So much for the recovery. Even liberals admit employment is “weak,” that household wealth hasn’t recovered and consumer experts say middle-class retailers are “struggling.” But two of the three broadcast news networks have been much more focused on “proof that the economy is getting stronger,” than on economic worries since the May jobs report was released June 6.
Federal Reserve Chairman Ben Bernanke surprised some on Sept. 18, when he postponed the tapering off of its huge monetary “stimulus” policy called quantitative easing (QE). At the same time, the Fed cut economic growth forecasts. Reuters reported that “the Fed cut its forecast for 2013 economic growth to a 2.0 percent to 2.3 percent range from a June estimate of 2.3 percent to 2.6 percent. The downgrade for 2014 was even sharper.”
A November 15, 2010 blog post by Michael S. Derby at the Wall Street Journal ("San Francisco Fed Official Says QE2 Is Working") told us that "The Federal Reserve‘s recently announced plan to buy $600 billion in Treasury securities to improve economic growth is having a positive effect on growth." The Fed official involved also predicted "the U.S. gross domestic product to come in at 2.5% this year (2010), and at 3.5% next year and 4.5% the year after that."
Uh, not exactly. Actual GDP results: 2.5% in 2010 (that was a gimme), followed by 1.8% and 2.8% in 2011 and 2012, respectively. Almost three years letter, the San Fran Fed's acknowledged result of that effort at "quantitative easing" — it "added about 0.13 percentage point to real GDP growth in late 2010" — is starkly different, and is only "positive" if you think a football team managing one field goal in four quarters is "positive." Of course, though it should be, the news is getting very little coverage.
Today, as the wire service AFP reported in a story carried at Yahoo.com, Federal Reserve Chairman Ben Bernanke, in the question and answer exchange after his prepared testimony, told the House Financial Services Committee that "If we were to tighten (monetary) policy, the economy would tank."
That assessment of the economy's fragility qualifies as news, especially given the Obama administration's continued claim that the economy is "continuing to recover at a promising rate." Outlets besides AFP virtually ignored Bernanke's soundbite, which should be considered scary to anyone who realizes that Big Ben can't go on "stimulating" at his current rate forever.
CNBC’s Jim Cramer made a statement on NBC’s Meet the Press Sunday that likely shocked the host as well as the other liberal media members involved in the discussion.
After David Gregory mentioned Friday’s lousy unemployment report, Cramer said, “This is stunning. Stunning. And I think a lot of it had to do with fearmongering” (video follows with transcribed highlights and commentary):
While you were watching Rand Paul's historic filibuster and the debate surrounding budget sequestration, an economic theory battle was waging between two of the nation's foremost liberal economists Paul Krugman and Jeffrey Sachs.
In his most recent salvo published at the Huffington Post Saturday, Sachs spoke heresy to Obama-lovers across the fruited plain including Krugman claiming that following the 2008 financial crisis, "It was the Fed, not the fiscal stimulus, which prevented a fall into depression."
CBS News political director John Dickerson all but crossed his fingers on Wednesday's CBS This Morning as he forwarded the idea of letting the country go over the looming fiscal cliff so President Obama could gain the political advantage: "There is an argument for actually...letting this happen. The President gets even more leverage."
Dickerson explained that "if the so-called fiscal cliff happens, taxes go up for everybody; then, you have a conversation about – not about raising taxes, but about, then, cutting taxes." So, the President and Congress will look good for supposedly cutting taxes after raising them?
Entitled "Fed action a welcome move for small businesses" and appearing very early this morning, it claims that Federal Reserve Chairman Ben Bernanke's third round of quantitative easing, aka QE3, is "confidence-building move" and "a reassuring sign to the financial markets as it signals to investors that U.S. monetary policy will serve as a stabilizing partner as our economy continues to improve. Its author, Sharon Jenkins, described as "is principal and lead strategist at Alexandria-based My Brothers’ Business Enterprises," is not a regular at the blog; unlike all others I saw, her name isn't even hyperlinked at her post. So who is this "Sharon Jenkins"?
