Bernanke doesn't care about high unemployment, Daniel Gross says, perhaps because the Fed is "simply exhausted... having used up all its resources in saving the system," or it's a "failure of imagination." Either way, he says, "expecting this Fed to have a sense of urgency about the unemployment rate may be as futile as looking for a Cadillac at the bottom of a Cracker Jack box." [View news story]
The Fed received the dual mandate of keeping price stability and employment high back in 1946. The US had lost over 3.6m jobs (out of a population of of 140m) over the last two years as war-time factories were being shut down.
At the time it looks to have been a simple Act that was good for the country but the Act has been obviously outlived. You won't hear a negative speech form any Fed member on having too much responsibility but Donald Kohn did remark back in May that he was unsure if monetary policy was the right tool to ensure that both mandates could be met.
If the Fed really wanted to create jobs today they could just hire and add to their $2.5t balance sheet as what is another few billion? They have proven that their staffing levels are inadequate.
Congress should change the mandate the next time that we are in a 'new economy' but as the Fed says 'we can't spot bubbles with confidence'.
The eurozone crisis underscores China's need to rebalance its economy, U.S. Secretary of Commerce Gary Locke tells investors in Beijing this morning, pressing again for a more flexible yuan. "You need to export less to other countries. And now that you're affected by the EU, it is all the more urgent to not be so reliant on exports to build your economy and instead to increase your domestic consumption." [View news story]
Totally absurd. We should be thanking China right now. Can you imagine if they were in debt as much as we were? The quickest way to have equities and bonds both be in a bear market is having China/Japan walk away from our Treasuries. That would not be good for the housing market or anyone's economy.
Bernanke doesn't care about high unemployment, Daniel Gross says, perhaps because the Fed is "simply exhausted... having used up all its resources in saving the system," or it's a "failure of imagination." Either way, he says, "expecting this Fed to have a sense of urgency about the unemployment rate may be as futile as looking for a Cadillac at the bottom of a Cracker Jack box." [View news story]
At the time it looks to have been a simple Act that was good for the country but the Act has been obviously outlived. You won't hear a negative speech form any Fed member on having too much responsibility but Donald Kohn did remark back in May that he was unsure if monetary policy was the right tool to ensure that both mandates could be met.
If the Fed really wanted to create jobs today they could just hire and add to their $2.5t balance sheet as what is another few billion? They have proven that their staffing levels are inadequate.
Congress should change the mandate the next time that we are in a 'new economy' but as the Fed says 'we can't spot bubbles with confidence'.
The eurozone crisis underscores China's need to rebalance its economy, U.S. Secretary of Commerce Gary Locke tells investors in Beijing this morning, pressing again for a more flexible yuan. "You need to export less to other countries. And now that you're affected by the EU, it is all the more urgent to not be so reliant on exports to build your economy and instead to increase your domestic consumption." [View news story]