I call BS. Allowng FED intervention, and TARP was a serious mistake that amounted to kicking the can down the street.
The government, including the FED should have allowed the country to take its medicine like we should have back in '08. Then force an austerity program to right the ship.
The government ran up $8 trillion in debt prior to 2008 with no help from the FED.
That amounts to a debt of $8T for the first 235 years of this country. Well guess what in a short 5 years the FED has over doubled that and added another $9T. You might support Bungling Ben and his QE sideshow, but I for one think him, his boss Obummer, and our complicit congress are about to steer the train off the cliff.
The FED only got involved because unemployment soared, which is what they are supposed to do. That’s their legal mandate.
If that was the case why did Bungling Ben keep pumping the QE spigot after unemployement stablized (though high) in the '09-'10 timeframe?
The President appoints the Fed Chairman from among the sitting Governors, who themselves are appointed by the President in staggered 14 year terms. Once appointed he cannot be removed by the President. It would take an act of Congress to fire him.
I call BS. Allowng FED intervention, and TARP was a serious mistake that amounted to kicking the can down the street.
But who really allowed that? Congress approved TARP and the President signed it. I do think the FED made a mistake. They lowered the Bank Reserve ratio over the last 20 years to an effective 1% from it's historical 15%. That left them no room to maneuver when the liquidity crisis hit. That's why Congress had to get involved.
But Congress had made prior mistakes too. They repealed the Glass-Steagall act that prevented banks from engaging in risky behaviors. The FDIC failed to adequately investigate the credit default swaps that banks were claiming were offsetting their risk.
The lowering of reserves, the repeal of Glass-Steagall was all done to allow U.S. banks to compete against European banks on European banks terms. Instead of forcing European banks to come up to our standards to do business here, we lowered our standards to remain competitive with them.
"That amounts to a debt of $8T for the first 235 years of this country. Well guess what in a short 5 years the FED has over doubled that and added another $9T.
The FED only bought $1.9 Trillion of that extra $9 Trillion. The Rest Congress borrowed from others.
You might support Bungling Ben and his QE sideshow, but I for one think him, his boss Obummer, and our complicit congress are about to steer the train off the cliff."
I agree that Obama and our complicit congress are steering us wrong. The overspending is ridiculous. But that's not the FED's fault. Congress approves the spending and the borrowing. The FED jumped into to lower interest rates to try to get the unemployment down and offset deflation caused by the credit crisis.
"The government, including the FED should have allowed the country to take its medicine like we should have back in '08. Then force an austerity program to right the ship."
Congress should certainly reign in spending. But if you're talking about letting banks fail. That has severe ripple effects. Bank customers often fail when their banking relationships fail. The FDIC did close 465 banks from 2008-2012. Too much medicine at one time can kill a patient.
"If that was the case why did Bungling Ben keep pumping the QE spigot after unemployement stablized (though high) in the '09-'10 timeframe?"
If unemployment's high, Ben should keep the throttle on. Unemployment is at 23% now according to shadowstats.com. (they include a group of long-term unemployed that Clinton defined out of existence.)
Unfortunately, we've done nothing to reign in our incentives to offshore our industries. So the FED is bailing water, but the boat is sinking faster than the FED can bail.
With the one exception of lowering the Reserve ratios prior to the crisis, the FED is the only one up there that is doing what they are supposed to be doing.