WatchIt was always known that Mr Bernanke will have one tough job as the Fed Chairman. The bubble was already at the bursting stage when he took over, and there wasn't any way he (or anyone else) could have kept it going. His real task and challenge was to limit the fallout.
How has he done ? I would say very poorly.
I have no misconceptions about the difficulty of his job. The balance between slowing the damage from the credit crunch, falling USD, rising commodity prices and most difficult - the different expectations of groups with vested political and financial interests. With politicians breathing down his neck, he is in a situation where it is impossible to not antagonize someone.
But the Fed under his watch is turning out to be a PR disaster. The slashing of discount rate on an option expiry day in August was ridiculous and was criticized very strongly. Just last week, the market dropped after the small rate cut, and next day there was an announcement of the TAF (Temporary Auction Facility). The move was in plan for some time, but the timing of announcement creates a perception that Fed is scared of market drops.
Here is one quote from MSN Investor's daily dispatches.
Newsletter writer Tom McClellan of McClellan's Market Report said the Fed's clumsy moves "introduces a new type of risk, which is that we have a central bank in the U.S. which cannot walk and chew gum at the same time."
And another
Dennis Gartman of the Gartman Letter said he'd lost confidence in Fed Chairman Ben Bernanke.
Quite simply, the Fed is losing respect. My bet is after one year, and in less than 2 years, the new Government will appoint a new Fed Chairman. Unless Ben get's his PR act together, which is not very likely if past is any indicator.
StuckInBA
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@Duke,
Your idea that biotech can save us and give us a big export is good. I don't see however how we can advance our technology and science with the radical christian right stopping engineers and scientist, like myself, at every turn. Stem cells is a good modern example of an age old problem as old as man itself. We saw it with gallileo, Darwin, Einstein, Franklin, and Roslin Institute, all faced resistance from the "devine" right.
I believe in secularism! I don't think the rise of our Western Civilization was the result of Democracy or any other force. I believe it was the result of a secular society that asked lots of questions and was able to accept new ideas/thinking.
Until we control our American Taliban, we will never make fast advances in science/technology.
@Harm
Our military will be used to maintain the status quo, but I think it will fail. We have an all volunteer military that will find it harder and harder to get people to fight. Even if we revive the draft, we will fail. People with no heart in the fighting will save us. If Opec decides they want Euros instead of dollars, we will have no options. We will only piss the rest of the world off and drive any trade partners away.
The illegal war we wage in SW asia is costing us dearly. I don't think anyone will get enough political clout to start another illegal war for a long time.
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Imagine, for the next election, if the choices were Huckabee and Hillary. That is a very scary thought!
If those were the choices, I would have to seriously consider voting for Hillary. And then I would go shoot myself.
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The problem with Ron Paul is that he would have a Congress almost exclusively against him. So he wouldn't be able to get any of his platform enacted.
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DennisN, I think you are right.
But, I would prefer that to a scenario where the congress and the president agree on a lot of things.
Absolute power = bad.
Checks and balances = good.
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My biggest issue is Medicare, and I believe this is the biggest issue of many baby boomer and retiree voters.
What did Ron Paul offer so far? Tax write-offs? What about so many people who can never afford the payment, let alone having enough tax for write-off? What is the median income of the US household? $50K? What are the # of people uninsured? 40M. What are the typical insurance plan for $50K jobs? HMO piece-of-crap that is next to non-existent.
So what does Ron Paul offer for people who are either stuck in $50K jobs, or those without insurance? Mind you, these people are very likely the 20+s, new college grad whom people of my generation rely on for our retirement. None, not only that, he is going to take away the last resort for these people - government medical aid. I don't care how efficient the market will be, how is he going to tie over from where we are today to where the "efficient market" will be? How long does he think the transition is going to take, and how many people must die due to this grand social experiment?
He is also completely naive on international affairs. We Americans can enjoy a much higher standard of living precisely because we meddled with international businesses and grab an unfair share of resources, which is something fundamental to this country's future prosperity. The only thing wrong with the current international policy is, we are not doing it right. We should continue to be the world's police force, in a much more intelligent way. We don't do it by pissing everyone off, we do it by skillful trading, persuasion, effective propaganda. If America retreats, Russia and China will immediately advance to fill the void, and the consequence will be very devastating, much worse than the depreciation of USD.
