Ben Bernanke

[scaredyclassic]

his beard is well groomed.

[Rich Toscano]

[quote=scaredyclassic]his beard is well groomed.[/quote]

It is. And to be clear, I think he is probably a good guy who has/had the best of intentions. I just think he and most of the Fed have a blind spot to their own role in the boom/bust cycle, and that very bad things have come of that blind spot (and will yet again).

[scaredyclassic]

i doubt they have good intentions. i think the beard was used to inspire faith. it is a wise beard, dense with hidden meaning. im pretty sure that beard is no “accident”.

[The-Shoveler]

There is no growth without inflation IMO.

Right now the biggest issue with rents being high and house prices being high is lack of new builds and millennials coming of age as fast (or faster) than the boomers did during the 80’s.

Low prices will not get more housing built.

Nor will restrictive zoning.

[FlyerInHi]

[quote=The-Shoveler]There is no growth without inflation IMO.

Right now the biggest issue with rents being high and house prices being high is lack of new builds and millennials coming of age as fast (or faster) than the boomers did during the 80’s.

Low prices will not get more housing built.

Nor will restrictive zoning.[/quote]

Very on point. The big apartment complexes are able to charge high rents around the country. My from told me that it’s $1200 for a 1/1 in Tampa. Makes San Diego seem cheap, when you compare to purchase price.

[spdrun]

Growth is another term for “cancer.”

[FlyerInHi]

Many economists see themselves as doctors of the economy. They fix what ails us.

If you complain about lethargy, the doctor will give a booster. If you have a tumor, he will cut it out. But a doctor can’t enforce good lifestyle habits from cradle to grave.

In the economy, it’s the job of politicians to build institutions and develop good habits. The Fed reacts to events and applies medication as needed.

[FlyerInHi]

[quote=Rich Toscano]AND ANOTHER THING. (While I am apparently ranting). I am mystified as to why left-leaning/progressive folks seem to be the loudest of Bernanke’s cheerleaders.

All things equal, high asset prices enrich the “haves” and do nothing to benefit the “have nots,” thus widening the wealth gap.

Bernanke’s policies appeared to have a minimal impact on real economic growth (once the liquidity crisis was past), but they resulted in an EPIC boom in US financial asset valuations. Thus, almost definitively, it seems to me, widening the gap between the haves and have nots. (And, on a relative purchasing power basis, benefiting the rich at the expense of the poor).

Yet the people who are most concerned with the plight of the have-nots seem to generally LOVE Bernanke. I just don’t get it.[/quote]

True that monetary easing dumps money at the top hoping for a trickle down.

But Bernanke did advocate for strong fiscal policies which never came about. Certainly, his advocacy was never as forceful as Paul Krugman’s.

Here’s what Barbara Boxer said about Bernanke:

What about a vote that you regret?

“… And I also regret not voting for Ben Bernanke, because he was really, really the one who helped us save this economy … I just thought he was part of the problem because he had been serving, you know, there for so long during the crisis and never spoke up when the bubble happened. So I cast that vote not knowing that he, as a student of the depression, knew that we really needed strong fiscal action, so he was really good. So I guess that’s the one I regret the most.”
http://hereandnow.wbur.org/2015/10/28/senator-barbara-boxer

Obviously, Boxer’s no confirmation vote didn’t affect the outcome of Bernanke’s appointment, so she could have easily remained silent. But for Boxer to choose that vote as the one she regretted most is a great compliment to Bernanke.

[joec]

I’m still waiting for the Ben helicopter to drop some money my way…if they want stimulus, maybe allow people who weren’t able to refinance, but have great credit and never lates to just get a lower rate, no questions asked. They already own our loan anyways…

Not like we’re asking for a principle reduction…

That, or let’s just start going negative rates and start penalizing the savers (and banks!) even more to even hold cash…

Welcome to Japan in the US for the next 20 years…No rate hike today, now it’s coming in Dec?

[Anonymous]

The influence of the Fed is vastly overstated.

It’s a convenient target because we can point to one person and assign blame and/or credit.

The Fed has one dial to turn. That dial doesn’t control the entire economy.

[Anonymous]

[quote=Rich Toscano]AND ANOTHER THING. (While I am apparently ranting). I am mystified as to why left-leaning/progressive folks seem to be the loudest of Bernanke’s cheerleaders.

All things equal, high asset prices enrich the “haves” and do nothing to benefit the “have nots,” thus widening the wealth gap.

Bernanke’s policies appeared to have a minimal impact on real economic growth (once the liquidity crisis was past), but they resulted in an EPIC boom in US financial asset valuations. Thus, almost definitively, it seems to me, widening the gap between the haves and have nots. (And, on a relative purchasing power basis, benefiting the rich at the expense of the poor).

Yet the people who are most concerned with the plight of the have-nots seem to generally LOVE Bernanke. I just don’t get it.[/quote]

Given the choice between a widening income gap and an economic depression, I think those in the lower wealth strata would be better off with the former.

Bernanke was a student of the great depression. The depression was more than a housing bust, it was a humanitarian crisis. People died of hunger. The poor and middle class were hit incredibly hard. I think it is not likely that a depression today would lead to food shortages in the US, but I would not want to see this theory tested.

Perhaps government policies during the recession did kick the can down the road. But there was a real risk of an economic collapse that could have escalated into actual hardship and suffering (more than folks losing their tract housing and having to move into apartments.)

The Fed policies helped the rich get richer, but perhaps that was necessary to prevent the poor from going bust.

[Anonymous]

[quote=harvey]

The Fed policies helped the rich get richer, but perhaps that was necessary to prevent the poor from going bust.[/quote]

Wow, way to drink the Fed Kool-Aid Harvey. Sounds like something I would hear at a Republican debate.

[Rich Toscano]

Harvey, I’m not talking about during the crisis, I’m talking about after the crisis. The easy money continued for Bernanke’s entire tenure, years after the risk of “economic collapse” had passed. That’s the period I’m talking about.

[Anonymous]

[quote=Rich Toscano]Harvey, I’m not talking about during the crisis, I’m talking about after the crisis. The easy money continued for Bernanke’s entire tenure, years after the risk of “economic collapse” had passed. That’s the period I’m talking about.[/quote]

So how did Fed policy after the crisis increase the wealth gap? I’m not saying it did not contribute, but I’m not sure I understand arguments that it did.

My personal take is that the wealth gap data we are seeing in recent years is a phenomenon caused by forces much bigger than even the Fed. Globalization and technology are the the biggest drivers. See the thread on Silicon Valley housing prices. There’s much more than easy monetary policy causing these extremes.

[Rich Toscano]

Agreed, there are many drivers, but my argument is that the Fed exacerbated it by targeting higher asset prices, which disproportionately benefits the rich. (And they did target higher asset prices as a direct goal of their policy; they’ve said as much themselves).

[Author]

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