Romney looks to give Bernanke the boot
“I’d be looking for somebody new.”
Those words from the U.S. Republican presidential candidate Mitt Romney may give Federal Reserve Chairman Ben Bernanke some pause – or at least thinking about some other job prospects if the GOP frontrunner wins the Nov. 6 election.
As we report, Romney, a former business executive who’s made the economy the cornerstone of his campaign, has made it clear that if he wins the White House he will try to replace Bernanke. The Fed chief’s term ends in January 2014 – a year after the next president takes office. Although Bernanke was nominated by Republican President George W. Bush, Democratic President Barack Obama give him second term in 2009.
Bernanke, who was back in the spotlight on Wednesday as he defended current U.S. monetary as being on track, has been both vilified and revered for his role amid the Great Recession that began in 2008. Critics contend he is pursuing a reckless money-printing binge that exposes the world’s largest economy to a dangerous inflation risks while his defenders credit him with bold moves to stimulate growth that prevented a repeat of 1929-level depression.
Romney is signaling he wants the Fed – and the economy — to take a different direction. And that means giving Bernanke the boot, he says.
Washington Extra – Moonshot no more
Earth calling Newt: When the biggest news of your presidential campaign is the penguin biting your hand at the zoo, it’s probably time to pack it in.
Even though Newt Gingrich’s odds of winning the Republican nomination were about as long as those of realizing his dream for a moon colony, the 68-year-old seemed to enjoy himself to the end. “I never got the sense that he was quote-unquote down,” said adviser Charlie Gerow. “I got the sense on a couple of occasions that he was tired. Really tired.” And really in debt. His campaign spent $4.3 million more than it brought in.
For all his offbeat ideas, Gingrich did bring a dose of seriousness to this campaign. With some stellar debate performances and a deep knowledge of politics and history, he probably made Mitt Romney and Rick Santorum study more and work harder to win support.
Members of the media, targets of some of his most vicious attacks, may not miss Newt much. But there’s no denying that, for the world of news, Gingrich was the gift that kept on giving, right up to his encounter with a penguin.
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US high court appears to back Arizona on immigration – Conservative justices who hold a majority on the Supreme Court appeared to endorse Arizona’s immigration crackdown, rejecting the Obama administration stance that the federal government has sole power over those who illegally enter the United States. During 80 minutes of oral arguments, the justices suggested by their questions and comments that states have significant latitude to adopt laws that discourage illegal immigrants from moving to and staying in the country. For more of this story by James Vicini and Joan Biskupic, read here.
Washington Extra – Easy money
Some great news for all you borrowers today from the Fed. Interest rates are likely to remain around zero until at least late 2014. That’s later than previously expected, and to put things in perspective, it’s nearly two years into the term of the president who will be elected in November.
What it tells us is that the economy is still very vulnerable. Ben Bernanke said as much today: “I don’t think we’re ready to declare that we’ve entered a new, stronger phase at this point.” He left the door wide open to further Fed stimulus via bond purchases.
And Bernanke was almost apologetic about what this interest rate outlook means for another large swathe of the population: the savers. Take Maggie Smith, not the actress but a 74-year-old from New Jersey who watches her interest income on savings stagnate while home and car costs go up. After more than five years of rock-bottom rates, it’s no wonder she feels like she’s “being punished” for being prudent.
