Revealing Ben Bernanke

Ben Bernanke's 2nd lecture at GWU: March 22, 2012 ()

http://www.federalreserve.gov/newsevents/lectures/about.htm

1st lecture here: Brief notes on Ben Bernanke's part 1 of 4 lecture to college students, Tuesday, March 20, 2012.

Ben tried to make the case for central-bank independence (for the sake of a more stable economy rather than caving to political pressures). If the Federal Reserve System were the only system worth considering, then this would make more sense. However, there are much better paths for humanity, which paths are not getting a fair hearing or much hearing at all if any.

He then discussed the notion of systemic unemployment as a hedge against inflation. This is one of my pet peeves. Employment and inflation/deflation could be completely uncoupled via United States Notes (USN) pegged exactly to real (non-financial sector) productivity growth measured in real-time via supercomputer(s) that would regulate the supply and velocity of money.

Bernanke also mentions loose fiscal policy as a problem. This too could be done away with completely via my USN plan.

Ben Bernanke also shows some self-deprecation concerning the Fed and economist in general. He admitted, as he did in his first lecture, that the Fed made mistakes. However, his admission concerned systemic unemployment again - that by keeping interest rates low, the US economy could employ more people with runaway inflation.

Ben lauds Paul Volker's inflation-killing, jobs killing high-interest-rate policy. I get the sense that Ben's sees this as the central job of the Fed (provided there is no deflation, which is even worse -- recessionary). Inflation was high, so downward pressures still left it in the positive inflationary zone. A recession at the start of a low inflationary period sends the rate into negative territory much easier and sooner, all other things being equal.

So, he then also lauds the Great Moderation - Alan Greenspan's time at the wheel, at least until the dung hit the fan. Greenspan "fine-tuned" interest rates (while promoting the killer deregulation, which was his undoing).

Ben is now discussing the causes of the current depression (he thinks we aren't even in a recession). It will be interesting to see if he backs up to explain the Fed's hand in the low interest rates that fed into the bubble. I see that he's headed toward blaming securitization of junk mortgages. That's fine, but I see he's stepped over all sorts of deregulatory acts that contributed to the whole nightmare. I've documented those on this blog site. You may also hear all about them in the video I posted just a couple of days ago called "Inside Job." (http://www.realliberalchristianchurch.org/2012/03/27/inside-job-the-causes-of-the-2008-economic-meltdown-greed-and-stupidity-narrated-by-matt-damon-full-length-hd.html)

Now, I'm not an economist (in the typical sense) by profession. What I know about economics comes from mostly independent study and the school of hard knocks and then studying the Bible, especially the Gospels. With that in mind, why was I saying in 2003 that "they are going to wreck the economy" via the terrible real estate practices that were beginning to show up quite clearly then while at the same time, all of the "experts" were as silent as silent can be? Alan Greenspan had called the dot-com bubble the results of irrational exuberance, but during the build-up of the housing bubble, he was mostly silent or even encouraging of it. It didn't make any sense.

What we do know is that investment bankers and commercial bankers (because of deregulation) were making huge fees on mortgage transactions. We know that the toxicity was masked by the securitization process. Alan Greenspan was not unaware of these things at the time. He couldn't have been. Ben Bernanke had to have known too, at least toward the latter part of it, but stayed silent or sided with Greenspan. This is the general criticism of Ben Bernanke, that he didn't speak up and out.

Ben goes on to discuss leverage. He doesn't start by mentioning deregulation. This is becoming a pattern: protective initial couching. He's leading away from the issue of deregulation.

He blames the lack of internal-banking monitoring as an oversight by those banks rather than as a deliberate racket by banksters.

He finally mentions (just barely) CDS's and CDO's. I'm beginning to wonder if the term deregulation will ever come out of his mouth to these students and the others watching and listening.

He's finally mentioning regulation. However, he's started out by saying that the system was the system put into place as the New Deal, which is a very disingenuous thing to say when he knows full well that the New Deal legislation was gutted starting with Reagan. Perhaps he's leading again (misleading) by couching things first one way before mentioning the highly negative things his types have done to the economy.

He's beginning to sound more like one who is pro-oversight.

Now he's being self-deprecating again. He's saying that the Fed didn't press hard enough on the banks to measure their risks. It's a softball. He's saying that many of the banks didn't have the capacity to thoroughly understand the risks that they were taking.

