Alan Blinder Fires First Shot Across QE3 Bow: Says We Need More Stimulus To Boost Employment

Tyler Durden's picture

A little under a year ago Moody's Mark Zandi and Princeton economist and former Fed vice chairman Alan Blinder penned a paper titled "How we Ended the Great Recession" which did nothing but extoll the virtues of spending trillions in both fiscal and monetary stimuli and preventing U3 from hitting 16% (of course how one proves a counterfactual is irrelevant: just remember - if the Fed disclosed its top secret bailout plans the world would end. Same thing here - accept it - after all the guy is a professor at Princeton). In a nutshell Blinder is nothing but Paul Krugman on steroids: a man who believes that there is nothing worse in this world than establishing fiscal (and monetary) discipline now. Well, in an interview with Tom Keene earlier, Blinder fired the first shot across the QE3 bow, telling his Bloomberg host that the US needs "somewhat more" fiscal stimulus once again in order to boost employment (hold on: didn't we end the Great Recession, and certainly the normal one in the summer of 2009 according to the NBER?). How this would be accomplished in the current climate is not explained. Instead what Blinder says makes one wonder just who is on the tenure committee at Princeton - when asked how we bring the deficit in without austerity, the Princetonian responds: "Unfortunately I think it is very subtle for most political processes especially for the political process in the US. What we should be doing is somewhat more fiscal expansion but at the same time legislating into law fiscal consolidation for the future. Starting 2 years from now, 3 years from now, 18 months from now. But not now." Of course never now: why bite the bullet now when it can be kicked to some other administration in the indefinite future? Especially when tenure money and/or Wall Street bribes are at stake...

Basically, let's just incur as much debt as possible now, and eventually it will get better. And this is happening now almost 2 years after the recession supposedly ended. Naturally, there will be no fiscal expansion: not with the current political set up. Which leaves just one option - monetary stimulus. And since Blinder is very close to the Fed, we are confident that the two-way dialog between academia and Federal Reserve is already under way, making it clear that if no fiscal stimulus will be forthcoming, then QE3 certainly will have to take its place. Especially now that the Economy has once again taken a turn for the worse.

That said, we have to thank Mr. Blinder for providing the first direct evidence
that the prevailing throught among the Princetonian circle is one of
further stimulus. The only question is whether it will be fiscal or
monetary.

We believe that with this the opening salvo for more cash demands, which will be met with staunch opposition in D.C., thereby kicking the ball back to the Fed (which already is doing everything in its power to deflate all commodities as rapidly as possible - a trend which will sooner or alter engulf risk assets as well) the only alterantive is monetary. Aka more quantitative easing. And when that becomes apparent, and when Goldman's Jan Hatzius is firmly on board, the full court press for another round of easing can begin.

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asdasmos's picture

To infinity and beyond.

PulauHantu29's picture

+1.

I'd add another Two Trillion to kickstart this sucker.

anynonmous's picture

Keene was hosting David (qe3)  Blanchflower today on his midday program.  Keene normally does a good job of disguising his bias, but today was a love in; must have been the aroma of manure being spread on the fields adjacent to Dartmouth where he is holed up today and Friday that brought out his Keynesian/Progressive inner self.

 

There was a great deal of animosity in today's show directed (by the guests) at Ryan and Boehner.

 

(if only I could remember the password to the parental lock, I would be tempted to check out the talent at CNBS to see if they have moderated their blatant political/economic bias.

Thomas's picture

This is the idiot who said the weak dollar only mattered if you travel abroad. Princeton is the base camp for NAMBLA.

1100-TACTICAL-12's picture

We need to start developing a deck of cards for all these cocksuckers, hell it'll probably take 2 or three to get'em all. ZH1 to ZH2 double tapped the ace of spades...

earnyermoney's picture

Such a deck exists. Your comment reminded me of Walstreetpro2 video from the early days of ZH.

http://www.youtube.com/user/walstreetpro2 "Everythings made in China" features the deck I remember.

Americant Expat's picture

That was a great video. I especially like when he said "$8/hour doesn't even support my weed habit..." I try to buy things that aren't made in China and it's next to impossible. 

RKDS's picture

I hate it because it makes me feel helpless.  You have to already be rich to even be able to try to get anything manufactured here it seems, otherwise you have to put up with whatever the corporations are importing or do without entirely.  Feeling helpless to change this is the worst part though.  America is not a country where people should feel this way.  The boomers - their government, their "entrepenuers," their attitudes - have really fucked us.