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The bigger picture I have in my mind shows that a underground transit system would be far more capable of supporting the highest speeds possible and perhaps without any rails at all depending in the turbulent nature of the air space between the moving object and the wall of the tunnel, the faster it goes the more stable it becomes. At a relative speed of 100 overdrive kicks in and the turbo nature of plasma thrusters enables a unrecordable speed as this would be the Ultimate for transit systems far better than a High-Speed Rail. If the world ever decides that monitoring the ocean for debris movement is feasible then there will be a project that can launch the Ultimate from its underground tunnel into the ocean depth and become the first sub rail-less system between continents, Only a tamed undercurrent would allow this to occur without any debris collision – you can call it a ninth sense of knowing the moment that our migration travel can occur while large ships would become less depended upon and faster shipments would occur. This is a future of opportunity not choice and not simply a change because the fuel of design is Methane Pellets for the Plasma Engines, not Oil, not Natural Gas, not CNG or LPG. The molecular bond of H20 slows down a object because of the friction and collective adhesion to the object without those two factors the object is a separate body within the water. Its not a Supersonic DeLorean car since it is a train that can travel on land, in the ground tunnel or under water without a tunnel at ultrasonic speed. Hull pressure is the navigation tool to harness a vast computer field for travel between continents. Pressure produces an electrical charge, the more pressure the more the electrical charge, so its the body of the train that is superimposed with an electrical charge that causes the vibration of the water and ultimately producing a micron gap between the body and the water like a envelope while plasma engines are the only exposed portion that is providing thrust then there is no friction. Maintaining a constant hull pressure on the exterior body of the train surface is accomplished via electrical charge so the ocean current has little effect on the mobility. Scientific advancement in modes of travel, not a ‘Time Machine’, would be introduced beyond those which are governed capitalistic commercial operations such that the High-Speed Rail has become to the states that cannot afford to build it and will depend on private contractors to fund the project Obama laid out instead of the Keystone XL Pipeline. I reconcile the rejection based on my ideology that pipelines should be regulated to a depth ordinance throughout their layout and not be different in anyway or circumstance with a slight variable of one foot minimum to a maximum of two feet for depth evaluation when the pipeline is sub-surface so there is no excuse for the terrain being unlevel to have thirty foot depth at a hill and one foot depth in a valley. That is my first observation, the second observation is that terrain is being consumed so let’s suppose for a minute that we could create a train that travels without tracks where we have a pipeline buried we have less a chance to use that terrain for a train to travel, regulated throughways are yet proposed for any mode of travel much less a train and I would prefer to keep a train below surface as that eliminates so many obstacles and enhances safety. Why spend America’s money on a train that has a short distance to travel High-Speed when a different mode of travel at High-Speed is more possible? Objects that can fly are a better objective for travel that objects that have to have a rail to travel on which is subjected to the climate change for many years that require either renewal or entire replacement of sections miles long because of the warping. Massive & expensive highway construction is another reason that railway was destined to be better but the atmosphere if not kept clean because of development one day creates a toxic network that cannot maintain its bottled up nature and treks between cities and states because of a mode of travel. It creates a environmental disaster years later requiring reconstituting the entire rail system every six to ten years, when do we begin to replace the cloud or make the air quality we need on earth. Congress is off topic, shaken by to many distractions to realize what future lies ahead we must begin to consider instead of tossing money into the wind and hoping that the jobs created will make up the difference. What is suppose to be gained, a new Congress maybe then bring it on now.
Washington Extra – One more for the road
Jon Huntsman is in. Well, technically, the Republican announced that he will announce that he is in next Tuesday.
“I intend to announce that I will be a candidate for the presidency a week from today,” the former U.S. ambassador to China said at a Thomson Reuters event in New York.
He advocated “getting our own house in order” to improve ties with China. “As we have a very weak economic core, we are less able to project the goodness and the power and the might of the United States,” Huntsman said.
“We sit diminished and discounted at the negotiating table and everybody knows that. So if you want a strong U.S.-China relationship, I would argue that we probably have a little bit of work here in our own backyard,” the ex-Utah governor said.
China, the largest foreign creditor holding more than $1 trillion in Treasury debt as of March, has expressed concern that the U.S. might default on its debt due to politics.
In Washington, Federal Reserve Chairman Ben Bernanke issued a stark warning that failure to lift the debt ceiling risked a loss of confidence in America’s creditworthiness and might damage the dollar’s reserve currency status.
Republicans have so far appeared immune to the “sky is falling” scenario, and all eyes are on Vice President Joe Biden to see if he can maneuver a deal.
What’s on Ben’s mind?
