Matt Yglesias

But I also think, just like Alan Blinder, that in the short term a bigger deficit would be helpful.
Really? Like two or three trillion? And when that doesn’t work, four or five trillion?
Tsk.

But I also think, just like Alan Blinder, that in the short term a bigger deficit would be helpful.
Really? Like two or three trillion? And when that doesn’t work, four or five trillion?
Tsk.

Bernanke wants to see Public Employee Compensation cut 25% overall from $1.6T to $1.2T, through productivity gains.

Also, Sumner is correct, the Fed sterilizes Fiscal stimulus, of course they would…. they are Republicans.

Bernanke wants to see Public Employee Compensation cut 25% overall from $1.6T to $1.2T, through productivity gains.

Also, Sumner is correct, the Fed sterilizes Fiscal stimulus, of course they would…. they are Republicans.

I’m always curious about the progressive desire to paint those Obama actions they deem undesirable as “mistakes”. Are we to believe that Obama and his gang are not as bright and talented as you preached during the campaign? Or does Obama suffer from some dissociative disease that causes him to just go off the deep end? And remind me please, just what was it that forced Obama, against the Left’s advice and concerns, to reappoint Bernanke?

Isn’t it far more respectful of the President and the whole Dimocrat narrative to accept that Obama has acted to produce the results he sought? Does anyone believe that something like “I know he’s a conservative tool but he’ll shape up once I hire him” actually entered into Obama’s thinking?

If you actually accept that Obama did not know what he was getting in Bernanke then that is a far more damning critique than anything the Right has produced and, if true, calls for his impeachment on grounds of disabling incompetence.

Blinder probably is better able to opine about Bernanke’s thinking than most. As to what Bernanke has said or can say, bear in mind that he’s not some blogger who can yammer away about whatever pops into his head, and then ignore the comments that will play out after a couple of hours anyway as the shiny ball rolls somewhere else. This is really an ignorant, naive post.

“But I also think, just like Alan Blinder, that in the short term a bigger deficit would be helpful.”

Oh horseshit.

Measured by peak unemployment, the 1974-75 and 1982 recessions were just as deep as this one. Yet the economy recovered quickly from both despite much higher interest rates and smaller fiscal stimulus (deficit as percent of GNP). Some of us know what explains the difference. When Matt can he’ll be onto something.

82 was deliberate, caused by high interest rates engineered by the Fed in response to inflation. 74-75 was largely the oil embargo and energy cost spikes. The three are very different events. That we are stuck with one word (recession) for all of them is unfortunate, and muddles the thought of many, I think.

82 was deliberate, caused by high interest rates engineered by the Fed in response to inflation. 74-75 was largely the oil embargo and energy cost spikes. The three are very different events. That we are stuck with one word (recession) for all of them is unfortunate, and muddles the thought of many, I think.

Measured by peak unemployment, the 1974-75 and 1982 recessions were just as deep as this one.

Measured by total employment (not the unemployment rate which doesn’t consist of the same people month to month) losses this recession are much much deeper. You’re making an apples to oranges comparison.

Some of us know what explains the difference.

Goody. Tell us.

max
['Let's hear it.']

kafka you’ve shown time and time again that you don’t understand anything about anything. we don’t need further evidence

kafka you’ve shown time and time again that you don’t understand anything about anything. we don’t need further evidence

If you actually accept that Obama did not know what he was getting in Bernanke

I’d say that he clearly didn’t think Bernanke would act as a policy activist for the other side.

then that is a far more damning critique than anything the Right has produced and, if true, calls for his impeachment on grounds of disabling incompetence.

Does not follow. Presidents makes mistakes just like everyone – that usually isn’t grounds for impeachment, unless you’re just like a Republican in merely looking for any excuse to short-circuit the political process and as a consequence have become impeachment happy.

And giving us Joe Biden as President will not automatically result in our transportation to left-wing paradise, contrary to certain opinions.

max
['Oh, not this again.']

Presumably for the same reason that he’s consistently acted like a conservative Republican in other regards over the past two years—he’s a conservative Republican.

Ayup.

Giving the most important economic policy job in the country to someone who doesn’t share his values, ideology, and partisan loyalty was a big big big mistake and it’s reflected in Bernanke’s conduct around questions like this one.

We get to file this one under live and learn. The question is then if Bernanke is willing to act to protect the economy, even if he’s willing to let the Democrats go hang during the election.

max
['I really hope he doesn't prove my worst suspicions correct.']

I’d say that he clearly didn’t think Bernanke would act as a policy activist for the other side.

When did you start reading minds?

Bernanke is willing to act to protect the economy

I’m not sure I accept the idea of “an economy” anymore, says as measured by GDP. There are sectors and interests, and one person’s deflation is another’s inflation.

Wage disinflation with asset inflation excluding the category of housing because that market remains depressed will mean another round of massive upward distribution. We have reasons to believe that this what Bernanke and Obama intend.

In Jackson Hole, Bernanke did say the Fed can’t save the economy on by itself. So that should be given equal footing with his deficit talk. In his Congressional talk he has said deal with the deficit in the medium term when asked by Republicans. Matt’s seeming to stack the deck here.

Plus many people like Krugman, Thoma etc. say QEII won’t help. Having the Chairman of the Fed call for fiscal stimulus would be unprecedented. I’m all for having high standards but lets portray the situation with some accuracy.

Last thing first… sorry but I was being a tad hyperbolic with the impeachment line but it’s interesting that, as I was noting, you proffer the “mistake” excuse with absolutely no evidence. As Christine tells Mommy, “But I’m NOT one of (his) fans!”

The idea that the Gang from Wall Street don’t all know each other heart and soul is fairly ludicrous. Geithner didn’t clue the boss in?

Now, got a barf bag? Here’s Frank Rich:
“But the Obama White House is hardly innocent. Its failure to hold the bust’s malefactors accountable has helped turn what should have been a clear-cut choice on Nov. 2 into a blurry contest between the party of big corporations and the party of business as usual. ”

Maybe the fact that Obama received more money than anyone in history from those same Wall Street malefactors might be a more honest answer, no? Why is it not even mentioned by Rich in his long ramble?
Oh I know… he might then have to detour into explaining why Obama still hasn’t revealed all his donors and set up a system specifically to avoid reporting requirements to boot.

But thanks max, I always enjoy what you post especially if I think I disagree.

Exactly. The Fed Funds rate was 20% in 1981. That tells us nothing about the desirability of fiscal stimulus when interest rates are at the zero bound.

Like many Liberal Democrats, I feel that Obama has spent too much time trying to manage the optics of appearing non-partisan. (ie not replacing the Fed Chairman, Pre-emptively adding conservative policy to bills.

I blame the Democrats who nominated Obama. To paraphrase somebody or the other:

Giving the most important economic policy job in the country to someone who doesn’t share their values, ideology, and partisan loyalty was a big big big mistake and it’s reflected in Obama’’s conduct around questions like this one.