All in all, I like his voice in the mix and I hope some of his input will be incorporated by the next President. But I will never ever have him as my President, an idealist should become an academia, not a politician.
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A vision of 2009.....
Ron Paul sworn in as President. Congress - both Demitass and GOP - enact a veto-proof law making it a felony to be a Libertarian. The House impeaches and the Senate convicts Paul and his VP, and Speaker Pelosi becomes President. The Supreme Court declines cert on any appeal.
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DennisN Says:
December 17th, 2007 at 4:16 pm
"The problem with Ron Paul is that he would have a Congress almost exclusively against him. So he wouldn’t be able to get any of his platform enacted."
The media would humiliate the Congress just as they did when Swarzenegger became governor. Fear of not being reelected by a new enlightened and invigorated population will make them cave. He would be a strong leader because he would be polarizing.
If anyone has an hour, here is a very nice video where his views are clearly made on almost every major issue. http://www.youtube.com/watch?v=yCM_wQy4YVg
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What are the typical insurance plan for $50K jobs? HMO piece-of-crap that is next to non-existent.
Bush has a great solution, namely catastrophe insurance and health spending accounts.
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And yes, for those who have gotten to know me, I do believe in a hybrid economy but I don't see it as being incompatible with his economic model.
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I firmly believe that there must be incentive for people to avoid non-essential health care.
Why visit a doctor just to be told to stay home? People are just way too paranoid about their bodies.
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Hey Peter, what is the solution for an individual who has health insurance but exceeds the limits of the policy?
On a similar note, should there even be health insurance, or should an individual ever face being bankrupted by a health issue?
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And hospital should charge for emergency room visits. Say, $250 cover charge. The charge can become a tax credit (not deduction) to avoid overburdening the poor.
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Peter P,
We also need to repeal the FDA. Why should you have to go to a doctor - BY LAW - to get drugs you need? I already know I have high blood pressure, so why shouldn't I be able to go down to Costco and, without a prescription, buy what I need?
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Peter P Says:
December 17th, 2007 at 4:48 pm
"Bush has a great solution, namely catastrophe insurance and health spending accounts."
Barring us adopting a Ron Paul type purely market driven system, I would have to say what you are miscategorizing as the Bush system is the type I would favor. It addresses both of our concerns, not using health care unnecessarily, and having a mechanism kick in when someone has a catastrophic issue.
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Ron Paul has a very good answer on that link I posted regarding prescriptions.
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Unlike RP, I don't trust private industry to police itself in the areas of safety or good citizenship.
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Peter P Says:
December 17th, 2007 at 4:53 pm
"And hospital should charge for emergency room visits. Say, $250 cover charge. The charge can become a tax credit (not deduction) to avoid overburdening the poor."
But that is just masking a direct government payment which under a different form you would oppose.
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Hey Peter, what is the solution for an individual who has health insurance but exceeds the limits of the policy?
I think catastrophe insurance can address this issue. The limits should be set very high (e.g. $5M) but the deductible should also be high (e.g. $5000 - $10000).
On a similar note, should there even be health insurance, or should an individual ever face being bankrupted by a health issue?
I believe so, unfortunately.
I am not entirely against a parallel health care system with basic services.
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If Opec decides they want Euros instead of dollars, we will have no options.
If OPEC decides they want Euros, then there will be a booming trade in currency exchange (as we convert dollars to Euros, or dollars to Yen or Rubles, to buy oil). Or we might simply exercise our military/imperial 'option' and seize it outright. But I see little chance of either scenario happening. For all the hot rhetoric (Imperialist Zionist dogs!), I seriously doubt most OPEC countries (who depend on oil exports for their very existence) want a trade war with their biggest customer --the U.S.
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But that is just masking a direct government payment which under a different form you would oppose.
To someone who works and pays tax, yes.
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@SIBA,
I am not against RP, I just don't agree with his 'purist' Libertarian views/policies 100%.
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OK buddy, but a catastrophic policy as you just described is exactly the type of MSA that you just called the Bush plan that you didn't like.
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Peter P Says:
December 17th, 2007 at 5:03 pm
"But that is just masking a direct government payment which under a different form you would oppose.
-To someone who works and pays tax, yes."
So why not compromise, make all medical treatments deductible, have a market driven system for the 80% low cost stuff, and catastrophic coverage for everyone (debatable who pays what)? In other words MSAs with universal catastrophic coverage.