We’ve created a quick and dirty word cloud of what Fed Chairman Ben Bernanke said in his historic press conference this afternoon. Words he used more often are larger than less-used words. For bonus points try to find the word “jobs” in there:
Update: Looks like Paul Krugman and Ezra Klein took note of our our cloud. Thanks for the links guys - we’re glad to help out anytime!
Word cloud created using Wordle.net.
I think that the Fed can only do so much. The president and Congress apparently cannot do their share, and I suspect they are too concerned about getting reelected. We might just need another agency to manage energy and another for banking, and another for business. I don’t think Congress or Obama can do their jobs with the people they have.
Bernanke and the media — Round One coming up
The Federal Reserve needs to burnish its image, but press conferences aren’t entirely a public relations exercise.
For Fed Chairman Ben Bernanke, the emphasis on greater openness predates the financial crisis. After his notoriously cryptic predecessor Alan Greenspan, Bernanke has made the Fed more open and his own statements easier to parse.
Many economists, Bernanke included, believe financial markets function more smoothly when the Fed makes its intentions, and its expected reaction to twists and turns in the economy, crystal clear.
In fact, one of Bernanke’s early transparency initiatives, an explicit target for inflation, was shot down by Democratic Congressman Barney Frank who argued that since the Fed has a dual mandate to keep inflation in check but also promote maximum employment, setting an inflation target would focus too much on one side of that equation.
Nevertheless, Bernanke has slowly made Fed thinking more accessible to the public. Under his direction, the Fed published minutes of policy meetings after three weeks, instead of six.
It has begun to publish its economic forecasts four times a year, instead of two, and extended the length of its outlook to three years from two. It has included a long-range forecast as well — a backdoor way of saying what its preferred level of inflation is (1.6 percent to 2 percent).
Bernanke’s own speeches, testimony, and responses to questions at congressional hearings have been much easier to understand than those of his predecessor, who believed some ambiguity about the Fed’s intentions left it with more policy options.
So when will Ben Bernanke explain what ‘assets’ the Federal Reserve bought when they doubled M0 by creating $1,200,000,000,000 out of nothing?
Washington Extra – Fed speak
Has hell frozen over? Are pigs flying? Is the sun rising in the West?
Don’t rub your eyes, it’s real. The Federal Reserve chairman, that oracle of monetary policy, will hold FOUR news conferences a year.
The first will be on April 27 after a two-day FOMC meeting. It marks the first time in the nearly 100-year history of the central bank that a Fed chief will deign to hold a regular media briefing. It’s almost too tantalizing to contemplate.
After years of reading the tea leaves following these monetary policy setting meetings, reporters will actually get to ask questions of Fed Chairman Ben Bernanke immediately after THE DECISION is made.
We’re guessing it would be a bit too much to expect that he would give a thumbs up or down to indicate which way rates are going, but we can now ask him THE QUESTION (and then parse the answer).
Bernanke-speak tends to be a bit clearer than Greenspan-speak, but all Fed chairmen are adept at obfuscation when required.
Still, the doors have opened, the questions will be asked, and let’s see how the answers are given.
Washington Extra – Happy Thanksgiving
Happy Thanksgiving! Washington Extra will return on Monday.
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U.S. vows unified response to North Korea, eyes restraint
The U.S. urged restraint following a North Korean artillery attack on South Korea and vowed to forge a “measured and unified” response with major powers including China.
For more of this story by Phil Stewart and Andrew Quinn, read here.
N.Korea pulls U.S. back to a “land of lousy options”
Pretty sure North Korea = China in the different names of one country, or a military branch & a lapdog.
Washington Extra – Under fire
He is not quite the loneliest man in the world, but Fed chairman Ben Bernanke must be feeling in need of a friend these days. First those nasty Tea party types stormed the capital with their distinctively un-Fed-friendly views. Dismiss them as extremists if you will, but they seemed to have been joined by an array of world leaders in their criticism of quantitative easing, the Fed’s purchases of U.S. government debt in an attempt to stimulate the economy.
