...Obama may need to revise his blame chart.
Fed study says Bush and the banks didn’t cause the Great Recession. The Fed did
...a book by Robert Hetzel, a senior economist at Federal Reserve Bank of Richmond, says it wasn’t Bushonomics or greedy bankers or broken markets that caused the Great Recession. In The Great Recession: Market Failure or Policy Failure, Hetzel pins the blame squarely on the Federal Reserve and Team Bernanke.
Oh, the downturn first started with “correction of an excess in the housing stock and a sharp increase in energy prices” — the housing bust and the oil shock. Indeed, those two things were enough, in Hetzel’s view, to cause a “moderate recession” beginning in December 2007.
But only a moderate one. It was the Fed’s monetary policy miscues after the downturn began that turned a run-of-the-mill downturn into a once-in-a century disaster. Hetzel:
Not only did the Fed leave rates alone between April 2008 and October 2008 as the economy deteriorated, but the FOMC “effectively tightened monetary policy in June by pushing up the expected path of the federal funds rate through the hawkish statements of its members. In May 2008, federal funds futures had been predicting the rate to remain at 2% through November. By mid-June, that forecast had risen to 2.5%.A moderate recession became a major recession in summer 2008 when the [Federal Open Market Committee] ceased lowering the federal funds rate while the economy deteriorated. The central empirical fact of the 2008-2009 recession is that the severe declines in output that in appeared in the [second quarter of 2008 and the first quarter of 2009] … had already been locked in by summer 2008.
...
he irony here, of course, is that Federal Reserve Chairman Ben Bernanke is a much-noted student of the Great Depression and of the work of the late Milton Friedman whose landmark book, A Monetary History of the United States, pinned the blame for the Great Depression on a too tight Fed. As Bernanke told Friedman and his co-author, Anna Schwartz, on the economist’s 90th birthday a decade ago, ”You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”
Last edited by Yonivore; 08-07-2012 at 10:53 PM.
The fed didn't say that. an economist from one of the branches did and he doesn't speak for the fed. he doesn't even speak for the branch.
he also did say that it was bush policies and the derivative markets. he said that it took them as well as a failure of response by the fed to cause it to go from moderate to severe.
At least this is policy though. bravo I am proud of you.
I see 40 squares.
"started with ... a sharp increase in energy prices"
bull , $140/barrel was summer 08,the housing bubble started to bust CA and maybe FL early 2007, late 2006.
This asshole is a (probably paid) shill protecting the financial sector.
I note that Yoni and other tea baggers never seem to blame the financial sector, only blame the govt and unions exclusively for all America's numerous ills, damning evidence that tea baggers are nothing but right-wing shills for the VRWC.
I'm routing for you! God bless
I'm connecting the dots!
Brother, there is nothing to connect. The article yoni posted was straight to the point. God bless
Go Team!!
Your spelling still sucks. Prayer doesn't work.
Ron bless.
Good article, but it assigns to much blame to the Fed. The article does note that it was the housing sector that started the mess, which is correct. It is also correct that the Fed could have done more to prevent the severity of the recession, but that doesn't mean its the Fed's fault. Deregulation of the financial sector is the main culprit. Lax lending standards, unregulated derivatives tradings, etc, are all the big reasons this storm happened. Yes, the Fed could have done more to stop it, but failure to alleviate a problem is not the same thing as being responsible for it.
"to much blame to the Fed"
the Fed is part of the "govt is the (ONLY) problem" lie spewed by Repugs and right-wingers, deflecting all blame from the revered, spotless, holy private sector.
Thank you Barney Frank, Maxine Waters, Freddie Mac, Fannie Mae, ACORN lawsuits, and amendments to the Community Reinvestment Act.
Meltdowns and Myths: Did Deregulation Cause the Financial Crisis?
ACORN race-mongered banks into lowering lending standards.House Speaker Nancy Pelosi, for instance, stated last month that "the Bush Administration's eight long years of failed deregulation policies have resulted in our nation's largest bailout ever, leaving the American taxpayers on the hook potentially for billions of dollars." Similarly, presidential candidate Barack Obama asserted in the second presidential debate that "the biggest problem in this whole process was the deregulation of the financial system."
But there is one problem with this answer: Financial services were not deregulated during the Bush Administration. If there ever was an "era of deregulation" in the financial world, it ended long ago. And the changes made then are for the most part non-controversial today.
In a literal sense, financial services were never "deregulated," nor was there ever a serious attempt to do so. Few analysts have ever proposed the elimination of the regulatory structures in place to ensure the soundness and transparency of banks. Simply put, the job of bank examiner was never threatened.
Can you explain exactly what damage unregulated derivatives did to our economy other than causing the federal government to engage in that asinine TARP bull ?
What would have happened if the en ies who dealt in these derivatives had been allowed to fail?
That's why I want the Democrat Party voted out of office and destroyed, once and for all. They cause like that.
Yes, it is the same thing; particularly when Ben Bernanke knew better.
It does work, brother. The fact you pray is proof of that. We have been agreeing on so many topics is more proof. I'm still rooting (pray answered) for you, brother. Get those 70,000 post! God bless
please pray for the strength to stop private messaging me...
jon tesh
How's that thread working out? I've not been.
Brother, you are confused again. I posted on your wall for the world to see. Nothing private about it. God bless
ok, pray for the strengh to stop posting on my wall because I hope you burn in ...
jon tesh
It's your thread yoni... just like you, apparently it isn't working out at all.
Bless your heart. I know your anger is getting the best of you,again. I forgive you. I won't post on your wall anymore. God bless
It's not my thread.
If the Fed is so blameless here then explain why they operate so secretively, tbh....
Nec
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote
