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More Than 300 Economists Urge Obama To Nominate Yellen As Fed Chief

Thursday, September 12, 2013 - 6:43 PM
Janet Yellen appears to have heavyweight support; from the LA Times:

     "More than 300 economists have signed an open letter to President Obama
      urging him to nominate Janet L. Yellen to be the next head of the
      Federal Reserve, citing her "consistently good judgment" and her
      commitment to reducing unemployment.   . . .

      Among those signing the letter are Nobel Prize winner Joseph Stiglitz,
      former Fed governors Alan Blinder and Alice Rivlin  . . ."

Read more:

P.S. Sounds like DA member lou (comments 2 through 10) is in for a dog fight ;-)
4
cumuluscumulus297 posts since
Jan 16, 2010
Rep Points: 1,374
1. Thursday, September 12, 2013 - 7:06 PM
Stiglitz, Blinder and Rivlin are 3 people that I respect and have a lot of faith in. 
2
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
2. Thursday, September 12, 2013 - 8:40 PM
Not to worry.  I, Shorebreak, carry more influence than "300 economists". DA member lou is the shoe-in for the new Fed Chairmanship. And "I am unanimous in that!"
4
ShorebreakShorebreak2,378 posts since
Apr 6, 2010
Rep Points: 12,695
3. Thursday, September 12, 2013 - 9:11 PM
SB,

I like a new guy vs. Larry or Janet. 

But "frankly", I am scared of Lou, with 250 base points at first his press conference.  That would certainly kill the patient, if you know what I mean:D 

 
2
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
4. Thursday, September 12, 2013 - 9:49 PM
When I wrote I respected them, I meant I respected their choice for fed chairman in the article posted above. I also like the others mentioned in the article. They all recommended Yellen.
3
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
5. Thursday, September 12, 2013 - 9:51 PM
OK folks, let's get serious about this: Ken Tumin for Fed Chairman.
3
cumuluscumulus297 posts since
Jan 16, 2010
Rep Points: 1,374
6. Thursday, September 12, 2013 - 10:14 PM
To be serious and mark my words:

Any of these "usual suspects" will be the same-old and same-old after a while.

We need "out-of-box" candidates to accomplish atypical break-through in this difficult economical condition and climate.

Unfortunately we are not getting any of those (so-called dark horses).
2
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
7. Thursday, September 12, 2013 - 10:53 PM
Hey 51hh, I know a lot of people think any increase in the federal funds rate would be too traumatic for the economy, but having a federal funds rate that is not less than CPI is the policy that existed for almost the last 50 years before 2008. I don't see why 5 years after the recession we can't normalize monetary policy? At what point will it be safe to allow investors to receive positve real interest rate returns? If the stock market has a temper tantrum, I am sure it will be temporary and then it will adjust to the new reality.

 

Edit: If you think about this, it is actually incredible that people are afraid of an interest rate of 2.5%. In the history of the US, it is not an extraordinary rate.
3
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
8. Friday, September 13, 2013 - 7:21 AM
Lou said:

"If the stock market has a temper tantrum, I am sure it will be temporary and then it will adjust to the new reality."

Agree with you on the rest; but we all know that the stock market is driven by greed and fear.  What I am afraid of is that the 250 base points hike (all at once) will cause the Titanic to sink (with no return).  For a normal healthy person, such dosage may be ok; but I do not think that the U.S. economy is healthy by any means or measures.

Just my two cents without retribution.
3
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
9. Friday, September 13, 2013 - 12:05 PM
With respect to the economy not being healthy, I would say current monetary policy is one contributing factor to the current state of our economy.  This is the classic what comes first, the chicken or the egg. A normalized monetary policy, in my view, would be an important factor in restoring the economy. Of course, it won't be very helpful if our elected politicians continue to pursue counterproductive policies.
3
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
10. Friday, September 13, 2013 - 2:12 PM
Making borrowing more expensive and having higher interest rates for savers is not the mandate of the fed. The mandate given to the fed from Congress is low inflation and low unemployment. Maybe more stimulus is needed from Congress so that more jobs will be created, also it is business that needs to spend all that accumulated cash it has to create more jobs, or maybe congress has to change the mandate they gave to the fed. Not sure how much raising interest rate will lower unemployment as it is making borrowing and spending slower (70% of GDP). When we have such high unemployment raising borrowing costs are not going to help the unemployed. 
2
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
11. Friday, September 13, 2013 - 3:02 PM
 It is also not the mandate of the Fed to manipulate interest rates far below CPI creating gross distortions in the economy. Pumping up the stock market artificially and creating a dangerous bubble in bonds is not helping the overwhelming majority of the people out there. In fact, it is downright dangerous, because it could lead to an implosion when the Fed will be forced to raise rates sometime in the future.  Also, the Fed and our govt overestmates their power to create jobs and lower the unemployment rate. Only private sector business owners can do that, and, first and foremost, they need a govt which implements business-friendly policies that doesn't make it harder for them to grow their businesses.