I want to go on public record here (again). I don't believe that at all. I find it very difficult to believe that Ben Bernanke really believes that himself. If he does believe it, he's extremely naive. It just doesn't add up. I get the feeling he's doing more psychological manipulating than anything.

Ben is now defending the Fed against the argument that keeping rates low fed into the housing bubble. I agree that it was not nearly the cause that deregulation was, that crime by lenders was. I don't believe it play only a little role though. It may have played a little role monetarily, but I believe Greenspan was up to more than monetary policy. I believe he was up to as much laissez-faire capitalism as monetary policy could stand in his eyes, which was way too much (obviously) unless one is a bankster still getting huge bonuses for doing nothing more than leaching via outright immoral acts.

In taking the second question from the students, he's talking up regulations, which is a good thing. Why we "forgot" regulations set in place during the New Deal and started ripping them to shreds with Ronald Reagan's disastrous presidency, is the question. How long will Ben Bernanke remember regulations? Why hasn't the Barack Obama administration lauded Franklin D. Roosevelt rather than all the other Presidents Obama has claimed as his heroes? FDR did more in a shorter span of time to rein in the banksters than anyone else in American history, but Barack avoids his name like the plague. The Republicans built up Reagan as a lion. The Democrats, even while FDR is considered by Presidential historians to be at least the second best President in US history, ignore FDR at best. I'm not saying FDR was a saint, but he was more saintly than Ronald Reagan by miles.

He does field the question about Fannie Mae and Freddie Mac fairly well. He quickly pointed out that the worst loans were in the private sector. My view is that the same types in the private sector were going in and out of the revolving doors at Fannie and Freddie and more so the lobbying doors in Washington. The whole system was being taken down by the banksters for fees and consolidation and no fear because of assured bailouts for "too big to fail" banks.

He became a bit short with the last two questioners for going off topic touching upon issue in upcoming lectures. The students were given the information on future lectures. He did have a point. He may be a tough boss at the Fed. If I understood it correctly, the last question though did challenge him a bit about whether low interest rates had as little impact as he argued. It was interesting that Ben gave only one side of that issue really. Usually, a professor (the better ones) would give a bit more of the opposing view for the sake of the student's education. Of course, he's not there as a professor but to promote the Fed. It's empire. The bankers either reinforce the Fed or lose out to the super-regulators. The Libertarians aren't anywhere near getting their way. This is Ron Paul's last hurrah. His son may take a run at it, but unless neoconservatism bites the dust soon, how far can he get?

Before I move on to Ben Bernanke's 3rd lecture, I want to add that Mr. Bernanke has not once mentioned that the method of calculating the unemployment rate changed under Bill Clinton. Ben has been showing unemployment graphs covering before, during, and after Clinton without saying whether those graphs are adjusted to take into account the changes in method. I'm confident that they are not because of the totals he's been citing that are only non-adjusted totals.

Ben said that currently, the unemployment rate is about 8.3% (down from around 10 at the height of this downturn). He compared that favorably to pre-Clinton downturns. However, the current U6 unemployment rate, as calculated by the Bureau of Labor Statistics (BLS), is 14.9% -- a huge difference. (http://www.bls.gov/news.release/empsit.t15.htm.) Some experts believe that 14.9% is low.

U6 means the following:

Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force. [- BLS]

They go on to say:

Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

Pre-Clinton, the U6 was used much more broadly. Comparing the U6 to the U-3 {"Total unemployed, as a percent of the civilian labor force (official unemployment rate)"} is comparing apples and oranges. Ben Bernanke didn't mention any of this even though he's well aware of it. Why not? I think the answer is not because it just slipped his mind but because it doesn't work to substantiate his overall pro-Fed thrust, selective self-deprecating or not.

Ben Bernanke's 3rd lecture at GWU: March 27, 2012 ()

Ben Bernanke says this lecture will be about the Fed's response to the current crisis. He's reiterating that the Fed's chief responsibilities are economic and financial stability. I disagree. Those are their pretexts for existing. What I mean is that the bankers, in response to the various recessions and depressions, realize that if they don't work to keep the Federal Reserve System by building up the idea in the public mind that the Fed knows its chief responsibilities and is learning to become more vigilant and aggressive, that the Fed will lose its power and authority and the real reformists will seize the day. The real responsibility of the Fed is to do as little as possible to regulate while getting away with that and while not being dismantled and replaced.

