How do you spell stagflation?

Beat me to it, Bob.

Those of you in SportsJournalists.com Nation old enough to remember those WIN buttons and the frightening late 70s and early 80s will remember that when Volcker took over as Fed Chair, he pushed interest rates into the ionosphere -- around 20% -- to squash inflation.

It did that... along with throwing this country into one of the deepest recessions since the Great Depression.

Not saying it's a good thing, because having remembered those times, it was frightening stuff. I remember explaining that to Little Birdscribe when we watched "Miracle" -- that this was going on in the middle of a perfect economic storm and some really scary times that younger people can't relate to.

But one thing's clear. Ben Bernanke may be the best appointee Dubya made in his reign of error. For our sake, he better be.

 

But one thing's clear. Ben Bernanke may be the best appointee Dubya made in his reign of error. For our sake, he better be.

Eeesh. You're kidding, right?

The guy who has made saving money for the average american a losing proposition (bank savings rate of return - taxes <inflation) and killing the dollar, all for the benefit of financial institutions, is the *best* GW has picked?

On second thought, he just may be....

 

One thing, however, is clear here. Bernanke and Co. may be better off leaving interest rates alone. They've cut them by 3% since September and it typically takes 9 months for those cuts to work their way through the economy.

Raising them in a time when oil just hit $137 a barrel and the jobs report was depressing (5.5% unemployment, nearly 50k jobs gone in May) would wreak financial havoc in the short term. And in an election year, Bernanke won't go there.

One interesting response I heard this morning on CNBC came from Rep. Barney Frank, who suggested a second economic stimulus check. When skeptical, free-market uber alles, eye-candy anchor Trish Regan asked him where the money would come from, Frank didn't miss a beat, saying on Sept. 10, 2001, we didn't have any money, but all of a sudden, found hundreds of billions to invade Iraq.

So taking some from that would hardly be missed.

Even Larry Kudlow, who is the standard-bearer for free-market, low-regulation, low-tax economics, didn't completely rip Frank's idea, save for Frank's suggestion that a raise in taxes on upper-income folks would help pay for it.

 

I think he is the best appointee in Bush's reign of error, Poin. And I'm a Democrat.

He had to cut interest rates in the wake of a credit crisis that is the worst thing to happen to the economy in 70 years. Had to. The only complaint is that he didn't do it soon enough.

Not to do that would be equivalent to Hoover refusing to provide economic stimulus during the early days of the Depression.

You know and I know that financial institutions are going to benefit from whatever's done. As we saw when the govt. bailed out Chrysler 30 years ago and bailed out hedge fund Long Term Capital Management 10 years ago, some institutions can't be allowed to fail because of the ramifications of such failure.

The fall of the dollar? An unfortunate byproduct, one accelerated by the manic raise in oil prices.

 

Is it in the government's power to suspend oil trading on the commodities market? Just asking.

 

If you want to be that simplistic, I can play that game, too.

Everything was grand with the economy when it was Bush in the White House and the GOP in charge of the House and Senate.

What change in government has coincided with the downturn in the economy?

Anyone? Anyone?

 

Bush ultimately signs the appropriations bills.

poindexter, what's your fix for the cancer patient here? The Bush Administration's manta -- When In Doubt, Do Nothing.

 

Strongly disagree, birdscribe. They can be allowed to fail. The reasons we keep having these monumental fuckups is because executives (who make billions in bonuses) feel invincible because Daddy government will bail them out. Fuck that. I didn't sign up for that.

Let the people who get into these messes extricate themselves. If the system blows up, start again. What on earth is so good about our financial system that the taxpayer should continually bail it out?

The Barney Frank comment is so ridiculous, but par for the course. The answer obviously, is our children and their children will be the one burdened with the bills for all this spending we do now. It's patently unfair to them, but the way this country runs. Sweep it all under the rug, let the next generation worry about it. Nobody is ever responsible for their own messes. Leave it for the next generation.

I hit my three post argument limit, so I am out.

 

It might stop the inflation trend, but gawd almighty, what would it do to the already-sick-as-hell real estate markets?

We're already in the midst of a housing crash and foreclosure epidemic, throw in interest rate shocks and the housing industry might just COMPLETELY shut down for a couple years. That idea ought to scare the hell out of every homeowner.

 

Bush's "robust jobs numbers" early in his term were all of the $7/hr variety.

We sane Americans roasted you wing nuts on this issue as an omen betokening a crash.

Like going to see Fahrenheit 9/11, you jokers wanted to hear nothing of it.

I swear.... you all deserve a throttling.

 

How's Jesus doing these days. He still want to go to Venus?

 

Poin, I know you're out of this, but let me get this in:

I don't disagree with your too-large-to-fail argument, especially when it's thrown out there by free-marketeers who don't want to touch the economy. Actually, you and I are on the same page there. I pointed that out to make a point that is irrefutable: that some entities won't be allowed to fail.

I ripped the Clinton Adminstration for bailing out LTCM then and I'll rip them now. The government has no biz bailing out a hedge fund.