Don Birnam's picture

Blinder is completely unwatchable. The distracting twitch is worse than that of Chief Inspector Dreyfus.

http://i.dailymail.co.uk/i/pix/2009/04/22/article-1172398-04978A1C000005...

Kopfjager's picture

Agreed. Can't change anything set in stone unless you blow some rock.

Michael's picture

I just thank God 80% of the baby boomers will be dead of old age in 20 years. That should be about the time the MSM dies a horrible death as well, as the boomers in large part get their news exclusively from that dying 4th estate. Welcome new Internet 4th estate and alternative media.

Ying-Yang's picture

Yah.. keep on thinking that. About the time Boomers should be dying off stem cell organ regeneration will be bought with Boomer wealth, extending life expectancies and generational greed.

How's that inheritance working for you?

ElvisDog's picture

What you wrote about stem cells will only apply to the uber-wealthy boomers. The rank-and-file won't have the cash to pay for life extension. I see just the opposite happening - average life expectancy will start to decline because we as a society won't be able to pay the enormous amounts required to keep the geezers going their last 2-3 years of life.

Cdad's picture

I would be tempted to check out the talent at CNBS to see if they have moderated their blatant political/economic bias.

Ummmm....no.  Their coverage has reached a level of irrelevance that is actually quite surreal to watch.  They are literally never on point with anything that really matters.  It's a 24/7 schedule of filler. 


akak's picture

"Talent"?

"CNBC"?

Non sequitur!

tmosley's picture

He means "tits".  Big, beautiful, bouncy tits.  Oh yes.  Bouncy bouncy.

lol

Soul Train's picture

http://obamadollar.com/Ben-Bernanke-Mr-Fantasy.jpg

Ben , Ben , Ben - now we know.

http://www.youtube.com/watch?v=7_nwbTeIN4Y

He must hide in a closet and smoke a special brew at night. Then trim his beard and put on his straight clothes during the day to print.

Meanwhile, our Federal government controls education and turns some of our best and brightest into rapping fools, like this High School Calculus class. -- just like Michele wrapping on the White House lawn with her rap music.

see for yourself how federal education influence has changed things

http://www.youtube.com/watch?v=Umoo9yTETFs

Dr. Porkchop's picture

I like tits...my mother had 18.

akak's picture

<chortle!>

But, I hear she is a real pig --- and a damned ugly sow!

Must be pretty thin at Christmas, what with being a decasextuplet and all.

Michael's picture

CNBC = Central Neo-Bank Cartel channel. The people you see on that channel are central bank employees.

Re-Discovery's picture

Blinder is THE definition of Egghead.  What a lizard.

Blinder, Lies-man, Made-off -- I love guys whose names fit their roles.

Lets_Eat_Ben's picture

Just looking at him makes me want to dig my fingers into his face skin and bite off his fucking nose

Re-Discovery's picture

I'll let you.  I'd rather not touch him at all.  I might catch his ecnomic blindness.

DaveyJones's picture

I have a fever and the only prescription is more cowbell

smartknowledgeu's picture

 Yes, from the guy that said,The last duty of a central banker is to tell the public the truth," (PBS’s Nightly Business Report, 1994), Blinder confirms that all central bankers are out to bilk the people and that they think or care of no one but themselves even if those gains are made through outright lying, stealing, cheating and deception. Central Bankers = Public Enemy #1 no matter in what country they dwell.

 

 

Mountainview's picture

This would be great... for Asia...

Scottj88's picture

This guy has such a nervous twitch with his jaw "snapping" when he is talking.

I may not be from Princeton, but it doesn't take an overpriced education to see the Dollar is dying....

What a joke!  We will be off the Federal Reserve Note within 18 months anyways.  The question is will they succeed in setting up their next fiat currency?

http://thehardrightedge.com/endofdollar/

asdasmos's picture

It is his mission to devalue the dollar. He knows this.

 

He just has to keep up the dog and pony show for the public. (along with 'expectations')

 

The touble is when the situation gets out of his hands. Although we might already be in or nearing the event horizon.

rocker's picture

Looks like another Physical Weekend coming this week. Screw their phony stock market that crashes on GS's command. I want real Money.

Besides, I want my can of popcorn this Christmas. Last year's orders were on 4/18 and 5/10. This is far from over.  

rufusbird's picture

He is so old he does not give a shit...

G-R-U-N-T's picture

Indeed perhaps a Tic or Tourettes disorder obviously an anxiety based mental illness brought on by "Why the fuck isn't this working" syndrome!

