John Paulson endowed a chair at New York University in the name of Alan Greenspan. Greenspan's naivety led to Paulson trading into a vast fortune. The chair, a back-handed reward. Bernanke, his successor, sought to fight an economic war from about 80-years earlier. He did so with a failed understanding of the focus of his academic work, The Great Depression. Bernanke allowed absurdly low interest rates and instituted quantitative easing. Both disasters will haunt generations to come. Bernanke, with Yellen's statement of principles, instituted a 2% inflation target, ensuring the perpetual loss of value to the US Dollar. Under Powell, the inflation target of 2% was made an Average, which begat "transitory" and abandonment. Also under Powell, the Federal Reserve Board of Governors lowered the Fed Funds rate by an emergency level 50bps, two-months ahead of a presidential election. They would go onto cut rates by 25bps in November and December because, well they had to to cover its election interference.
This is far from some august independent body. It is a disaster. It is grotesque in the post bribes allowed to Bernanke and Yellen in the form of speaking fees and sinecure. The trading scandals are unbelievable. Rules rightly restricting the activities of the lowest level of banking employees, are not placed at the Federal Reserve. It is a body that allowed the behavior of John Harold Rogers to exist and continue. The lack of oversight itself being criminal. https://www.justice.gov/opa/pr/former-senior-adviser-federal-reserve-indicted-charges-economic-espionage
"Why not use the Fed to guarantee loans of favored companies? It’s easy to imagine that a Trumpian Fed would monetize, or guarantee, his pet crypto assets."
-- Can the Fed do this under Dodd-Frank? Thought it disallowed bailing out individual companies.
Exactly correct analysis, historical summary and recommendation. Trump currently uses the entire US money supply as his personal ATM. The Senate should be a strong guard-rail to keep our economy from falling off a cliff.
John Paulson endowed a chair at New York University in the name of Alan Greenspan. Greenspan's naivety led to Paulson trading into a vast fortune. The chair, a back-handed reward. Bernanke, his successor, sought to fight an economic war from about 80-years earlier. He did so with a failed understanding of the focus of his academic work, The Great Depression. Bernanke allowed absurdly low interest rates and instituted quantitative easing. Both disasters will haunt generations to come. Bernanke, with Yellen's statement of principles, instituted a 2% inflation target, ensuring the perpetual loss of value to the US Dollar. Under Powell, the inflation target of 2% was made an Average, which begat "transitory" and abandonment. Also under Powell, the Federal Reserve Board of Governors lowered the Fed Funds rate by an emergency level 50bps, two-months ahead of a presidential election. They would go onto cut rates by 25bps in November and December because, well they had to to cover its election interference.
This is far from some august independent body. It is a disaster. It is grotesque in the post bribes allowed to Bernanke and Yellen in the form of speaking fees and sinecure. The trading scandals are unbelievable. Rules rightly restricting the activities of the lowest level of banking employees, are not placed at the Federal Reserve. It is a body that allowed the behavior of John Harold Rogers to exist and continue. The lack of oversight itself being criminal. https://www.justice.gov/opa/pr/former-senior-adviser-federal-reserve-indicted-charges-economic-espionage
I don't like any of it.
Great, if terrifying, piece--as usual. Thank you, Roger, for tackling this topic and making it accessible to all.
"Why not use the Fed to guarantee loans of favored companies? It’s easy to imagine that a Trumpian Fed would monetize, or guarantee, his pet crypto assets."
-- Can the Fed do this under Dodd-Frank? Thought it disallowed bailing out individual companies.
Exactly correct analysis, historical summary and recommendation. Trump currently uses the entire US money supply as his personal ATM. The Senate should be a strong guard-rail to keep our economy from falling off a cliff.