The Fed 400 Billion “Twisting”

>>>Is it just me, or was his heart not in it at all? He flubbed words, stuttered, stammered; I think he hated giving that speech.<<<

Didn't hear the speech, but Obama is clearly out of touch and just floundering at this point. I'm thinking that he's resigned himself to being the fall guy for the economy and by his behavior, he certainly doesn't seem to mind that. Afterall, the guy is set for life at this point, so he'll just cash in and run around making millions from speeches and appearances. To be honest, notwithstanding a trashed presidency, none of this is in anyway consequential for him personally.

I wouldn't be surprised if someone mounts a primary challenge. At this point, that won't make much of a difference either other than for entertainment value.

>>>I wouldn’t be surprised if someone mounts a primary challenge. At this point, that won’t make much of a difference either other than for entertainment value.<<<

It's rather insulting to a sitting president that he should be challenged in primary from within his own party. So by all means, I hope it happens.

An attack upon his vanity is the only stake we have to drive into him. Let's see what's behind the fluttering curtain of his fragile ego when he realizes so many of his former supporters have grown to despise him.

Not entirely on topic, but there’s this, regarding the Tea Party crackers:

“Unconventional Meeting of Minds”
Scholars and Tea Partyers gather to consider changing the Constitution

most of it is behind a paywall, but FYI.

http://chronicle.com/article/An-Unconventional-Meeting-of/129048/

>>They’re not out of bullets. There are things they could do, they just refuse to do them.<<

I think this depends greatly on the context. Yes, the government might be able to engage in some sort of meaningful stimulus to ameliorate widespread unemployment. A meaningful writedown on debts, like some sort of mortgage forgiveness might be very helpful was well. But both of these things lie outside of the purview of the Fed whose sole purpose has been to accommodate the Wall Street crowd. Both of these things are also just salve for the wounds that don't address the underlying problems.

Disaster capitalism, exhibited most directly by privatization, financialization and so called free trade, basically serves as a check on gainful employment with the main beneficiaries having purchased the entire political system lock, stock and barrel. These are the main problems and I feel that it's not just mere refusal to do the right thing. At this point, they simply can't. The economic and political systems in this country are no longer owned by the people (if they ever were) and are no longer responsive to our needs. The Obama presidency against the backdrop of the economic crisis puts that in stark relief.

There is just so much to correct. Too much in fact. And there are too many interests that are arrayed against that. Our best hope, from my perspective, is total collapse, which we seem to be well on the way towards.

As a legal matter, the most astonishing thing, truly, is AG Eric Holder didn’t resign over this;

Is Holder the least visible, least active USAG in recent memory? How far back do we have to go to find one that did less than him? AG Gonzalez was also inactive (at prosecuting crimes), but was visible thanks to his justifying admin’s crimes. Other than prosecuting whistle-blowers, what has Holder done in nearly three years?

The “collapse” has occurred. What is unfolding is the psychological realization of it.

This is a mere opinion, but I think that it is a considered one.

It happened with peak oil. Once an “imminent” danger is accepted as a possibility by more than the unfortunately prescient Cassandras of the world, it’s more than a possibility at that point – it has already happened. The imminence is really only that it will finally “hit the papers,” as it were.

It happened with the current depression (remember when it was a “recession” that “might” become a depression?) It was already a depression then.

It’s happened with Anthropogenic Global Warming. Finally being accepted, we’re way past the point of doing anything about it.

Indeed, it could be argued that the fringe of Cassandras are merely watching the water circling the drain during their early, impotent bleatings – if they know anything of human nature. Which they undoubtedly do. That’s what makes them Cassandras.

We never miss anything until we’ve lost it.

Sorry for the doom and gloom. It’s cyclical anyway, it’s deep winter – at least we can contemplate the character of a long-forgotten, but surely forthcoming, spring.

>>>It is a myth that the Fed can’t do anything but what it’s doing, a myth which has been carefully spread so that it won’t do anything but give the banks money with no strings attached. Any time the Fed wants to use its leverage it can. Just force a major bank or brokerage into bankruptcy, and the rest will fall in line.<<<

Ian, I don't dispute what the Fed should do at all. I'd offer that it's not the Fed alone who should do more, but there's the entire government who should do far more. Conversely, both should also be doing far less of those things that are inimical to the interests of the people. No, there's no dispute at all about what they could and should do.

