Post by unlawflcombatnt on Jul 25, 2007 3:35:54 GMT -6
Here's are excerpts from an article from Mike Shedlock (Mish's Global Economic Analysis) titled
Class Warfare
"Bernanke was grilled by Congressmen Ron Paul, Luiz Gutierrez, and Barney Frank at the Fed's semi-annual report to Congress. Caroline Baum was discussing this in Congress Draws Bernanke Out on Class Struggle....
When it was Gutierrez's turn to question Bernanke -- he had shared his views with the chairman earlier -- he focused on immigration and China, not income inequality. Had the congressman asked, here's what Bernanke could have said:
'Through its ability to create reserves out of nowhere, the Fed affects the rate of inflation. Inflation, or a rise in the price level (to Austrian economists it's an increase in the money supply), harms savers more than borrowers because borrowers get to pay back their loans in depreciated dollars.
Even so, inflation ends up hurting the poor more than the rich because it reduces the purchasing power of their modest wages....
the Fed indirectly contributes to income inequality when it allows inflation to increase. It makes everyone poorer absolutely and the poor relatively more so.
Maximum sustainable employment is one of the Fed's dual mandates, but it can't be achieved with more inflation. Artificially manufactured employment is unsustainable and therefore violates the Fed's mandate.
"Maximum sustainable employment is one of the Fed's dual mandates, but it can't be achieved with more inflation. Artificially manufactured employment is unsustainable and therefore violates the Fed's mandate.' "
Bingo!
On that note, the Mish telepathic question lines are open once again.
The questions are pouring in.
It's time for some Q&A
Q: If artificially manufactured employment violates the Fed's mandate why do they do it?
A: There are lots of reasons and hubris is arguably at the top of the list. The more cynical will suggest that it is all part of a grand scheme to transfer wealth from the poor to the rich. That is in a nutshell what inflation does and Bernanke favors a positive inflation rate at 2%. If it's held low enough the poor and increasingly the middle class don't notice until it's too late. In the meantime, the power of the state grows and grows and grows.
Q: Was not the housing bubble an artificially manufactured employment scheme?
A: Absolutely. To top it off, Greenspan recommenced adjustable rate mortgages right at the bottom in yield.
Q: Can "Maximum sustainable employment" be engineered by a bunch wizards sitting behind a curtain in OZ?
A: Obviously that is a rhetorical question...."
The full article can be found at
Class Warfare
Class Warfare
"Bernanke was grilled by Congressmen Ron Paul, Luiz Gutierrez, and Barney Frank at the Fed's semi-annual report to Congress. Caroline Baum was discussing this in Congress Draws Bernanke Out on Class Struggle....
When it was Gutierrez's turn to question Bernanke -- he had shared his views with the chairman earlier -- he focused on immigration and China, not income inequality. Had the congressman asked, here's what Bernanke could have said:
'Through its ability to create reserves out of nowhere, the Fed affects the rate of inflation. Inflation, or a rise in the price level (to Austrian economists it's an increase in the money supply), harms savers more than borrowers because borrowers get to pay back their loans in depreciated dollars.
Even so, inflation ends up hurting the poor more than the rich because it reduces the purchasing power of their modest wages....
the Fed indirectly contributes to income inequality when it allows inflation to increase. It makes everyone poorer absolutely and the poor relatively more so.
Maximum sustainable employment is one of the Fed's dual mandates, but it can't be achieved with more inflation. Artificially manufactured employment is unsustainable and therefore violates the Fed's mandate.
"Maximum sustainable employment is one of the Fed's dual mandates, but it can't be achieved with more inflation. Artificially manufactured employment is unsustainable and therefore violates the Fed's mandate.' "
Bingo!
On that note, the Mish telepathic question lines are open once again.
The questions are pouring in.
It's time for some Q&A
Q: If artificially manufactured employment violates the Fed's mandate why do they do it?
A: There are lots of reasons and hubris is arguably at the top of the list. The more cynical will suggest that it is all part of a grand scheme to transfer wealth from the poor to the rich. That is in a nutshell what inflation does and Bernanke favors a positive inflation rate at 2%. If it's held low enough the poor and increasingly the middle class don't notice until it's too late. In the meantime, the power of the state grows and grows and grows.
Q: Was not the housing bubble an artificially manufactured employment scheme?
A: Absolutely. To top it off, Greenspan recommenced adjustable rate mortgages right at the bottom in yield.
Q: Can "Maximum sustainable employment" be engineered by a bunch wizards sitting behind a curtain in OZ?
A: Obviously that is a rhetorical question...."
The full article can be found at
Class Warfare