Ben Bernanke

Congress Ignores Obvious Policy Solution To Major Economic Threat

Brian Beutler | May 24, 2012, 5:12AM

If Congress passed legislation to fund the federal government for a year, then scattered to the four winds, the United States would find itself in recession sometime in 2013.

That's what the non-partisan Congressional Budget Office concluded in a Tuesday report, meant to alert elected officials to the dangers of allowing the country to fall off the "fiscal cliff." That's shorthand for allowing all of the Bush tax cuts and the payroll tax holiday, extended unemployment benefits, and Medicare physician reimbursement rates to expire; and to allow spending on domestic and defense programs to be cut indiscriminately. All of these things will happen automatically at the beginning of the year if Congress does nothing.

Budget deficits would fall dramatically, but at the expense of hundreds of thousands or millions of jobs at a time when the country's current economic maladies are just beginning to heal. By contrast, protecting the recovery likely means large budget deficits will persist for quite some time.

If there were an obvious way around this conundrum you'd think Congress would've taken it. In reality, according to policy experts and economists of a wide range of ideological leanings there is an obvious way around this conundrum -- and yet Congress isn't taking it.

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Unemployment

CHART OF THE DAY: Long Term Unemployment Is A Huge Problem -- Especially If You're Old

Brian Beutler | November 3, 2011, 10:32AM

ildogesto/ Shutterstock

The economy is showing modest signs of improvement, but probably not enough to help the people who've taken the biggest hit: the long-term unemployed.

The number of people who've been out of work for over a year has skyrocketed since the financial crisis and ensuing recession to the point where Fed Chairman Ben Bernanke has called it a "national crisis" -- employers are reluctant to hire people who haven't been on the job in months, and after such long stretches peoples' skills deteriorate and they become genuinely less marketable.

How bad is it? Extremely bad -- and even worse if you're old.

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Stimulus

Goldman Sachs To Federal Reserve: Boost The Economy Already

Brian Beutler | October 17, 2011, 2:50PM

Economists and monetary policy wonks have been screaming about this for months -- sometimes at each other. Now economists at investment giant Goldman Sachs are on board. In a proprietary analysis for clients, Goldman economists Jan Hatzius and Sven Jari Stehn say the Federal Reserve should announce publicly that it will pursue a bit of inflation, and make good on that goal with looser monetary policy -- a new round of so-called "Quantitative Easing."

From the analysis: "[W]e believe that the Fed's most promising option for delivering significant further policy easing would be a shift to a nominal GDP level target coupled with large-scale asset purchases.

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Ben Bernanke

Congressional Dysfunction Begins To Spook Old Pros

Brian Beutler | October 10, 2011, 5:05AM

U.S. Capitol building

Congress has always been Washington's whipping boy, particularly near election time. The antics get sillier, the pace shifts from glacial to gridlock, and the frustrated public gets daily reminders that lawmakers are often too mired in politics to function in the national interest.

That's not news.

What is news is that this time it's starting to scare the pros.

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Federal Reserve

House Republicans Join Fed-Bashing Counterparts On Campaign Trail

Brian Beutler | September 22, 2011, 6:20AM

Rep. Jeb Hensarling (R-TX)

Politicians hectoring the Federal Reserve is nothing new. Members of both parties have done it based on disagreements over myriad financial and economic issue over the years. In that way Tuesday's letter from GOP leadership to Fed Chairman Ben Bernanke, warning him against pursuing more monetary stimulus, was part of a storied American tradition.

In other ways it was extraordinary. This came from leaders speaking for an entire party, and more-than-plausibly represents an effort to prevent the Fed from improving the economy for political reasons.

In the end, the effort proved ineffective -- the Fed announced a new round of monetary stimulus as expected. But it exposed a widening rift between the GOP and the Fed, which until now had been limited to posturing GOP primary candidates and fringe members of the GOP caucus.

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Ben Bernanke

Federal Reserve To GOP: Take A Hike!

Brian Beutler | September 21, 2011, 2:40PM

Federal Reserve Chairman Ben Bernanke

Responding to the bleak economic outlook, and the weak prospects for reduced unemployment in the months ahead, the Federal Reserve has announced a new round of monetary stimulus, disregarding a Republican political push to dissuade them from tinkering with the economy.

In a new iteration of Quantitative Easing -- that Fed watchers are calling "Operation Twist" -- the Federal Reserve will swap $400 billion worth of medium term bonds for longer term bonds over the next nine months,to drive down long-term interest rates to encourage immediate investment. Separately, it will take steps to drive down mortgage interest rates.