Whoever wrote the Associated Press's brief dispatch yesterday on the results of the government's auction of 10-year Treasury notes seemed to be stunned and on the defensive about its result.
The item, entitled "Weak Demand at Auction of 10-Year U.S. Treasury Debt," began as follows: "U.S. Treasury prices dived Wednesday after an auction of 10-year notes drew very weak demand, signaling a lack of appetite for ultra-safe investments." Gee, I wonder why there's a "lack of appetite"?
In his Jackson Hole, Wyoming presentation today, Federal Reserve Chairman Ben Bernanke, as reported by Paul Wiseman at the Associated Press, made the following claim in connection with the Fed's programs of "quantitative easing" (QE): "Bernanke argued Friday that collectively, such measures have succeeded. He cited research showing that two rounds of QE (quantitative easing) had created 2 million jobs and accelerated U.S. economic growth."
I'm not inclined to automatically believe Big Ben's word. But if he's right, and if the allegedly positive effects of QE started being felt at about the time the recession ended, that would mean that the fiscal policies of the Obama administration are responsible for the remnant. Of course, Wiseman at the Associated Press, aka the Administration's Press, didn't ask the next logical question, so I will. Guess how big that remnant is?
During the March 27 edition of “World News,” ABC’s Diane Sawyer treated Federal Reserve Chairman Ben Bernanke to a softball interview which alternated between human interest angles and portraying him as the victim of partisan Republicans. [Video after the jump. Audio can be found here.]
For conservatives, one of the bright spots of the Occupy Wall Street protests was when millionaire investor Peter Schiff went down to Zuccotti Park with video camera and a sign reading "I Am The 1% - Let's Talk."
On Tuesday, I had the pleasure of speaking with Schiff by telephone in a sweeping interview about his experience at OWS, how the financial media are doing, and ending with his rather frightening view of the economy and the future of our nation (video follows with transcript):
At the Washington Post's "with Bloomberg" Business section, the self-described locale "Where Washington and Business Intersect," a Wednesday item by Neil Irwin ("Fed downgrades growth forecasts, sees high unemployment for years ahead") told us that "The Federal Reserve sharply downgraded its projections for the U.S. economy," but never cited any projected growth numbers. Seriously.
Having learned what they are for 2011 and 2012 in the seventh and eighth paragraphs at an Associated Press item (well, at least they got to it, though it probably won't make it into many broadcasts of AP's content because of its placement), it's understandable why staunch defenders of Team Obama would resist doing so. After the jump, I'll take out the mystery by getting to the AP's numbers first:
Former House Speaker Newt Gingrich during Tuesday's Republican presidential debate once again went after one of his favorite targets - the media.
In response to a question about the Occupy Wall Street protests, Gingrich said, "Everybody in the media who wants to go after the business community ought to start by going after the politicians who have been at the heart of the sickness which is weakening this country (video follows with transcript and commentary, file photo):
Syndicated columnist Charles Krauthammer on Friday said one of those truly memorable lines he comes up with from time to time.
Speaking about Barack Obama's decision to give his jobs creation plan before a joint session of Congress next week, Krauthammer told the host of PBS's "Inside Washington," "The same way the Federal Reserve is debasing our real currency he’s debasing the currency of presidential authority and presence" (video follows with transcript and commentary):
It often amazes that liberals in this country revere New York Times columnist Paul Krugman as being an expert economist.
Take for example Friday's intellectually challenged piece entitled "Bernanke's Perry Problem" in which the Nobel laureate accused prominent Republicans such as the Texas governor and Wisconsin Congressman Paul Ryan of preventing the Federal Reserve chairman from enacting monetary policy that would save the economy:
Economist Ben Stein had some harsh words for Republican presidential candidate Rick Perry on "CBS Sunday Morning."