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HARM Says:
December 17th, 2007 at 5:04 pm
"@SIBA,
I am not against RP, I just don’t agree with his ‘purist’ Libertarian views/policies 100%."
I don't either, but I do agree with at least 80% very strongly which is why I think we should unite and get this guy elected.
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What Malcolm said (re: Ron Paul).
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So why not compromise, make all medical treatments deductible, have a market driven system for the 80% low cost stuff, and catastrophic coverage for everyone (debatable who pays what)? In other words MSAs with universal catastrophic coverage.
That is better. You are right.
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Here's a fun concept. I believe that RP still uses the full power of government but he transfers the regulation to the judicial branch instead of the legislative branch. He does this by really raising property rights and then using easy access to courts for society to have a social check on business. This applies to pollution and environmental issues. It is the most cost effective way of regulation. I've always resented the current environmental policies of businesses proving compliance. I believe government should set standards but allow the public the power to monitor and then bring action against a business shown to not be in compliance.
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The flaw becomes that industry will pollute lower income areas because they would lack knowledge or motive to hurt a local employer, but then again we already have that problem so one can only hope the change would shuffle things around a little.
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RE: environmental laws
The government can set an exchange-tradable pollution quota. This way, the environment can be protected by Free Market as well.
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Do you favor market traded pollution credits or did I misunderstand the posts I read where you were not in favor of carbon credits? Obviously credits would have to be issued in groups like specific chemicals but I think you might have been debating someone on the global warming issue and not specifically on industry emissions. PC for pollution.
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Do you favor market traded pollution credits or did I misunderstand the posts I read where you were not in favor of carbon credits?
I basically said that IF "global warming" is real then carbon credit is the only solution.
I consider CO2 as a pollutant. I just do not agree with the linkage between it and the alleged "global warming" theory.
I am not against carbon credit trading. I am just against forming policies based on the assumptions proposed by "global warming" theorists.
I love the environment as much as anyone else.
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Of course. I actually resent people who try to say someone doesn't like children or the environment merely because they have a different solution. Thanks for clarifying.
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Bap, why do you hate the environment?
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if you trade pretend credits, the net sum remains even. the gain is zero. the act is silly. In my opressed opinion.
What about fiat money and financial derivatives? Are they pretend credits or are they real? ;)
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Ron Paul will lose the nomination, run as an independent, choose Admiral James Stockdale (dead or alive) as his running mate, and ensure that we get Obama'08. Nice.
Maybe I should have sent him some (Fiat) money yesterday? Thanks RP, now RiP.
On a more serious note, Ron Paul will never ever ever ever fly with the Republican establishment. He is much too principled for them, There is nothing they fear more than a real, principled conservatist (not in most dictionaries, but you get the idea:)). That's worse than a democrat, in their book.
Ron Paul doesn't have much of a chance stealing votes from real progressives. He does have certain sensible positions, but he's too much of a kook for them.
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RP represents an idealism of the past, when America was first founded while much of the land and resources were unaccounted for. Unfortunately we are living in a much more crowded environment with land ownership well carved out and population growth slowing down, his kind of isolated "conservatism" will never work in this much more entangled world.
The true disappointment of RP is he cannot even come up with a practical Medicare policy while being an obgyn himself. Somebody from his team should at least come up with a PLAN. Just leaving everything to the free market is not going to fix medicare, because a truly free and market-driven competition will naturally dictates that weak and poor genes be completely wiped out. There is no market-driven reasons why poor and sick people should get medical attention at all! Is that acceptable for our civilization?
If you leave issues like medicare, education and national defense to the free market, you might as well abolish the notion of government altogether, and since there will be no government, what is he running for?
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OO raises part of the 20% that I can't quite reconcile with him. I think with RP we have a chance to take a necessary step back and reevaluate the social model.
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If you leave issues like medicare, education and national defense to the free market, you might as well abolish the notion of government altogether, and since there will be no government, what is he running for?
Wasn't that the Republican platform in 2006 - the Contract With America?
Vote for us and we'll relieve you of governmental intereference?
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Contract with America was in 1994.
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>> Ron Paul will save us all.
Yes, I am voting for this honest and wise main in 2008….
yes, you and the other 8 people on the internet.