CHARLIE
ROSE AND BERNARD SCHWARTZ . JohnGelles 08/11/2010 05:32 AM [From the NY Times:] Ben S. Bernanke, the Federal Reserve chairman, and other officials believe that the Fed has the ability to avoid deflation. ..... ..... .....By SEWELL CHAN ..... ..... Published: August 10, 2010 WASHINGTON — Federal Reserve officials, acknowledging that their confidence in the recovery had dimmed, moved again on Tuesday to keep interest rates low and encourage economic growth. They also signaled that more aggressive measures could follow if the job market and other indicators continued to weaken. Economix Blog: Fed Brings Out the Medium-Size Guns (August 10, 2010) Floyd Norris Blog: The Fed Is Worried .... (August 10, 2010) With short-term interest rates already close to zero, the Fed’s policy makers have relatively few tools available to encourage consumer and corporate spending. So they now plan to use the proceeds from the Fed’s huge mortgage-bond portfolio to buy long-term government debt. That action may put downward pressure on long-term interest rates and stimulate borrowing. For consumers, it means mortgage rates are likely to remain at record lows for some time. Though the immediate impact is likely to be modest, the decision is a turnabout from only a few months ago, when officials were discussing when and how to begin to raise interest rates and gradually shrink the $2.3 trillion balance sheet amassed through the Fed’s response to the 2008 financial crisis. In buying at least $10 billion a month in new Treasury securities — a small fraction of the roughly $700 billion in Treasury debt the Fed holds — the central bank is trying to help keep money readily available in the financial markets. With Congress seemingly unable to agree on substantial new stimulus spending, the Fed could face a far tougher decision later this year: whether to take more drastic steps to pump money into the economy and make credit even cheaper. “We’re in a lousy middle between the economy picking up on its own and falling off a cliff,” said Cathy E. Minehan, a former president of the Federal Reserve Bank of Boston. “And that makes policy-setting really hard.” The announcement on Tuesday, after the scheduled meeting of the Fed committee that sets interest rates and monetary policy, confirmed what had been widely discussed among economists and business leaders in recent days: the Fed would move more decisively if the economic picture darkened. . ============================================= END: NY Times on Quant. Easing. vs. Deflation ============================================= This is a way we can avoid borrowing and tax collections on a fast track to recovery if the Fed insists. Of course Congress and the President must use the money for infrastructure, energy independence, R&D, housing or other effective purpose for Quantitative Easing to have the desired effect. We want it to speed recovery of the high pay wage economy as well as the whole economy. We want back our prosperity to protect our democracy from its enemy called downward spiraling deflation-- a race to the bottom between you and yourself. . JohnGelles 08/10/2010 08:48 PM[continued from JG 08/10/2010 08:34 PM]. Since Wikipedia will not accept my plan as fact, I have to use the CR Sow to expose it to other people. However, I might have to use many forums to gain exposure. Wikipedia is not the fountain of knowledge the world needs so badly. My plan includes inflation protected (COLA'd or indexed to keep up with prices) cash SAVINGS. This feature alone is a winner. It would mean the working class did not get screwed as inflation diminishes savings and demands risk in a crooked game that needs cleaning up. My plan also creates a government intelligence agency as big as the IRS. Its purpose is not to steal your wages-- just the opposite-- its purpose would be to guarantee that your wages were steady and high by applying logistical science to law and economics-- to correct the abuses of the finance profession in recent crises. JohnGelles 08/10/2010 08:34 PM[continued from JG 08/10/2010 08:24 PM]. The reason my plan is far better than the JOBS GUARANTEE in Wikipedia is that high skilled high wage unemployment would be STOPPED DEAD in its tracks. In our culture, putting the high wages back on track would end the deficit in demand hurting the middle class. My plan also ends income and all other taxes. Taxes make sovereign government the enemy of the elites who run it well, or, pissed off and unmoved by common interest, run it into the ground. Where we are at this very moment. [to be continued] JohnGelles 08/10/2010 08:24 PM[continued from JG 08/10/2010 08:12 PM]. My plan is for government to invest heavily in BIG NECESSARY DRAMATIC PROJECTS with the urgent appeal of something as big as preventing war, such as CREATING THE HYDROGEN ECONOMY NOW on a scale large enough to take off with full private sector competition embracing its purposes. Such an investment would create so many jobs and so many contractors and sub-contractors that the whole economy would be rescued from deflation and less than full employment. If that did not happen, another great investment would be made in another essential area such as education, public health or housing. [to be continued] JohnGelles 08/10/2010 08:12 PM[continued from JG 08/10/2010 07:58 PM] The knowledge we need at this moment is HOW TO end the JOBLESS situation millions are caught up in-- and that threatens to turn YES WE CAN into SORRY WE COULD NOT. Wikipedia has an entry JOBS GUARANTEE that discusses a plan to create a reserve army of minimum wage workers paid by sovereign governments to unemployed people to do necessary public service. The plan is too complicated to be popularized. It is too unattractive to people laid off good jobs to gain their support. In short, it is no good-- but very logical. My plan is very similar to Bernard Schwartz' plan. [to be continued] JohnGelles 08/10/2010 07:58 PMThe following rule destroys Wikipedia's effectiveness to advance knowledge and popular education to the level necessary at all times: "No original research Articles may not contain any unpublished theories, data, statements, concepts, arguments, or ideas; or any new interpretation, analysis, or synthesis of published data, statements, concepts, arguments, or ideas that, in the words of Wikipedia's co-founder Jimbo Wales, would amount to a "novel narrative or historical interpretation." Verifiability Articles should cite sources whenever possible. While we cannot check the accuracy of cited sources, we can check whether they have been published by a reputable publication and whether independent sources have supported them on review. Any unsourced material may be challenged and removed." [to be continued] |