Responding to comments the Texas governor made earlier in the week concerning Federal Reserve Chairman Ben Bernanke, Stein said, "I hope he'll get some moderation in his speech, and some lessons in economics, and soon" (video follows with transcript and commentary):
We've just spent the past month or so having politicians and the press tell us that if there was no debt-ceiling deal by August 2, the government might default on its debts (of course, Tim Geithner and Barack Obama could indeed have strategically defaulted if they had wished, but work with me here).
But Sunday on Meet the Press, in a remark I expect will not be relayed much if at all by the rest of the establishment press, Alan Greenspan said that default is impossible -- which puts him directly at odds with the rest of Washington's elites and Ben Bernanke, his successor as Federal Reserve chairman. On July 14, Bernanke said: "A default on ... (U.S. Treasury) securities would throw the financial system ... potentially into chaos."
Wait until you see the reason why Greenspan says default is impossible, as carried at CNBC's web site in an item by Patrick Allen:
The AP's coverage of the U.S. economy late Friday focused on high gas prices as the dominant, uh, driver of this year's anemic growth both visually and in its text.
As will be seen after the jump, the graphic at the AP's national site is of a gas price sign. The final sentence in the caption of the full-size version reads "High gas prices and scant income gains forced Americans to sharply pull back on spending."
The underlying report by Christopher Rugaber and Paul Wiseman predictably mentioned gas prices first and foremost, tagged debt-ceiling negotiations as a suddenly important contributor to economic uncertainty (where have they been while President Obama, his cabinet, his czars, and his hyperactive regulators have been injecting uncertainty in megadoses during the past two years?), and relayed Ben Bernanke's months-old warning that cutting back too much on government spending would hinder economic growth:
When the Associated Press's Paul Wiseman and Martin Crutsinger team up for a report on the economy, there's no limit to the comic potential.
Today, in covering what the folks at Zero Hedge described as "Ben Bernanke's 'I Have No Idea Why The Economy Will Get Better But It Will' Speech" (transcript is at link), the AP pair may have set a new world record for most unused words one would expect to be employed in a report on the condition of the economy.
Readers will not find the following words, all of which bear at least somewhat on why the economy is currently failing to live up to expectations and to meaningfully rebound nearly two years after the official end of the recession, in the wire service's report:
Last week, in a much-discussed, open, live, televised forum, Jamie Dimon, the CEO of JPMorgan Chase, asked Federal Reserve Chairman Ben Bernanke the $64 trillion question. While most commentators focused on the apt question, it was Bernanke's answer that shocked me when I heard it — and ought to shock the nation much more than it so far has.
Question: "Now we're told there are going to be even higher capital requirements, and we know there are 300 (financial regulatory) rules coming, has anyone bothered to study the cumulative effect of these things? And do you have a fear — like I do — that when we look back and look at them all that they will be the reason that it took so long for our banks, our credit, our businesses and most importantly, our job creation, to start going again? Is this holding us back at this point?"
I’ve written several articles skewering HBO for producing political projects destined to air immediately prior to the 2012 election, where the vast majority of the cast and crew are passionate Barack Obama supporters, and where the content is aimed at the Democrat’s two favorite Republican villains: Sarah Palin and Dick Cheney. So, when I sat down to watch HBO’s Too Big to Fail, I prepared myself for the worst. What I didn’t expect was the big surprise awaiting me.
Too Big to Fail, which premieres on HBO on May 23, 2011, features a star studded cast recounting the events that led to the financial crisis and bailouts by the U.S. government in 2008. It is a mini-series packed into a 98-minute made-for-television movie where several essential characters are quickly introduced and where finance and economics are casually discussed. It may help if one has a baseline of knowledge about the crisis before watching the movie. If one doesn’t know who Henry Paulson, Ben Bernanke, and Timothy Geithner are or what Lehman Brothers, Goldman Sachs, and AIG are, it may prove slightly difficult to follow.