My position is that the Fed should be nationalized and that banking should be a public utility controlled largely from the bottom up and highly democratically. That's my secular position, as I have a nonsecular position, which is the Christian Commons leading to Heaven on Earth - my goal. "Earth" there is also figurative. It can stand in for existence: manifest reality.

Ben says that the main tool for financial stability is the "lender of last resort" power. He used that by lending to illiquid and often actually insolvent banks, which turned around and speculated further or parked funds at the Fed at a gain to those banks but not helping Main Street much if at all.

Ben further stated that the main tool for economic stability is monetary policy (interest-rate setting and buying and selling bonds) increasing/decreasing the overall supply of funds. Whether those funds will be used to make intelligent loans is another matter.

I'm opposed to usury (any interest charged on any loan; usury does not mean simply high interest).

Now Ben reiterates his statement that the vulnerabilities, pre-housing crash, seemed no more than those before the dot-com crash. This of course is nonsense. It is nonsense because a large number of experts in the field with good to excellent track records on predicting these things were openly stating that the coming housing crash would be nearly catastrophic if not completely catastrophic (and it's not over yet).

I sided with those doomsayers to the point where I openly stated that ½ of wealth in the US would be eliminated. When one factors in inflation and that the true hit we've taken after looking closely at Ben Bernanke's Fed policies of masking the trauma by buying up the toxic so-called assets to continue to prop up the otherwise insolvent banking system, I believe I was about right with that ½ statement (and, as I said, it's not over yet).

You will also note here that those experts I mention still are not at the forefront in government. Barack Obama has continued to ignore them to the nation's and world's financial and economic peril, not that I would go with those experts before going with my own plans. Going to USN in the manner I've mentioned along with focusing upon doing universally what the Christian Commons calls for is superior to anything else I've heard or seen (else I'd be touting something other than my plan).

What Ben decouples still is that we all knew pre-deregulation that deregulation would lead exactly to the vulnerabilities Ben appears to be suggesting were unknown. Well, he was ignoring them. That's for sure. He mentioned Brooksley Born in his first lecture I think. Regardless, he was an adult economist when she was arguing for greater and needed regulation of the very derivatives Ben now mentions repeatedly as being a huge part of the reason for the crash. (http://www.pbs.org/wgbh/pages/frontline/warning/view/.) I certainly remember the arguments at the time and sided with Ms. Born completely on the matter. I couldn't for the life of me understand how so many really stupid people were at the top working against Born. I now know that humanity is much darker (dark side; evil) than I realized at the time.

Ben doesn't mention the revolving door from Wall Street to the federal government or that the private rating agencies are paid by and beholden to those they rate. Those rating agencies rated junk as prime investments. There is a revolving door at those agencies as well. I suppose he'll get around to it somewhat.

The sociopaths have been running the show and still are under Barack Obama. Is Ben one of them? Is it a matter of degree? Yes.

Every criticism he has in hindsight is a recommendation for the New Deal. One could argue that the laissez-faire liquidators are right, but that's to argue that letting sociopaths run completely free is good and proper. Well, as a Christian, I'm with Jesus in that ultimately we humans reap what we sow and the best thing to sow is to do good only, which includes not repaying evil with evil. It's a very deep and lofty conceptual framework and not well understood or appreciated by the general public; but nevertheless, I'm for Jesus's position. Living completely up to it is a different matter. That said, failure is no excuse for not trying again and again and again forever.

He's now discussing Fannie and Freddie (GSE: Government Sponsored Enterprises). He explains the MSB (mortgage-backed securities function of Fannie and Freddie). This bundling of mortgages was a terrible idea. I don't know who came up with it, but removing the direct feedback-loop of lender to payor and back again removed or transferred the risk (supposedly) to others. Therefore, bad loans were made for profit. It all came back and bit everyone but those at the very top who were bailed (illegally).

Let me state at this point that Fannie and Freddie, while doing poorly, still did much better than the private sector in the due-diligence department. "Conservatives" like to pillory Fannie and Freddie while all but ignoring the much larger corruption in the private sector. It's spinning. It's dishonest.

