday it is trying to address concerns of pilots about stepped-up screening at U.S. airports and worries in the travel industry that fliers will limit trips because of more rigorous checks.

    Security officials have defended the measures after foiled plots by al Qaeda in the Arabian Peninsula, which tried to hide bombs in clothing and parcels that made it aboard a U.S. passenger airliner and two cargo planes.
    _____________

    It is not American pilots that are trying to take down our planes, nor American woman. They are Arabs and Muslims.

    ReplyDelete
  4. Deuce

    Please forgive me for interrupting but there was some unfinished business in the comments.

    Viktor

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  5. You go on interrupting as often as you like, well hell, everyone else does. You learned the hard way, as I have, that no one gets much respect at the bar.

    What a great photo. You may enjoy this about Echo and her legacy

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  6. Reading the previous thread, I realized how people evolve through their postings and comments.

    You get a picture as to who they are by their comments, and I do not mean their name, but their persona (Thank you Rome, for Latin).

    Melody, probably the youngest, always maternal (more Latin) has evolved to Melody, the wise.

    We lost a Den Mother and gained a Mother Superior (and yes, more Latin).

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  7. Latin is so important to our culture and the way we think and speak, it surely must have been dropped from the curriculum of most public education.

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  8. Of course:
    Monday, 14 June 2010SHARE
    Primary school pupils should be given lessons in Latin, a think-tank said today.

    The ancient language should be granted the same status as modern languages such as French, German and Spanish, according to a pamphlet produced by Politeia.

    From September next year all primary schools will be required to teach pupils a modern foreign language from the age of seven.

    The pamphlet, by Oxford classicists Professor Christopher Pelling and Dr Llewelyn Morgan, argues that Latin will help youngsters with written and spoken English, maths, and to learn other languages.

    It says: "We want our children to be confident in their ability to speak to British and non-British people, and to feel comfortable in a diverse and evolving world, and at the heart of that aspiration is linguistic sophistication.

    "We want them to be alive to the significance of our country's past, and motivated to study the literature which preserves and celebrates that past. We also want our kids to be taught by a highly qualified and passionate cadre of educators. We want them to fly high. To all of that Latin is the key."

    The document, entitled Latin For Language Learners: Opening Opportunity For Primary Pupils, calls for Education Secretary Michael Gove to allow Latin the same support as modern languages in primary schools.

    It proposes: "If the new Government decides to accept the status quo, i.e. most primary schools are already teaching a foreign language, the Secretary of State should ensure that Latin is given the same status as other foreign language options.

    "This would mean including Latin as a primary foreign language option in statutory measures or non-statutory guidance."

    A spokesman for the Department for Education said: "There is no veto on primary schools teaching Latin, it is for schools to decide whether it should be included in their curriculum.

    "Latin is an important subject and is valuable for supporting pupils' learning of modern languages. It can provide a very useful basis for study across a range of disciplines.

    "It is however not classified in the national curriculum as a modern language as pupils are not able to interact with native Latin speakers or study/visit parts of the world where Latin is spoken as a native language."

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  9. The droits of tenure, the idiots we allow to teach our children.

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  10. I had a couple years of Latin in high school, though I don't think it did me much good.

    Emerson said why are we trying to teach these boys Latin, they are going to speak American just as they like. :)

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  11. Josh Ritter, born in Moscow

    One's persona/mask/social personality is to some extent built up by circumstance, social pressures, expectations of others.

    That's why I always kinda like people who don't give a damn what others think of them. :)

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  12. Josh

    His parents were a couple of psychologists I think.....or was it anthropologists? Worked for the U.

    ReplyDelete
  13. Best article I've seen connected to Bubble Ben:

    Where the Bubbles Are

    The central bank has embarked on its program of “quantitative easing,” a second round of experimental monetary policy in which the Fed buys up assets — like longer-term government bonds — to bring down interest rates, which is supposed to spur lending and borrowing, thus reigniting the economy.

    Nobody knows whether it will work to bring down the intractable rate of unemployment. But it has already worked in one significant way: the speculative juices of the markets are flowing.
    What’s going on? As a Fed official explained it in a recent speech, one supposed benefit of the Fed policy is that it will add to “household wealth by keeping asset prices higher than they otherwise would be.”

    So it’s levitation-by-decree. (haven't we been through this before?
    ...more than once)When the Fed moves, financial assets receive the opposite of collateral damage: universal blessing, deserved or not. Lower rates may or may not help more people find work. But there’s no doubt that the central bank has already helped the Henry Kravises and Lloyd Blankfeins of the world


    It’s commonplace to lament Wall Street’s lack of a historical memory. But there is something different at work. Professional investors have learned the lessons of the financial markets’ serial bubbles and learned them well.

    The lesson is:
    When the next one comes, I’m going to get mine.

    I’ll just get out early this time.

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  14. Think of it, the Representatives of the People cannot audit the National Bank, but can delve deep into YOUR finances ad nauseum.

    Audits without warrants, where the citizen is presumed guilty unless they can prove their innocence.

    Yet the private bankers that control the monetary system of the nation cannot be audited.

    How'd that state of affairs ever come to pass?

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  15. .
    I had a couple years of Latin in high school, though I don't think it did me much good...

    Ridiculous.

    Latin forms the basis for all the Romance languages. I had a couple years of it and it made taking French and Spanish a hell of a lot easier.

    It is part of Western Civilization. As such, it is naturally being dropped along with history and many other liberal art courses.