It's the first significant action the Fed has taken to juice the economy since a modest second round of monetary stimulus ended several months ago. However, the Fed says it continues to expect unemployment to drop slowly and for inflation to remain below the target rate -- meaning it isn't attempting to spur immediate spending and investment by raising the expectation that prices will soon rise. Though the hope is that the new easing will accomplish that on its own.

Politically, the action is sure to rankle Republicans, both in the presidential primary, where chairman Ben Bernanke has become a whipping boy, and on Capitol Hill, where leaders have more cautiously criticized Fed policy.

Read the full Fed statement below the fold.

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Ben Bernanke

GOP Leaders To Bernanke: Don't Try And Improve The Economy Again

Brian Beutler | September 21, 2011, 8:59AM

House Speaker John Boehner (R-OH) with Senate Minority Leader Mitch McConnell (R-KY)

House and Senate GOP leadership are taking fire from all sides for publicly pressuring Federal Reserve chairman Ben Bernanke not to further loosen monetary policy, even if he thinks it will help the economy.

In a Tuesday letter to Bernanke, leaked to the press, Sens. Mitch McConnell (R-KY) and Jon Kyl (R-AZ), and House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA), ostentatiously cautioned Bernanke against providing the economy any further monetary stimulus.

"[W]e submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people," the Republicans write.

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Ben Bernanke

Bernanke Slams Congress For Harming Economy With Debt Limit Brinkmanship

Brian Beutler | August 26, 2011, 10:48AM

Federal Reserve Chairman Ben Bernanke

In a speech that sent stock prices tumbling, Fed Chairman Ben Bernanke announced the central bank will not take bold new steps to stimulate the economy -- at least not yet. But he also ripped Congress for failing to do its part to combat unemployment with fiscal policy, and blamed brinkmanship over the debt limit for exacerbating the situation.

"Bouts of sharp volatility and risk aversion in markets have recently re-emerged in reaction to concerns about both European sovereign debts and developments related to the U.S. fiscal situation, including the recent downgrade of the U.S. long-term credit rating by one of the major rating agencies and the controversy concerning the raising of the U.S. federal debt ceiling," Bernanke said at an annual Fed symposium in Jackson Hole, Wyoming. "The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses."

Don't do that again, he's warning. Except that top Republicans now say taking the debt ceiling hostage will be the new normal.

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Rick Perry

Well, If You Insist: Rick Perry Takes The Bait, Runs Against Washington

Evan McMorris-Santoro | August 20, 2011, 3:26PM

Texas Governor and Presidential Candidate Rick Perry (R)

ROCK HILL, SC -- Texas Gov. Rick Perry responded to his Washington critics here Saturday in a way that could make you wonder if those critics are actually playing for Team Perry.

On Friday, Politico reported on the concerns of some Republicans in Congress that Perry's Texas-style rhetoric on the presidential campaign trail is perhaps a little too Texas.

Speaking to reporters today, Perry responded by essentially saying he doesn't give a rip about what those Washington fat cats have to say about him. It was a move so slick that Perry could have scripted it.

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Rick Perry

Former Reagan Official: 'Rick Perry's An Idiot'

Brian Beutler | August 19, 2011, 10:00AM

Ronald Reagan's chief domestic policy adviser took Texas governor Rick Perry to the woodshed Friday for recent controversial statements -- in particular about his suggestion that Fed Chairman Ben Bernanke would be committing treason by printing money to boost economic growth.

"Rick Perry's an idiot, and I don't think anyone would disagree with that," Bruce Bartlett said on CNN's American Morning.

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Rick Perry

Ron Paul: Rick Perry 'Makes Me Look Like A Moderate'

Benjy Sarlin | August 18, 2011, 10:44AM

Ron Paul

Rick Perry's intimidating talk on Ben Bernanke may be too much even for Ron Paul, the patron saint of the anti-Fed GOP movement.

Paul mocked Perry's recent statement that Bernanke's polices may be "almost treasonous" on the campaign trail in New Hampshire Wednesday, referring to him only as "this other governor" and claiming he forgot his name.

"He realizes that talking about the Fed is good, too," Paul said, according to the LA Times. "But I'll tell you what, he makes me look like a moderate. I have never once said that Bernanke has committed treason."

Then the punchline: "But I have suggested very strongly that the Federal Reserve system and all the members have been counterfeiters for a long time."

Rick Perry

Rick Perry Cowboys His Response To Obama (VIDEO)

Evan McMorris-Santoro | August 17, 2011, 11:31AM

Gov. Rick Perry (R-TX)

Tuesday afternoon, President Obama sardonically "cut" Texas Gov. Rick Perry (R) "some slack" after Perry's incendiary remarks about Federal Reserve chair Ben Bernanke and the military's respect for its current commander-in-chief.