I cannot overstate that deregulation in general was the culprit. Regulations needed reforming but not to be completely abandoned as they were in many instances. In many instances, so-called financial innovations ("creative financing" is what we called them back in the day) came on line that were never regulated.

I was in the market for real estate in 2002-3 and after doing the math (working out the cap rates, etc.), absolutely refused to participate. I thought the entire market was insane, and I was right.

Wow, did he ever just gloss over the rating agency's collusion in the Ponzi scheme. He said that negotiations were held between the lenders/securitizers and the rating agencies to work out what the lenders had to do to get high ratings. My understanding about what really happened was that the rating agencies turned a blind eye and played along. They fired people in their employ who raised red flags or blew the whistle - a standard practice of the evildoers/sociopaths.

Commingling good mortgages with bad was intentional. Breaking the title chain was also intentional. If the mess were made big enough, it would not be sorted out.

Barack Obama's famous and infamous approach was and has been not to look back, not to hold anyone to account. That insures a repeat because the same players will again game the system. In other words, Barack Obama is in on the play. He cannot feign ignorance. There is no plausible deniability.

Ben goes through the top failure and the takeovers, etc., of September-October 2008. He reminds his audience about the failure of the Fed during the Great Depression to ease credit by lending at low rates. What he won't mention, I assuming, is the alternative approach: nationalization. He did mention one governmental takeover (Washington Mutual), which ended up under J.P. Morgan. He discusses the Fed funding other than banks, which it did.

Now, Ben has repeatedly talked about calming the panic, but he keeps doing that vis-a-vis the bankers and not the general public. The bankers were bailed out. The general public ultimately picks up the tab in one way or another. It's been a huge transfer of wealth: wealth redistribution from those who can least afford it to those who gamed the system. This is what Bill Black called control fraud. He says it is criminogenic (crime-generating) behavior.

Ben says the Fed only lent to non-banks via collateral. Well, what was the quality of that collateral? Why weren't the investment banks (the broker-dealers, as he calls them) allowed to fail or taken over by the government, reorganized, and sold? That certainly could have happened. Had it, those who caused the crisis would not have been propped up, as they shouldn't have been. I've never advocated starving anyone, but there is zero reason other than criminal to keep criminals in high places when they deliberately fail over and over and over. It's a racket, and the Fed supports/facilitates it!

Bernanke spends quite a bit of time discussing the run on the Money Market Funds and with good reason. MMF's are more directly associated with the general public via pensions, and old folks/pensioners vote/influence. The MMF's in turn started dumping the commercial paper they were holding. The Fed stepped in and quelled the markets. For that, Bernanke deserves credit for doing a good job (after the fact) of doing what the Fed was ostensibly designed to do in part: slow and stop runs of various kinds.

I must say that what he just discussed has not been common knowledge. I had never heard it put into the nutshell form that Bernanke just supplied. Of course, this subject matter is not my main focus or sole focus.

Ben then discusses why the Fed rescued AIG. He says that it was feared that if AIG were to go under, the damage would not have been able to be handled. What Ben hasn't mentioned yet (will he?) were the huge bonuses paid to AIG executives. In fact, Ben hasn't discussed the gross overcompensation paid to any of the bankster types. So, Ben bails AIG, and AIG, with no compensation strings attached, continued paying obscene bonuses to those who caused the crash.

Here's what the Wikipedia has to say about it:

The AIG bonus payments controversy began in March 2009, when it was publicly disclosed that the American International Group (AIG) was to pay approximately $218 million in bonus payments to employees of its financial services division.

AIG is notable for having received $170 billion in taxpayer bailouts and in the fourth quarter of 2008 posted a loss of $61.7 billion, the greatest ever for any corporation.[1] Beyond the $165 million in bonus payments that were recently announced, total bonuses for the financial unit could reach $450 million and bonuses for the entire company could reach $1.2 billion.[2] This quickly led to what some have labeled a "populist outrage."

(http://en.wikipedia.org/wiki/AIG_bonus_payments_controversy.)

Ben says that the US Treasury still owns the majority of the stock of AIG. In other words, AIG is a nationalized (at least semi) institution; but you don't hear that term used in the mainstream because of its use by socialists and Marxists, etc. I don't shy away from it though because it doesn't matter who uses a term when the concept is completely valid. The US government is not running AIG's daily affairs. The government is not managing AIG. That's perhaps a difference that lets some get away with not calling AIG a governmental entity. I won't quibble over it. Personally, AIG should have been thoroughly nationalized: owned and operated by the US government on behalf of the American people.