Mythology has surrounded the Fed going back some time, but particularly so under Greenspan's tenure. Our illusory pre-2007 economy was supposedly delivered courtesy of the Greenspan Fed and the one thing that's consistent in the period preceding and post the economic upheavals is a system that's been wholly centered on the oligarchs and the favored few. I'd argue that's been a constant more or less during the Fed's entire existence.

They've never considered it in their purview any sort of accommodation or consideration of the everyday person, notwithstanding their claims about unemployment concerns. I believe this is so mainly because they're owned by and represent the financial oligarchs who hold sway over our political and economic systems. Doing anything like mortgage writedowns and slapping the hands of recalcitrant bankers is simply not on the table and will never be on the table barring some sort of dramatic change that can only come from some sort of revolution.

To actually do the right thing means there would have to be an admission of all the wrong things they and the rest of our government have done. That includes the "extend and pretend" business supported by the suspension of mark to market and the stress test farce not to mention the denuding of regulations and non prosecution of rampant fraud and criminality. Righting this ship is going to involve a lot and I just don't think they're prepared to do any of that. Ultimately, the Fed is only part of an entire economic and political system that's responsible for the situation at hand. In my view, it's the system or the thinking behind it that must change and although painful for all concerned, perhaps the most direct route for that to occur is for the system to collapse on its weight.

Talk about the Fed? Criticize it? You might be labeled a domestic terrorist:

http://www.zerohedge.com/news/here-comes-fiattackwatch-bernanke-goes-watergate-prepares-eavesdrop-everything-mentioning-fed

@Lisa – I wanted to post on that story, but I can’t find anything else on it – Durden provides no links, and the rest of the web merely links to his (characteristically) hyperbolic post. Can you find anything?

A current Al Jazeera essay is noteworthy and very well written (be sure to read the first part linked just before the passage quoted below):

http://english.aljazeera.net/indepth/opinion/2011/09/20119248127283684.html

A passage from:

I now turn to some other equally if not more important deficits – ones that cannot be so readily re-negotiated, re-structured or otherwise fiddled with. In this part, I describe two physical deficits: the infrastructure deficit and the ecosystem deficit.

Rooted as they are in physical laws, they need to be taken far more seriously. Beyond that are three structural/functional deficits: the sustainability deficit, the time/jobs deficit and the equality deficit; two cognitive deficits: the critical thinking deficit and the imagination deficit; and one political deficit: the democracy deficit.

All of these deficits are vitally important for us to consider, because we ignore them at the peril of destroying civilization as we know it.

The deficits enumerated illustrate exceptionally well the “geographic” nature required for the study of the economy and its economic complexities and the need to develop a clear and concise (precise works too) language to communicate with. Another deficit is obvious as well, there being no alternative to the standard economic orthodoxy, no intellectual construct, no perceptive well from which to draw upon in the same manner as the neoliberal beliefs have been developed to render support to their cult of economic shamanism.

The great failure of neoliberal economic thought is the imprecision with which its advocates use language, the crisis has produced nothing but economic babble conveying nothing but inconsistent meanings and contradictory information all contributing to the inability to confront and solve the crisis facing the economy and the wellbeing of the world. It is the marquee signature of neoliberal ideology that these deficits are neither known nor accounted for in their firmaments or read in their interpretations of entrails on their high alters.

Without cogent understanding or cognizance of economic factors, the platform from which effective economic countermeasures to control the crisis is missing; no coherent, no consistent, no effective measures can be contrived. The machinery of governance necessary to economically function has been thoroughly co-opted or neutered, the legislative function has ceased to exist, the executive function is bought and paid for, and the judicial function is no more than a delusion; the republic is dead, its constitutional foundations do not exist in their recognizable historical form. Only a tabula rasa remains with-which to reconstruct as one will, their worldview. It will be either reflective if what exists, or it will not. May you live in exciting times. Indeed.

[Holder] should have resigned at least three times over…When the WH cut him off at the knees …When the President overruled …And, as mentioned above, the targeting of US citizens for assassination.

Compare and contrast this with that book that came out last week where we are lead to believe the Treasury dept. did whatever it wanted to do, contrary to Obama’s orders. Why is it that he is “unable” to get Geithner to do what he wants, but he’s perfectly able to get Holder to do what he wants? And yet Geithner somehow still has a job.

The third part of the Al Jazeera essay on deficits is here:

http://english.aljazeera.net/indepth/opinion/2011/10/201110275914108293.html

and the fourth part is yet to come.