The rest of the world fears the Fed’s action amount to a backhand form of competitive currency devaluation. Many Republicans fear the Fed is enabling profligate U.S. budgetary policy. Even Fed governors and regional presidents are uneasy. Governor Kevin Warsh warned on Monday the Fed was not “a repair shop for broken fiscal or regulatory policies” and that the Fed could lose its “hard-earned credibility – and monetary policy can lose its hard-earned sway – if its policies overpromise or underdeliver.” Dallas Fed Reserve Bank President Richard Fisher then chimed in, calling quantitative easing “a bridge loan to fiscal sanity.”
In the end, the effects of the Fed’s latest move on economic growth may not be that dramatic. Its effect on the Fed’s long-term credibility, though, are less clear, and perhaps more worrying.
Finally today, hats off to the New York Times’ Norimitsu Onishi, whose research into Obama’s childhood in Indonesia threw up some unexpected gems. The future president, a chubby kid known as Barry, was apparently also referred to a “the boy who runs like a duck.” His nanny, an openly gay man, had an affair with the local butcher before running off to join a group of transvestites known as the Fantastic Dolls. But however unconventional his upbringing, even then Obama seemingly had leadership qualities.
Once, Onishi reports, Obama asked a group of boys whether they wanted to grow up to be president, a soldier or a businessman. A president would own nothing while a soldier would possess weapons and a businessman would have money, the young Obama explained.
The other boys chose to become bankers or soldiers. “Then Barry said he would become president and order the soldier to guard him and the businessman to use his money to build him something,” said one of his former friends, Slamet Januadi. “We told him, ‘You cheated. You didn’t give us those details.’ But we all became what we said we would.”
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Washington Extra – Dinner party ideas
Congress might not get much done in the next two years, but boring it won’t be. Certainly not with Ron Paul as likely head of the monetary policy (aka Fed oversight) subcommittee in the House.
Today, Paul the elder told Reuters correspondent Andy Sullivan that he was looking forward to his new “very, very important” role. The Fed, he said, was ”way too independent” and “totally out of control.” Quantitative easing – the Fed’s controversial program to purchase government securities – is not just lousy economics and lousy monetary policy, he said, it is “central economic planning at its worst.” More here.
Expect more fireworks from other conservative Republicans in the coming Congress, people who believe the Fed is enabling excessive government borrowing through its purchases of government debt, that it is printing money to finance the deficit. Then there is Darrell Issa, likely head of the oversight committee, with the subpoena power to be at least as much of a thorn in Ben Bernanke’s side than either of the Paul clan. It will be interesting to see if any of them can get under the skin of the normally unflappable Fed chairman.
Meanwhile, as first predicted in Washington Extra in early September, one possible compromise on extending the Bush-era tax cuts is already taking shape. That would revolve around a permanent extension of the cuts for the middle classes, and a temporary extension for the wealthiest. At least that is something President Barack Obama would be “open” to discussing, according to his spokesman Robert Gibbs. Taxes will be high on the menu when Congressional leaders come to the White House on November 18, for a meeting that Obama hopes will “spill over into dinner”. Let’s see if the Republicans bite.
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White House signals tax compromise with Republicans
The White House signaled it could compromise with Republicans on tax cuts, the first possible policy shift by President Obama since his the midterms. The two parties need to agree on extending Bush-era tax cuts or they will run out at the end of the year.
Getting rid of Bernanke would be about as clueless as every other portion of Romney’s economic incompetence. He didn’t even move into Bain – with other people doing the investing – until he had a 100% salary guarantee in case he screwed up.
The man has the courage of the average bear – none! He has the competence of today’s Republican Party – none!
Part of the success story of the stimulus package has shown up around the country in basic manufacturing industries and continues. Half the credit goes to the halfway measures Obama was able to force past the Party of No – before it became the Party of Never. The other half goes to Bernanke and the availability of greenbacks for industrial revival.
Ohio steel being the best example. Unemployment down to 7.5% in that state.