Finally, Ben Bernanke says that "too big to fail" is fundamentally unfair. It incentivizes criminal risk-taking. However, he goes right on to say that the Fed (and others) didn't have the legal tools to allow those banksters and others to fail without causing incredible damage to the rest of the system. Hogwash! There were clearly crimes being committed by those banksters, and law-enforcement certainly could have stepped in. In addition, the US government could have past any emergency legislation necessary and on a very fast-track basis. I'm not at all convinced that there weren't laws in place that would have allowed the government to step in and takeover to save the economy. None of the people I've read, the same people who correctly prophesied the crash, have said what Bernanke just said. In fact, I've heard over and over and over about how the government could have stepped in by nationalizing any institution necessary.

Ben says that he will discuss next time the progress made in ending "too big to fail." Let's hope so.

I've read people who were involved in prior government takeovers who said very clearly that banks have been, and can be, taken over and reopened the very next day with all regular services available and with deposits still guaranteed. Ben says that wouldn't have been a good idea. I completely disagree. It was exactly the right move, barring no deregulation in the first place or better yet, no evil in the hearts and minds of anyone.

Bernanke is asked why bankers lent subprime, etc. He leans most heavily on the idea of overconfidence about banks being able to manage the risks. What he doesn't say is that "too big to fail" was common knowledge at the time (before the crash). The term had been used over and over and over, and the bankers leaned on their expectation that they could milk the system dry and yet be bailed out by the taxpayers, which is exactly what happened.

So, the Fed swapped dollars for euros (with no strings attached?) If the EU tanks, what will those euros be worth at the Fed? What has the Fed done with those euros? The European central bank lent out the dollars.

The question dealt with the rating agencies being paid by the sellers. Ben discussed the problem of free riders. However, if the ratings were done via a transaction tax or something along those ends, then only investors in general would pay. However, if the government is doing a good enough job supervising the economy on behalf of the people who own that government, if the government serves rather than simply rules, then the rating agencies become somewhat if not entirely moot, as it should be.

Ben Bernanke's 4th lecture at GWU: March 29, 2012 (http://youtu.be/mWl6JI4KBTg.)

This lecture is to be on "the aftermath of the crisis," as if it's over.

Ben Bernanke mentions that concerning the ownership of many banks during this recent crisis, the government took a majority position. As I mentioned earlier though, it did not manage those banks, which I believe was an error. The ownership has largely been bought back by private aspects/portions of many of those institutions, which I also deem an error. You might be interested in my public-banking post of March 29, 2012 ("California Investment Trust": A public-banking bill: AB 2500: http://www.realliberalchristianchurch.org/2012/03/29/california-investment-trust-a-public-banking-bill-ab-2500.html).

I was not aware that FDIC insured transaction-account limits had been raised to "infinity" (Bernanke's term). I wonder about the due-diligence concerning that. I also think that, that change may also promote wild risk-taking. However, that would depend upon other regulatory measures and enforcement. If the government is not bought off by the banks, then infinite limits would not be a bad thing, per se. Just how transparent is the due-diligence? You will remember that Ben Bernanke apparently did not like the "Audit the Fed" legislation.

The FDIC made it possible for banks to go to the equity markets for longer-term loans. They did that for a fee and after some sort of oversight/investigation/reporting that Ben didn't go into.

The Fed did "stress tests" on the largest banks, which signaled the "markets" to invest in those banks. The proceeds from the sale of shares was, according to Ben, used in many cases to pay off the government - to buy out the government's ownership positions.

Now, Ben Bernanke says something, which I hope someone brings up in the Q&A, that I find contradictory from the evidence. That is that the Fed was charging banks a rate that was higher than usual. Everything I've read says that the Fed lent low and paid high, so that banks parked and still park funds at the Fed rather than lending for profit elsewhere. Exactly which programs Ben is referring to, he doesn't say here. I'm wondering how large these were versus the funds parked at the Fed.

Ben says that the Fed made 21,000 loans during the crisis, which loans the Fed reported to Congress. Ben says that none defaulted and that taxpayers came out ahead on those loans. Well, that's only if you completely disregard the negatives associated with the whole process and disregard all the toxics that the Fed is still holding (many hundreds of billions the last time I saw the graph).