Ally, it is obvious that you're an ardent defender of Obama and this administration and will defend them unconditionally, even if they appoint a Fed Chairman who will continue policies harmful to probably 99% of the readers of this website. I am going to try not to argue politics with you because I doubt either one of us is going to be persuaded by the other.
2
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
cumuluscumulus297 posts since
Jan 16, 2010
Rep Points: 1,374
13. Saturday, September 14, 2013 - 6:28 AM
Lou, I am a ardent follower of the economy, but not a supporter of what has been going on with families for the last 30 years. I have  followed what has been going on with families since the 80's. I just posted an article that has a chart on the income of families since the 80's. I have been an ardent follower of this and have seen this income disparity get worse during this time. I know that during this time our economy has been fragile and different ideas with quick fixes have been tried. I am watching a program on C-Span on "5 years after the financial crisis". I know that several of the papers I have read said the old ways were not working and that the slow deliberate recovery was what would be tried next. Don't know if this will work. But I know all the quick fixes in the past have not worked. Just know that wives have been encouraged to go to work, families encouraged to spend to keep the economy going, to get credit cards and all of this was in the 80's. I watched and taped so much on the back feeds on the Satcom, Galaxy and Telcoms feeds when we had the large satellite dishes during the 80's. 
2
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
14. Saturday, September 14, 2013 - 7:58 AM
I, Paoli2, have already decided who will be the next Fed Chairwoman or man, but will not announce it until Jan. 21, 2014 in order not to be banned from this fun group.  Have no fear Lou, "I" am not a fan of Obama and have written him personal letters telling him so.  In fact, if he actually reads my letters, "I" may not be around to announce the great news on Jan. 21, 2014.  What the heck.  I believe in reincarnation so I will get another go to torment others again. There will be a Paoli 3!   Stay tuned!
1
paoli2paoli21,146 posts since
Aug 10, 2011
Rep Points: 5,113
15. Saturday, September 14, 2013 - 5:21 PM
"slow deliberate recovery is what would be tried next"

LOL

Oh sure, the current administration actually wanted an anemic recovery. Sounds like their talking points from the last election.

 

Edit:  Let's take a look at the poverty rates and income disparity between rich and poor during Reagan and Obama years:

Last year the Census Bureau reported that the total number of Americans in poverty was the highest in the 51 years that Census has been recording the data. Median family income for black Americans has declined a  10.9 percent during the Obama administration.  It has declined for other groups as well — 4.6 percent for non-Hispanic whites and 5.5 percent for Hispanics. This decline does not include losses suffered during the financial crisis and the recession that followed, but instead measures declines since June 2009, when the recession officially ended. Moreover, the poverty rate for blacks was 26 percent in 2012 and 18% for the country.

During the Reagan Administration, real per-capita disposable income increased by 18% from 1982 to 1989, meaning the American standard of living increased by almost 20% in just seven years.  The poverty rate declined every year from 1984 to 1989, dropping by one-sixth from its peak. Under Ronald Reagan’s policies median African-American household incomes increased by 84 percent (compared with 68 percent for whites).