    Veni. Vidi. Vici.

    Riigghht.

    .

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  16. Oh, yes, now I remember ...
    It was those Progressive Republicans that did the Federal Reserve deal, in the dead of night.

    Right about the time they passed the 16th Amendment passed and the States legislatures were disenfranchised from Federal power politics with the 17th.

    Ahh ... that was real Republican progress for all of US.

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  17. Fere libenter homines id quod volunt credunt, sucker.

    ReplyDelete
  18. .
    Lower rates may or may not help more people find work. But there’s no doubt that the central bank has already helped the Henry Kravises and Lloyd Blankfeins of the world...

    Lower rates?

    Ben's Plan didn't work out too well in that regard yesterday.

    .

    ReplyDelete
  19. Korea: Too Green for Dems

    Obama develops a strange new appreciation for gas-guzzling cars.

    Here’s the punch line: U.S. automakers, their unions, and their allies in government — including most Democrats and Barack Obama — think Korea’s fuel-economy and environmental standards are too high.

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  20. Monetary policy and the National Bank were the driving political issues for the first 150 years of the history of the United States.

    The idea that the Federal Reserve took those issues beyond politics, an imaginative fiction, perpetrated by the power elites created by political incumbency.

    What the Founders most feared, brought to US, by Republicans. Progressives that destroyed the checks and balances upon the Federal government, with the direct election of Senators and the removal of monetary policy from political debate.

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  21. .
    So you did remember a little Latin.

    I use it everytime I walk into a bar.

    "Qua in abyssus est john."

    .

    ReplyDelete
  22. Putting the Fed under an electron microscope is a good idea.

    Give 'em a good long computed tomography.

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  23. "Ben's Plan didn't work out too well in that regard yesterday."

    All of Ben's plans come with an expiration date.

    When rates really take off, everyone will be shocked, shocked, that we are paying more on interest than for social security.

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  24. This comment has been removed by the author.

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  25. Yes, bob, folks generally believe what they want to believe, despite the factual case that may be presented to the contrary.

    Though, on occasion, opinions may be swayed by realities.

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  26. I went fishing with dad on the Veni Vidi Vici off the coast of the Big Island once, boat was run by a bunch of Portuguese, we caught some stuff too. Had a good time. Maui was right across, over there.

    ReplyDelete
  27. Your Latin needs some sprucing up:
    It's
    Portagee!

    ReplyDelete
  28. Portugalia est omnis divisa in partes tres.

    ReplyDelete
  29. It appears that in my absence, I have missed becoming aware of Viktor's apparent misfortune.

    His profile is missing, is there still a way for me to access his blog?

    ReplyDelete
  30. .

    Korea: Too Green for Dems

    Bushwa.


    ...So it seems like Detroit is getting the better of this deal. What’s not to like?

    The writer argues the deal fell through because of tariffs when in fact it fell through because lack of access to the Korean market.

    For decades we put up with Japan's arguments that US companies couldn't sell cars there because they didn't understand the Japanese culture. Again, Bushwa.

    Kia has free and open access to the US market. There is no reciprocity.

    The U.S. International Trade Commission has projected that the Korea FTA will increase the U.S. global trade deficit,[24] while the U.S. think-tank Economic Policy Institute has projected that it will lead to considerable U.S. job losses.[25]

    U.S. financial services firms such as Citigroup have pushed for the Korea FTA. Citigroup’s Laura Lane, corporate co-chair of the U.S.-Korea FTA Business Coalition, stated that “it is the best financial services chapter negotiated in a free trade agreement to date.”[26]...

    “Korean laws make it difficult for foreign companies to outsource and offshore activities. These laws often relate to privacy (private data protection law and real name law). Under the Protection and Use of Credit Information Law and its Presidential Decree, foreign companies operating in Korea are prohibited from transferring any customer data whatsoever out of Korea, even for the purposes of processing data to their own affiliates. In addition, as a result of the revision of the Insurance Business Act in May 2003, it is mandatory for insurance companies to maintain in-house the basic human and non-human resources, including IT systems, necessary for insurance business. These restrictions seriously undermine the government’s goal of making Korea into a financial ‘hub’ by significantly increasing the cost of operating in Korea. These regulations should be modified to permit companies to follow their global operating models for outsourcing and offshoring provided they have existing practices to protect consumer information.”[27]

    Much attention has been focused on automobiles, hitherto a major US grievance and a large component of the bilateral trade deficit: during 2006, only about 4,000 US-manufactured cars (excluding GM's Daewoo subsidiary) were sold in South Korea while sales of cars manufactured by South Korean companies (including cars manufactured in Korean-owned US plants) in the United States exceeded 800,000[4]. South Korean automakers sold 730,863 vehicles in the United States in 2005, while American auto companies sold only 5,795 in South Korea, according to Commerce Department figures[21]




    So the banks like the new trade agreement. Manufacturers? Not so much.

    Tell me what's new here.


    .

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  31. Doug, go to the fourth comment on this thread for Viktor' link.

    ReplyDelete
  32. This comment has been removed by the author.

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  33. the Representatives of the People cannot audit the National Bank

    I used to like Judd Gregg until he came out against the FED audit.

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  34. Non Carborundum illegitimi

    from the Rufi coat of arms

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  35. the removal of monetary policy from political debate

    Kind of like a mercy killing.

    Sucker's bet which would have been worse - Congressional control or control by the elites.

    I'm not sure there is a third way.

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