Bernanke Press Conference Open Thread

I’m not even sure I’ll watch it because I’m sure I won’t understand most of it.  While fluent in C and Basic I don’t understand Fedese (if there is indeed any understanding of it and it’s not just insincere shamen babbling nonsense in tongues to confuse and impress the ignorant).

Clearly Samuelson economics works and in the words of Krugman (who only has a Nobel Prize in Economics)-

(R)ight now, we’re living in a world in which basic economics points to conclusions utterly at odds with what Very Serious People are supposed to believe, in which radical outsiders base their views on standard economics while orthodox types turn to heterodox, highly dubious speculations.

Econ 101, buttressed if you like by fancier New Keynesian models, says that contractionary fiscal policy is, well, contractionary. Yet much of the world of movers and shakers bought into the exotic notion that expectational effects – the confidence fairy – would make contractionary policy expansionary. And they clung to this belief even as the supposed historical evidence in favor of expansionary austerity was thoroughly debunked.

The blogosphere is full of intelligent questions that will never be asked but my favorite so far was propounded by Sen. Bernie Sanders (via dday).

Sanders’ report found-

(N)umerous instances during the financial crisis of 2008 and 2009 when banks took near zero-interest funds from the Federal Reserve and then loaned money back to the federal government on sweetheart terms for the banks.

The banks pocketed interest on government securities that paid rates up to 12 times greater than the Fed’s rock bottom interest charges.

“This report confirms that ultra-low interest loans provided by the Federal Reserve during the financial crisis turned out to be direct corporate welfare to big banks,” Sanders said. “Instead of using the Fed loans to reinvest in the economy, some of the largest financial institutions in this country appear to have lent this money back to the federal government at a higher rate of interest by purchasing U.S. government securities.”

Chairman Bernanke, in light of this report, do you consider it good policy for the US to hand over money to the nation’s largest banks directly through this kind of scheme? Would it make just as much sense, if you find it good for the economy, to make the same investment strategy available to small businesses, states or the US government itself to deal with their budget problems? After all, it would take a true idiot not to make fantastic amounts of money if they can borrow at zero and loan money back at high rates. Why should individuals be deprived of this money-conjuring strategy?

Furthermore, shouldn’t those profits, rather than boosting the balance sheets of the large banks, have been put back into the economy? Shouldn’t that have been a condition of the direct subsidy?

I dare someone to ask that.

Anyway, your questions and reactions below and hopefully by tomorrow we’ll have some idea of what Bernanke actually said.


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  1. CNBC graphics are just annoying.

  2. That response to the dollar question was interesting.

    We see no inflation and we need more recovery.

  3. Low inflation is more important than employment.

  4. Yawn.

  5. Time for the hook.

  6. My takeaway is that nothing happened that you couldn’t (and didn’t) predict.

  7. But I’d like to add that this effort by Bernanke (mind you, no press conference has been given by a Fed Reserve Chairman, in some 78 years, I believe it is), is nothing more or less than hyping the “deficit crisis” being fed us to push and shove us into a “fear-mongering” position, which ultimately will, once again, benefit the Wall Street criminals!

    I think there may be about 3 reasons for Bernanke’s appearance:

    1.  People are more and more angry with Wall Street and the Banks and rightfully so.  Check out Matt Taibbi’s latest article in the Rolling Stones, wherein two Wall Street wives were given $250 million to play around with from a “secret government fund.”

    2.  An attempt to restore any kind of “credibility” by our Feds therefor.

    3.  A tremendous effort to push the “budget crisis” from a Wall Street angle — in reality, support of a Ryan like proposal.  

    Scum is scum!  

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