Ben now switches from the subject of "lender of last resort" to the use of "monetary policy."

He says that the Fed interest rate to banks was lowered as low as it could go.

Now he begins to discuss Large-Scale Asset Purchases (L-SAP's) by the Fed (Quantitative Easing; QE).

He says that the Fed only bought US securities and government-sponsored enterprise (Fannie and Freddie) mortgage-backed securities, which you will remember were subject to more due-diligence than were the non-GSE's securities.

QE1 was in March 2009. QE2 was in November 2010. They bought some $2 trillion of those "assets." Well, Ben thinks they are backed up by tangible houses, etc. Certainly the houses also sit on land with some value, although large swaths of Detroit, if instance, have been reduced to what should be or become farmland if Detroit is not to recover its industrial base.

Well, Ben puts up the graph I mentioned just a bit ago and showing the current holdings of the Fed of these "assets." I have to say that there is no way that some of those "assets" don't include toxic derivatives. I would really like to see a graph breaking down/revealing that aspect. I believe Ben had already said in a previous lecture that Fannie and Freddie did buy some exotic derivative.

By buying those, the Fed increased their price and lowered their yield (the investor's return on the price paid). This moves people out of those "holding" securities. Ben says that, that process lowers interest rates across-the-board.

I don't know whether he'll mention it or not, but it also increases the money supply (monetary inflation but not velocity or the flow of funds - remember the parked funds at the Fed).

Ben now discusses the magic. The Fed paid for the securities by crediting the reserve accounts of the sellers. Now, he may not say it. Banks may then lend against those reserves. In essence, the Fed created about $2 trillion in debt-money which would likewise be the basis for banks lending and creating more debt-money via fractional-reserves. They aren't lending much yet though. The Fed is still paying interest on those reserves.

Now, Ben says this does not constitute the Fed "printing money" to buy the assets. That's semantics. Ben is making a distinction between currency in the form of Fed notes and coins versus debt-money. Debt-money spends just as easily as Fed notes and Treasury coins though. The argument is moot.

Wow, he's really glossing over this subject and misleading the students, at least those of them who don't know and understand what I just wrote about.

He's concealing the fractional-reserve aspect entirely. He's saying it's part of base money but not cash. Which cash? Which money measure? I suspect the students have studied M0, M1, M2, M3 (http://en.wikipedia.org/wiki/Money_supply#United_States); but there is debt-money aside from all of that.

Ben says that the Fed returns profits to the federal government. My understanding is that the Fed keeps 6%. Some of that 6% is interest paid on the US securities purchased by the Fed. In that way, the Fed can be a factor in creating larger deficits (contrary to Ben's statement). Ben's point though is that the bonds would have been out there anyway, and non-Fed investors would not have returned all but 6% to the government.

The Fed has defined price stability as 2% inflation. That's something that I hate. We don't need any inflation. United States Notes would solve that provided they are pegged exactly and in real-time to real growth.

Ben says the recession ended, but that's not well understood even by those whose job it is to declare the dates because we still don't know what constitutes real versus phony growth. Also, there's something to be said for redefining recession away from contraction versus growth to the question of what is a negative deviation away from the true statistical center between the top and bottom of the business cycle. That's a simple concept, but it would take a bit to show what I mean in graph-form.

Ben used the term "real economy." For those who may not know it, that's an anti-Wall Street expression. Ben's showing some old-school progressivism in his use of that term where and how he employed it.

Bernanke is trying to explain why the recovery has been slow. He has yet to mention that the Fed has paid banks to park their funds rather than lend. This is a huge area of concern. The no-strings-attached approach is the main reason for the slower recovery, that and the fact that the QE was too little and aimed at the wrong parties: banks. Ben though says that the Fed didn't have the legal authority to aim it at Main Street. I'm not convinced: but regardless, the Obama administration could have tried much harder with or without the Fed.

Now Ben launches into explaining the general highlights of the Dodd-Frank Act (Dodd-Frank Wall Street Reform and Consumer Protection Act).

Capital requirements have been increased.

The Volker Rule has been implemented partially and insufficiently to address the near abandonment of the Glass-Steagall Act (http://en.wikipedia.org/wiki/Glass-Steagall_Act). The Volker Rule:

The rule is often referred to as a ban on proprietary trading by commercial banks, whereby deposits are used to trade on the bank's personal accounts, although a number of exceptions to this ban were included in the Dodd-Frank law.

