Fed staff in trouble, but cited for raise, too

February 25, 2009

USA/It’s not just U.S. stocks that are on a roller coaster ride in reaction to congressional testimony by Federal Reserve Chairman Ben Bernanke and other top officials.

Fed staff stock plunged on Wednesday when they put their boss in an awkward position during Bernanke’s testimony before Congress on the financial bailout and efforts to stabilize the swooning economy.

Rep. Scott Garrett testily reminded Bernanke that he was still waiting for answers for a letter he sent in December.

“We need to move on some of these issues,” Garrett said.

“You have not received a reply?” Bernanke asked, sounding surprised.  

When Garrett said he had not, the Fed chairman took time out from discussing the narrowly averted global financial meltdown to assure the lawmaker he would crack down on his wayward staff.

“After some concerns about this, I have asked staff to try to put a one-month limit on (response) time.  And so, clearly, that has not been met in this case, and I will check up on the situation,” Bernanke said.

Later, however, Fed bureaucrats received a sort-of compliment from Rep. Michael Capuano, who was upset the government has yet to make clear how it plans to purge the financial system from assets that have lost value because they are linked to delinquent mortgage loans.

Capuano marveled that the government now calls them “legacy” assets instead of “toxic” assets.

“It’s a good term,” Capuano said.   “Whoever made it up, give them a raise, because it sounds much better than toxic assets.” 

Bernanke could not suppress a smile. 

Will that encourage officials to start calling bank nationalization “pre-privatization,” as some observers have suggested?

3 comments

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“narrowly averted global financial meltdown”?!?!?! What are YOU smoking? How can you say anything has been averted with markets still trying to find the bottom? And with all this government debt-blasting spending, burdening our great-great grandchildren, it will only get worse, globally. Haven’t learned from the last Depression, beacuse they only look at what they want to, and believe the public-school myths. Only Netanyahu seems to have it right so far.

Posted by pJarhead | Report as abusive

why do I feel like I’ve just handed the keys to the car and a new credit card to an irresponsible, drunk teen? Voted for Obama because I wanted change, but I must say I feel conned as I didn’t give a blank check for trillions of gov’t spending while I’m asked to budget and cut back. Shouldn’t govt have to tighten it’s belt too? Why didn’t they put in a payroll tax cut? That would have helped businesses right away by making labor cheaper and helped us right away by increasing our net pay. No tax increases, but now tax cuts are being taken away so net taxes go up for many who have worked hard. Dems had control of the house since 2006 yet can’t see the logic that we see in the “real” world… we can’t make our problems go away by running up our credit cards, why would we think doing that on the govt side would work(with China happy to loan us money (no strings?)). Is it wise to put our country at the mercy and under the influence of China holding a lien on us? Do they have our best interest at heart? Please fellow democrats stop blaming Bush for everything especially in light of our party controlling the house and senate since 2006. We need to hold our party as accountable as we were trying to hold the Repbulicans… Why shouldn’t all the people who oversaw Fannie Mae and Freddie Mac be canned..? They would have been in public sector… And they wonder why trust in the govt is going down faster than the stock market…

Posted by tb | Report as abusive

This new regime is giddy with its blank-check power. I’m frightened beyond words how the TRILLIONS of dollars the Democrats/Obama/Pelosi want to spend are just the tip of a growing iceberg of fiscal irresponsibility and demand on all Americans.

More taxes, more taxes, more taxes. The numbers presented in Obama’s new budget are foolhardy. They are fictional, and do not compute with the number of taxpaying Americans, even if you were to figure in all retired people, those in a coma, those in the war zone, and newborn infants paying income taxes to sustain the demands of this new budget. Overtaxing the “rich” has never worked. For the bloated amount of money Obama wants, there is not enough money to squeeze out of “rich folks.” There aren’t enough rich people in the country to pay for his grandiose budget. So, the taxes on average people will have to be raised – soon. We all will have to “put more skin in the game,” breaking yet another of his “promises.”

To quote economist and author Thomas Sowell, “The question is not what anybody deserves. The question is who is to take on the God-like role of deciding what everybody else deserves. You can talk about ‘social justice’ all you want. But what death taxes boil down to is letting politicians take money from widows and orphans to pay for goodies that they will hand out to others, in order to buy votes to get re-elected. That is not social justice or any other kind of justice.”

It was Thomas Jefferson who declared, more than 225 years ago, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”