On Wednesday, Perry responded with the kind of Texas swagger his supporters love, his critics hate and everyone should get used to hearing a lot more of as Perry's presidential campaign unfolds.

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Rick Perry

Rick Perry's RGA Replacement Says The Bernanke Quote Was A Bad Move

Evan McMorris-Santoro | August 17, 2011, 9:58AM

Virginia Gov. Bob McDonnell (R)

Add Virginia Gov. Bob McDonnell to the list of Republicans raising an eyebrow at Texas Gov. Rick Perry's (R) recent "almost treasonous" line about Federal Reserve Chair Ben Bernanke.

"Governor perry is a tough guy but a compassionate guy," McDonnell, who just took over as chair of the Republican Governors Association after Perry left to run for president, told MSNBC this morning. "I thought the remarks probably were something that could have been said differently."

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2012

W's Revenge: Ex-Bushies Gang Up On Rick Perry

Benjy Sarlin | August 16, 2011, 4:23PM

Karl Rove

Rick Perry is facing a full-on assault from former Bush aides over his comments on Fed Chair Ben Bernanke, pushing a long-rumored rivalry between the two ex-governors' camps out into the open.

Acknowledging to TPM that "there is no love lost between the W camp and the Perry camp," one Bush veteran appealed for detente.

"I do not think it serves any purpose for any Bushy to fuel to fire or resentment," the person said. "The goal for us should be to defeat Obama not defeat ourselves.

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Rick Perry

Awkward Allies? White House Agrees With Karl Rove About Perry's "Treason" Comments

Thomas Lane | August 16, 2011, 3:29PM

White House Press Secretary Jay Carney

It's not often you see President Obama's spokesman, Jay Carney, agreeing wholeheartedly with Karl Rove. However, they're both singing from the same song-sheet when it comes to Rick Perry's recent remarks on Ben Bernanke.

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2012

Rick Perry Stands By 'Passionate' Rant Against 'Almost Treasonous' Bernanke

Benjy Sarlin | August 16, 2011, 11:03AM

Rick Perry

Rick Perry is standing by his remarks about Fed Chair Ben Bernanke's "ugly" reception in Texas should he enact "treasonous" expansionary monetary policies before the election.

"He is passionate about getting federal finances under control," Perry spokesman Ray Sullivan told the New York Times in an interview. "They shouldn't print more money, they should cut spending and move much more rapidly to a balanced budget."

Perry has come under fire, even from some fellow Republicans, for his intimidating talk against Bernanke.

"I know there's a lot of talk and what have you about if this guy prints more money between now and the election," Perry said in Iowa on Monday. "I don't know what y'all would do to him in Iowa, but we would treat him pretty ugly down in Texas." He added that it would be "almost treasonous" to print money ahead of the 2012 election to help boost the recovery.

But as his spokesman's affirmation suggests, there is political upside as well: a fight over the Fed could be difficult territory for the more Wall Street friendly Mitt Romney.

Mitt Romney

Perry's Fed Fight Dangerous Territory For Romney

Benjy Sarlin | August 16, 2011, 10:23AM

Mitt Romney

Rick Perry's tough words for Ben Bernanke Monday weren't just idle talk. By going after the Federal Reserve, he immediately brings to the forefront one of the few major policy distinctions between him and Mitt Romney.

A successful investor who is well-versed in monetary policy, Romney has been extremely wary about joining in on the Republican party's populist revolt against the Federal Reserve over the last two years. Perry, by contrast, is clearly all too happy to ride the anti-Fed tide, perhaps making a play for some of the Bernanke haters more naturally drawn to Ron Paul.

As recently as April of this year, well after Tea Partiers had taken to vilifying Bernanke as the face of the 2008 bailout, Romney defended the Fed Chair in an interview with CNBC's Larry Kudlow after being repeatedly pressed to criticize him for "depreciating the dollar."

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Barack Obama

Rick Perry Thinks 'Printing More Money' Is 'Almost Treason' Because It Would Help The Economy And Thus Obama

Brian Beutler | August 16, 2011, 9:51AM

Gov. Rick Perry (R-TX)

Texas governor, and freshly minted GOP presidential candidate Rick Perry will have to explain what he meant when he said "we would treat [Fed chairman Ben Bernanke] pretty ugly down in Texas" if he prints money -- or, more charitably, printing more money than usual. Likewise, he'll have to explain why he thinks printing money -- or prints more money than usual -- would be "almost treasonous," at least as compared to, say, secession.

But what's gone completely unnoticed in the wake of candidate Perry's first big flap is his rationale for opposing a looser Fed policy in this depressed economy: specifically that it would work, boost the economy, and thus make it harder for the GOP to defeat President Obama.