(http://en.wikipedia.org/wiki/Volker_Rule.)

There is greater supervision and mandated stress-testing.

Bernanke is discussing the FDIC's "orderly liquidation authority." As I've mentioned before, many people (myself included) believe that the government had that authority. Ben does say that the FDIC can do this already, but he's made the distinction concerning larger, perhaps multinational organizations that apparently didn't come under the express jurisdiction of the FDIC. He also made clear that it is no longer "legal" for the Fed to bailout so-called "too big to fail" institutions anymore. Good!

Derivatives will be regulated (somewhat).

"Financial crises will always be with us." - Ben Bernanke. That doesn't have to be. I don't buy that statement. You shouldn't either.

In the second question from the students, Ben openly states that the Fed can offer higher rates to cause banks to park funds, which reduces lending and, in turn, slows inflation. Why didn't he discuss this as a reason for why the economy hasn't recovered quickly?

Here's a very valuable follow-on link: "Brazil and South Africa Hit Hard by Exchange Rate Complications" (http://ipsnews.net/news.asp?idnews=107259).

"A strong consensus now exists on the importance of promoting market-determined exchange rate systems, enhancing flexibility to reflect underlying economic fundamentals, avoiding persistent exchange rate misalignments and refraining from competitive currency devaluation," said Mark Sobel, the U.S. Treasury Department's deputy assistant secretary for international monetary and financial policy.

The Chinese response:

China responded saying that those countries adopting unconventional monetary policy have contributed to the currency volatility and misalignment by adding liquidity to financial markets.

"Exchange rate volatility was intensified by the monetary policy of major currency issuers - the U.S.," Ruogu Li, president of China's Exim Bank, told the participants.

"Both developed and developing members have fallen victim to major currency issuers," the Chinese banker said, according to sources present at the meeting. "For every iPhone sold in the U.S., Chinese workers and companies get less than two percent, while the rest of the profits go to the American companies."

Interesting point that.

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  • Whether the statement expresses approval or disapproval of one or more candidates' positions and/or actions
  • Whether the statement is delivered close in time to the election
  • Whether the statement makes reference to voting or an election
  • Whether the issue addressed distinguishes candidates for a given office

Many religious organizations believe, as we do, that the above constitutes a violation of the First Amendment of the US Constitution.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

That said, we make the following absolutely clear here:

  • The Real Liberal Christian Church and Christian Commons Project not only do not endorse any candidate for any secular office, we say that Christianity forbids voting in such elections.
  • Furthermore, when we discuss any public-office holder's position, policy, action or inaction, we definitely are not encouraging anyone to vote for that office holder's position.
  • We are not trying to influence secular elections but rather want people to come out from that entire fallen system.
  • When we analyze or discuss what is termed "public policy," we do it entirely from a theological standpoint with an eye to educating professing Christians and those to whom we are openly always proselytizing to convert to authentic Christianity.
  • It is impossible for us to fully evangelize and proselytize without directly discussing the pros and cons of public policy and the positions of secular-office holders, hence the unconstitutionality of the IRS code on the matter.
  • We are not rich and wouldn't be looking for a fight regardless. What we cannot do is compromise our faith (which seeks to harm nobody, quite the contrary).
  • We render unto Caesar what is Caesar's. We render unto God what is God's.
  • When Caesar says to us that unless we shut up about the unrighteousness of Caesar's policies and practices, we will lose the ability of people who donate to us to declare their donations as deductions on their federal and state income-tax returns, we say to Caesar that we cannot shut up while exercising our religion in a very reasonable way.
  • We consider the IRS code on this matter as deliberate economic duress (a form of coercion) and a direct attempt by the federal government to censor dissenting, free political and religious speech.
  • It's not freedom of religion if they tax it.

And when they were come to Capernaum, they that received tribute money came to Peter, and said, Doth not your master pay tribute? He saith, Yes. And when he was come into the house, Jesus prevented him, saying, What thinkest thou, Simon? of whom do the kings of the earth take custom or tribute? of their own children, or of strangers? Peter saith unto him, Of strangers. Jesus saith unto him, Then are the children free. (Matthew 17:24-26)

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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