Most importantly, under Reagan, the rich got richer and the poor got richer. After Reaganomics took hold in 1983, incomes for every quintile, from the top 20% to the bottom 20%, rose. Under Obama the incomes of the top 20% have still been rising under Obama, but the incomes of everyone else, the bottom 80%, have been falling.
1
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
16. Saturday, September 14, 2013 - 5:36 PM
Actually in was made during the 90's. It was in a policy meeting with several speakers and it was said by Gene Sperling who said it was one of the ideas that more and more economists were signing on to. Said that a lot of the quick fixes  were just that and not long lasting. They were not long lasting and maybe it was time to try the slow deliberate recovery. 
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
17. Saturday, September 14, 2013 - 5:55 PM
Ally, I edited my last post.
1
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
18. Saturday, September 14, 2013 - 6:05 PM
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
19. Saturday, September 14, 2013 - 6:14 PM
Sorry my graph disappears when I try to post it. Look at the graph on my posting on wages from the 80's to now. It doesn't show 18a% increase in disposable income in the 80's but a decrease of wages as a % of GDP. It is in the posting of Where the families are now or something like that. Those in debt got richer because of the high inflation and paid debt off in inflated dollars. Wages accordingly did not go up. Look at the Recon figures and tables under the FICA website if they are still available for free. They started to charge for some in the early 2000's. 
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
20. Saturday, September 14, 2013 - 6:46 PM
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
21. Saturday, September 14, 2013 - 7:32 PM
This is my last post in this thread.

Your graph showing wages as a % of GDP is very misleading.  Wages don't include self-employment income, investment interest and dividends, property income, 401K matching contributions and medical benefits, and the increasing taxes on wages paid by corporations. It also doesn't include the explosion in transfer payments (entitlements) to the American population, particularly the poor. When you include all of this, the percentage of real income has actually not changed very much except in the last few years. There are also distortions in the GDP number relative to its wages and income component. This graph has been debunked by many economists, at least the ones who are not trying to score political points.

I agree with your other data, the poor and middle class have not done well in the last few years.
1
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
22. Sunday, September 15, 2013 - 12:33 PM
The graph was taken from the BEA that was evidently started in 1925. (Bureau of Economic Analysis)
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
23. Sunday, September 15, 2013 - 4:47 PM
3
51hh51hh1,462 posts since
Jan 16, 2010
Rep Points: 6,352
24. Sunday, September 15, 2013 - 5:00 PM
I guess it is going to be Yellen, who has indicated she is is willing to tolerate more inflation than her predecessor and ultimately lower rates. Will see how that works out.
2
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
25. Sunday, September 15, 2013 - 5:12 PM
Read it earlier. Here is the article from the Post and it names others.


Washington Post: Breaking News, World, US, DC News & Analysis 
2
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
26. Sunday, September 15, 2013 - 5:45 PM
This is beginning to be a joke!  Obama's favorites have turned him down and now we are left with Yellen who of course will accept it.   Or we can spin the bottle and try one of the others in Ally's link.  I think we should just send the names of who are left to Putin and ask him to pick one for us.  In fact, add Geitner's name too!  I sure don't think Geithner will turn Putin down. :)  I would suggest adding Lou's name but I would not want to see a battle between Lou and Putin.  We could end up losing Putin's help with Syria if Lou turns Putin down.    I think I need to rethink buying some 10 year CDs.
1
paoli2paoli21,146 posts since
Aug 10, 2011
Rep Points: 5,113
27. Sunday, September 15, 2013 - 6:03 PM
Well we got into this mess because of the politicians. Summers took his name out because of the politics of the appointment. A president has never had issues before from Congress with his fed choice. This is what we get when we elect the people we have elected. No one to blame but ourselves. 
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
28. Sunday, September 15, 2013 - 7:22 PM
Ally, I didn't think this was about Obama having issues with Congress.  I thought the candidates refused on their own.  I think they just don't want to take this burden upon themselves.
1
paoli2paoli21,146 posts since
Aug 10, 2011
Rep Points: 5,113
29. Sunday, September 15, 2013 - 7:47 PM
From the Washington Post-- 

Summers withdrew after an intense uproar among liberal Democrats, women’s groups and other advocacy organizations against his potential nomination — a highly unusual assault on the candidate who President Obama appeared to favor for the job.

It was about Congress having issues with the candidate. 
1
AllyAlly785 posts since
Jan 16, 2010
Rep Points: 2,281
30. Sunday, September 15, 2013 - 8:01 PM
I was taking my understanding from the article written in the Los Angeles Times.  It mentioned a conflict with him but not the same info in the Washington Post.  I guess you can say it was about Congress having issues with the candidate then.  I didn't realize they were giving him such a hard time.
1
paoli2paoli21,146 posts since
Aug 10, 2011
Rep Points: 5,113
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