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Federal Reserve

Fed: No Major Action Yet To Improve Sucky Economy

Brian Beutler | August 9, 2011, 2:48PM

Federal Reserve Chairman Ben Bernanke

Between a stalled recovery in the United States, a major debt crisis in Europe, fallout from the earthquake in Japan, a recent fuel price spike, and gridlock in Washington where legislators have reached consensus in favor of austerity measures, speculation had climbed over the last several days that the Federal Reserve would intervene by buying up a significant amount of assets, injecting money into the economy -- a new round of so-called "Quantitative Easing".

But in a statement after a regular meeting of the Fed's Open Market Committee, the central bank decided to continue its current policies, with the caveat that they might start loosening those policies if things don't improve quickly.

Here's their assessment of the weak state of the economic recovery. "[E]conomic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity."

But though unemployment remains significantly higher than the Fed's employment mandate requires, they're not really ready to intervene in a major way just yet. "The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate."

Full statement below:

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Spending

Republicans Struggle To Square Spending Cuts With Job Losses

Brian Beutler | March 9, 2011, 8:59AM

Mitch McConnell (R-KY), John Boehner (R-OH), and Eric Cantor (R-VA)

It's hard to pin them down on it, but Republicans have a hard time squaring the fact that their spending cut plans will cost jobs with their broader message that President Obama's stimulus plan harmed the economy.

At his weekly Capitol briefing with reporters Tuesday, Senate Minority Leader Mitch McConnell stumbled into this contradiction.

"I can't guarantee that somebody's job might [not] be affected by reducing government spending," McConnell acknowledged.

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Stimulus

Republicans Try To Roll Back Fed's Job Creation Mandate

Brian Beutler | November 17, 2010, 9:45AM

Sen. Bob Corker (R-TN)

A growing number of Republicans want to tie the hands of the Federal Reserve, choking off perhaps the last best hope for a speedier economic recovery.

In a sluggish economy like this one, policy makers have a handful of powerful tools at their disposal. The most conventional tool -- fiscal stimulus -- is politically out of reach. Republicans, led by Senate Minority Leader Mitch McConnell, have vowed to block any more deficit spending bills aimed at injecting demand into the economy.

"[W]e will loudly oppose future stimulus bills that only stimulate the deficit," McConnell said at a recent Heritage Foundation speech.

That leaves monetary stimulus. Under its mandate to promote full employment, the Fed is supposed to use tools at its disposal to spur economic growth. Republicans want to stop that too.

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Fiscal responsibility

Debt Commission Leaders: Everything -- Even New Health Care Law -- On Table For Cuts

Christina Bellantoni | April 26, 2010, 10:48AM

President Obama meets with the leaders of his bipartisan debt commission, Democrat Erskine Bowles, on left, and former Republican Sen. Alan Simpson, on right.

When President Obama's Debt Commission holds its first meeting Tuesday at 10 a.m. they will consider nothing too sacred to be examined for cuts -- even the new health care reform law, the leaders said.

Former Clinton White House chief of staff Erskine Bowles (D) and former Sen. Alan Simpson (R) said on "Fox News Sunday" they can't be limited if Obama really wants to make the tough choices to cut the deficit significantly.

Simpson said the commission will use "only" Congressional Budget Office figures and not use their own projections to estimate the future cost of Social Security and health care.

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Alan Grayson

Grayson Calls Lobbyist 'K Street Whore'

Eric Kleefeld | October 27, 2009, 9:49AM

Rep. Alan Grayson (D-FL)

Rep. Alan Grayson (D-FL) -- the man best known for saying that the Republican health care plan is for Americans who get to "die quickly," and for calling former Vice President Dick Cheney a vampire with blood dripping from his teeth -- may have gone a bit too far in one of his latest rhetorical excesses, calling lobbyist Linda Robertson, who used to advise Federal Reserve Chairman Ben Bernanke, a "K Street whore."

The comments were made a month ago, when Grayson appeared on the radio show of right-wing talker Alex Jones, and was just discovered and circulated by the NRCC. "Here I am, the only Member of Congress who actually worked as an economist. And she's, this lobbyist, this K Street whore, is trying to teach me about economics," said Grayson.

Grayson spokesman Todd Jurkowski stood by the Congressman's comments, telling the Orlando Sentinel in an e-mail: "She attacked the Congressman and his efforts to promote a Republican bill to audit the Federal Reserve. She actually questioned his understanding of the difference between fiscal and monetary policy. This is [a] person who used to be the chief lobbyist for Enron attacking the intelligence and motives of a Congressman who used to be an economist."

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