Federal Reserve on Cap Hill
Yesterday and today the Federal Reserve chairman Ben Bernanke was on Capital Hill trying to argue for an expansion of powers for the Federal Reserve. These expanded powers would be new oversight powers to financial and non-financial firms making sure they don’t reach the ominous “too big to fail” stage, along with the power of “consumer protection” by ensuring low inflation and full unemployment.
At the same time Ben was also fighting against more Federal Reserve oversight–that is, oversight on the Federal Reserve. The Fed must keep its independence lest monetary policy be politicized, as if it has not already. The bail outs, lending money to the big financial firms, and lending money to banks overseas by billions all seem to be political to me.
Yesterday Bernanke wrote had an Op-Ed peice in the Wall Street Journal laying out the Fed’s exit strategy. I think Mike Shedlock’s comments are on the mark, so no use rehashing something that has already been commented on. To this:
“Overall, the Federal Reserve has many effective tools to tighten monetary policy when the economic outlook requires us to do so. As my colleagues and I have stated, however, economic conditions are not likely to warrant tighter monetary policy for an extended period. We will calibrate the timing and pace of any future tightening, together with the mix of tools to best foster our dual objectives of maximum employment and price stability.”
I would add Professor Rizzo’s comment, “How good are Bernanke’s abilities as a forecaster?” Video proof.
See also:
Ron Paul’s introductory remarks and questioning of Bernanke.
Ron Paul’s media rounds (FOX, FOX Business 1 and 2, MSNBC, CNBC, Bloomberg).
Bill Posey questioning Bernanke.
Alan Grayson questioning Bernanke.
