Mean Street: Ben Bernanke Tells Paul Krugman and Robert Reich to Shove It On Jobs Stimulus

Mean Street: Bernanke Tells Krugman to Shove It
By Evan Newmark
June 9, 2010

Krugman believes it is “folly” and “crazy” to demand “fiscal austerity” given the weakness of the global economy.

So what did a sober and even-keeled Chairman Bernanke call for today in his testimony before the House Budget Committee?

“In the absence of further policy actions, the federal budget appears to be on an unsustainable path….to retain the confidence of the public and the markets, we should be planning now how we will meet these looming budgetary challenges.”

Got that? “Retain the confidence of the public and the markets.” Planning “now”. Not later.

In other words, to Paul Krugman, Robert Reich and the rest of the stimulus-happy Keynesians, “you can go shove it.”

Forget about more stimulus. America has to get its fiscal act together ASAP.

It took Charles Djou, the new Republican Congressman from Hawaii, to put it bluntly to Bernanke. Should there be “additional fiscal stimulus?”

And Bernanke answered as bluntly as a Fed Chairman ever will, “If you (Congress) decide to do more fiscal stimulus, then it would be very helpful to combine that with a plan for a fiscal exit strategy.”

Everyone in that hearing room got the joke. Congress not only has no plan for a fiscal exit strategy. It can’t even be trusted to come up with one. That’s why we now have a presidential bipartisan debt commission.

In effect, Bernanke was saying “Read my lips. No more stimulus.”

Krugman may consider Bernanke’s skepticism on the stimulus insane. Just as he may consider the market’s obsession with deficits overwrought. But in the end, the markets get what the markets want. Just ask the Greeks. And the Hungarians. And the Brits.

Read the full article at:

http://blogs.wsj.com/deals/2010/06/09/mean-street-bernanke-tells-krugman-to-shove-it/

It looks like Wall Street and their political whores are really looking forward to getting the presidential bipartisan debt commission proposals to cut Social Security, Medicare and Medicaid. The commission might also propose new taxes such as a national sales tax (value added tax) that will primarily hit the working and middle class and not the rich so much.

The United States government will follow the lead of European rulers on cutting deficits by imposing harsh austerity measures that will drastically reduce the living standards and health care of working people and the elderly.

It will be a bi-partisan affair. BBI

I feel like I'm just exhausted with the rhetoric sometimes.

This is not a reflection on the content, just the packaging.

They love the way liberal economists are being marginalized and shoved aside by most in Congress.

The bloated military budget? Off limits.

:grr:

and by extension, their "kind" (aka the wealthy).

If they could accomplish a complete market recovery and leave the other 290 million Americans in a depression that would be fine with them.

The dow is now moving toward bear market territory.

to pay for it.

The way out of the recession is simple... the answer is there in plalin view.

Problem is.. (as others in this thread have pointed out) .. the only solution Bernake can 'see' is the one that stuffs cash in the Banksters pockets.

is military spending.

I know, I know, it's crazy, right?

The Cold War has been over for two decades.
Withdraw from Germany. Furlough the generals. Phase out a few battalions.

when you have 3%+ GDP growth, then the need for stimulus dissipates. Stimulus was vital when we were getting negative GDP numbers in 2008 and early '09. What he's saying is that if you let our budgetary situation get to the point of panic in the bond market and those entities who keep gobbling up our debt demand that we balance revenues and spending, it gets much more expensive. That's what is happening now with the PHIIGS, they're forced to implement very sever austerity measures where had they done it outside of the current panic environment, the steps would not have been as severe or costly.

The problem is $135 Trillion (with a T) in Credit Default Swaps floating around the world waiting to explode.

Credit Default Swaps and Naked Derivatives allow the Hedge Funds and Vampire Bankers to go around the world(PHIIGS) sucking the life out of every last living economy. (All BTW.. W/O using a dime of their own money)

Unless Credit Default Swaps are outlawed and Glass-Steegal re-instated.. there can be no recovery.. no how.. now way.

Outlawing CDS and Derivatives will in effect be like: Calling the bank and stopping payment on bad checks. It will make Goldman Sachs eat the loss.. instead of loading it off on women and children sleeping in tents and making Grandma eat cat food.


** Notice last week, when Germany outlawed CDS.. their economy started to improve. IMMEDIATELY.. little Timmy Geithner was over there making threats and cajoling the German government to reverse their decision. WHy do you think Geithner was doing that?

... GDP growth is a complete fiction. Sorta like the absurd oxymoron "jobless recovery".


Things are not appreciably better than a year ago, it's just that the Fed/Treasury are running out of silver bullets.

Main Street can go fuck itself. No money left. And while the banksters took the stimulus money to soften the blow of their own ruinous financial shenanigans, the cash window closes just as the folks who actually work to create the nation's wealth step up. Thanks, Helicopter Ben!

After all, what would working people do with a job and earned income besides spend it locally on consumer goods instead of distributing it to overrich fatcats who will send money whizzing around the globe in an eternal search for an additional fraction of a percent ROI?

Not in a literal sense.

Bernanke: "This very moment is not the time -- to radically reduce our spending or raise our taxes"

"This very moment".

Was he checking his watch when he made that comment?

:)

I don't trust that Wall Street whore for one second!

You shouldn't either.

Just moderately cut spending now and radically cut it after the mid-terms when more Republicans will be in Congress.

His words and position on cuts are clear.

He's for program cuts .... just not on the day of his testimony or perhaps until near the of this year.

He's Wall Streets boy.

However, if you really trust him and believe he would not support any economic policy that favors Wall Street over Main Sreet and working people, you do so at your own peril.

That would be very naive on your part .... in my not so humble opinion.

and spend half of that on infrastructure and job creation at home. I think this is pretty much a no brainier but I'm sure if someone in power suggested it they'd probably be assassinated.