Obvious Answer

OK, that's it. I've read the last post I'm going to read whining about Ben Bernanke's refusal to do what every rational economist on the face of the earth is screaming at him to do. 

 

There's a real simple reason why Ben Bernanke won't give the economy the small, harmless, monetary stimulus it needs to survive.

 

Ahem.

 

Ben Bernanke is a republican who will be richly rewarded for ensuring that President Obama loses re-election.

 

We'll get a ton of monetary stimulus all right: first thing in the morning on November 7.

 

Kill the Fed. Do it know.

A Fast Economic Recharge That Will Never Happen

Somebody get the fuck-the-repugs tabasco they've been puting on their wheaties at the White House lately and pour it on Ben Bernanke's oatmeal. Time for the Fed to put the economy ahead of politics.

William Greider at The Nation:

Rome is burning while Congress fiddles. The president is out on the road trying to secure a second term, while the economy once again teeters on the brink of bad possibilities. The governors of the Federal Reserve Board seem to understand this better than most of Washington’s power hitters. But what can the Fed do? The central bank has already dispensed trillions to the financial system and pulled interest rates down to rock-bottom levels. Yet the economy doesn’t respond. Banks won’t lend, businesses won’t hire. Anxious consumers stopped buying, the order books are bare.

Miles Kimball, an imaginative economics professor at the University of Michigan, has stepped forward to propose an ingenious solution for the Fed’s dilemma. The government should create a “federal credit card” and send one to every adult in the nation, enabling each person to borrow $2,000 at a very low interest rate and not pay back any of the money until after the economy has fully recovered. The provocative kicker in Kimball’s proposal is that the Federal Reserve would itself provide the financing, not Congress or the president through the federal budget. And he argues that the central bank can do this with its unique power to create money.

A federal line of credit, Kimball suggests, could become a new, fast-acting channel for economic stimulus — more potent than the usual methods like tax rebates, and far less costly. That’s because consumers would not get any benefit from this government assistance unless they use the card — that is, borrow and spend — and do so before the government’s offer expires. After all, this is exactly what the economy needs. Why give the money in tax breaks for banks or businesses, which may not use it for the intended purpose? Why not deliver the aid to consumers, who will?

Kimball argues that this novel approach could deliver a strong, quick jolt to the stagnant economy, $400 billion or more. Yet it would add very little to the federal budget deficit, because the Federal Reserve operates under its own, independent balance sheet. Further, it’s not free money but a temporary loan, like the trillions in short-term loans the Federal Reserve gave the banking system at the height of the crisis.

Greider acknowledges that the Fed is too terrified of being accused of playing politics, too captured by Wall Street and too focused on combating non-existent inflation to consider this or any other stimulus measure before the election.

Yes, far better that the economy collapse, tens of millions of people suffer needlessly and the nation fall unto feudalism than the Fed do anything that might earn repug frowns.

Read the whole thing.

Expose the Trillion-Dollar Secret Giveaway to Banks

If Congress does pass a financial reform bill, the surrenders to big-money interests required to get it through are likely to be as vomit-inducing as the ones that distort the health reform bill, if not more so.

But not just because the desperately-needed consumer financial protection act is likely to be the first sacrifice.

Because President Obama is likely to pass on the best opportunity in more than 70 years to force real transparency and accountability on the Federal Reserve.

And thus fail to reveal to the public trillions of taxpayer dollars the Fed handed to private banks in secret subsidies.

John Nichols in The Nation explains:

President Obama is wrong, really wrong, about the Federal Reserve.

A remarkable left-right congressional coalition – which includes everyone from true-blue progressives like Florida Congressman Alan Grayson to bleed-red conservatives like Texas Congressman Ron Paul -– has formed to demand an end to Fed secrecy.

In particular, members of the coalition want to force the Fed to identify banks that took trillions of dollars in secret subsidies.

Unfortunately, the Obama administration has taken the side of elite and irresponsible Wall Street interests, as well as Fed insiders, to oppose open discussion of what is being done behind closed doors and without congressional consent with taxpayer funds.

"When it comes to openness vs. secrecy, Wall Street vs. Main Street, taxpayers vs. the big bankers, I am sorry to say that the White House has come down on the wrong side," says Vermont Senator Bernie Sanders, an independent who has long been critical of the Fed and of the bailout of big banks with tax dollars. "With growing support for this amendment from both the left and right, I hope that the administration reconsiders."

No one who knows Washington is holding their breath for Obama or Fed-friendly Secretary of the Treasury Tim Geithner to do the right thing.

The Fed will only be held to account if Congress acts.

SNIP

The Fed is injecting U.S. tax dollars in the accounts of big banks.
Congress has a responsibility to demand accountability, and citizens should prod senators to act by sending an "Audit the Fed" email.

Sanders is right when he says: "This money does not belong to the Federal Reserve. It belongs to the American people, and the American people have a right to know where their taxpayer dollars are going."

Read the whole thing.

Then call or email your members of Congress here.