Although the Director, Curtis Hanson (L.A. Confidential, 8 Mile), was limited to telling a very long and complicated story in a very short amount of time, he was able to skillfully pull it off. Perhaps this is because the screenwriter, Peter Gould (Breaking Bad), deftly adapted Andrew Ross Sorkin’s 2009 prize winning New York Times Bestseller, Too Big to Fail.
Perhaps you hadn't noticed, but in late August 2010 Ben Bernanke took on complete responsibility for everything -- especially everything mediocre or bad -- that occurs in the economy.
I know this because on August 27 and 28 (covered here and here), the Associated Press issued three reports essentially telling readers that it was up to Ben to save us. There wasn't anything Barack Obama, Tim Geithner, Nancy Pelosi, Harry Reid, or then-present Larry Summers could possibly say or do to improve the economic situation, described at the time as "appears to be stalling" in one of those AP items.
Out of this came what has come to be known as "QE2" (the second round of "quantitative easing"), otherwise known as "electronically printing money to buy U.S. debt because possibly no one else will."
As oil and gas prices head to new highs, we're hearing more calls from the President and his media minions about how this is all the fault of Wall Street investors.
On "Fox News Sunday," the Weekly Standard's Bill Kristol said the two biggest speculators who have damaged the U.S. economy are President Obama and Federal Reserve chairman Ben Bernanke (video follows with transcript and commentary):
Last Friday, in what one would think would be a bombshell story headlined "Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak," Bloomberg's Bradley Keoun and Craig Torres reported that foreign banks secretly and routinely tapping the Federal Reserve's "discount window" lending program, primarily in 2008 and 2009. Some specifics:
"(The) loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya."
Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch ..."
"Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion."
"...foreign banks ... (accounted) for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record."
Fed Chairman Ben Bernanke fought for two years to keep the information secret after Bloomberg filed a Freedom of Information Act request in 2009. The Bloomberg report quotes Bernanke as claiming in April 2009 that disclosure "might lead market participants to infer weakness."
In the Bloomberg report, Congressman Ron Paul is quoted making a prediction that has sadly been way off the mark:
At the Associated Press late Sunday afternoon, reporter Paul Wiseman, who may have the most inappropriate last name in the history of business journalism, engaged in a brazen "It's really not that bad" excuse-making exercise on behalf of the economy Barack Obama, Nancy Pelosi, Harry Reid, and Ben Bernanke have created. In the process, he joined a Reuters reporter in questioning the validity of the information Friday's Employment Situation Report.
When you increase demand for something, its price should go up.
In the case of bonds, if the demand for them increases, their price should go up, and their effective interest-rate yield should go down.
That didn't happen on Friday when the Federal Reserve began executing its second round of "money from nothing" quantitative easing. Even though the Fed increased demand, bond prices went down and yields went up.
Why? If you read a late Friday afternoon report by the Associated Press's Matthew Craft you essentially get a bunch of blubbering "I don't know" statements (bolds after headline are mine):
On NPR's Morning Edition on Monday, anchor Steve Inskeep welcomed a regular guest, Wall Street Journal economics editor David Wessel (from the liberal news side, not the conservative opinion-page side). The new Congress is already too "shrill" and "ugly" with libertarian argument against Federal Reserve chairman Ben Bernanke's printing money to buy government bonds:
INSKEEP: Rand Paul is a name that got a lot of attention in the election this past Tuesday. He won a Senate seat from Kentucky. But, of course, his father, Ron Paul, ran for president a couple of years back, is still in the House, and it looks like he's going to chair the committee that oversees Ben Bernanke's Fed.
WESSEL: That's right. Ron Paul, who wrote a book called "End the Fed" - so you know what he thinks ought to happen. He'll definitely give Mr. Bernanke a hard time, but he's really seen as something of an outlier. He's a Libertarian. He doesn't believe in paper money. And I don't think many of the other Republicans are quite comfortable with that view. But it will be interesting to have him in the House and his son, a senator from Kentucky, taking a seat that was vacated by another shrill critic of the Fed, Jim Bunning. So, it will be a lot of fireworks there, I'm sure.