Richard Weed's picture

Another Obama voter spending public moneys to ensure that Obama gets re-elected in 2012.

This is beyond disgusting.

Bay of Pigs's picture

Blink, whoop, whoop....oh boy, oh boy.....blink, bitch, slut.....oh boy....

Chump's picture

We've been doing this fucking shit for 3 fucking years now.  It's time for a new approach, like hanging fucking bankers and politicians by the neck until dead.

Monedas's picture

I thought he was chewing gum ! That's a methamphetamine facial tick ! Look at what Hitler did on Meth ! Monedas 2011 Woodrow Wilson World Tour

Americant Expat's picture

I swear I saw a reptilian double eyelid flip in there somewhere. Fucking guy twitches more than a crack whore. Someone get him his fix.

Al Gorerhythm's picture

Down Under, when you have an epic drinking session, it is known as; Going On A Blinder. This guy's nervous twitch is akin to the DTs. One too many blinders gets a mind to thinking like he does.

bigelkhorn's picture

That guy from FFT is very good and called the market crash back in 2008.

 

He reckons there is a good chance the market might bounce here. I just

watched his live video today, He is very good and I love his membership site. 

 

its over at http://forecastfortomorrow.com/Trading-Club

VegasBob's picture

Blinder, Bernokio, Yellen and all the rest of the money-printers are just common counterfeiters.

We should give them the same punishment that was meted out to counterfeiters a hundred years ago.

Execute them!

Al Gorerhythm's picture

Does this prick have an email so that I can send him this, comments inclusive?

I would also like to educate him on the essence of why the constitution established that the Federal Treasury was solely responsible for the issuance of the NATIONS money as opposed to an interest bearing note issued from a private bank. As I'm sure that he is just a paid shill and that he already knows this, I'll post this so that we at least know where to start, when this needs to re-boot (With kudos to Martin Armstrong for digging this quote up).

Adam Smith, (a real economist); Wealth of Nations.

Like an impoverished spendthrift,

whose pressing occasions will not allow him to wait

for regular payment of his revenue,

the state is in the constant practice of borrowing of its own factors and agents, and

of paying interest for the use of its own money.


 

I am more equal than others's picture

That's Pat Paulson in the video.  He's no longer running for president but is using his talent to mock keynesian economics.  Bravo! well done.  So real and displaying the contempt of common sense in such a dead-pan manner.

overmedicatedundersexed's picture

Ben this week per CNN:

"Federal Reserve chief Ben Bernanke reinforced his call on Thursday for Congress to raise the cap on U.S. borrowing, saying a failure to do so could lead down the same risky path that the failure of Lehman Brothers did.

During a Senate Banking Committeee hearing, Bernanke reiterated catastrophic consequences should Congress either fail to raise the limit on borrowing or edge too close to that limit.

"The worst outcome would be one in which the financial system would be again destabilized, which we saw in Lehman, which would have extremely dire consequences for the rest of the economy," Bernanke said, referring to the period following the failure of the Wall Street bank Lehman Brothers at the height of the financial crisis in 2008.""

Hey Ben, this bs worked in 08 so rinse wash and repeat is his meat.

"Somebody has got to go to Jail" no recovery with out JUSTICE.

HastyP's picture

Oh Oh!  I thought this was not going to happen.  Is this good or bad???

Eternal Student's picture

Depends on how you're betting. To clear out all of the bad bets which are keeping us from a proper recovery, this is bad.

And perhaps another warning shot has been fired. I noticed that blogger seems to have screwed up the database for Harvey Organ's blog. One can't post a reply on the most recent posting (Wednesday). And I notice that Harvey hasn't posted today, which he usually does by now, so perhaps he's been cut off.

With all the attacks by the banking trolls, and now this, it makes one wonder. Though I wouldn't rule out blogspot stupidity. I hope you have good backups, Tyler.

P.S. To the Silver Turd. I hope you're designing your new site with a superb recovery strategy, along with some semblence of security. The average button-pushing webmonkey designer has little clue here, and I've never met one who didn't think he was hot stuff until the real pros came along to prove him otherwise.

Hephasteus's picture

Yep. I think the ditto heads are giong to start the programming and the non ditto heads are going to be experiencing tecnical difficulties.

http://crooksandliars.com/susie-madrak/hmm-prominent-conservative-radio-...

Eternal Student's picture

And then ZH goes offline. Hmm. Perhaps the game is afoot.

Hephasteus's picture

Ya they are running some kind of denier campaign.

Climate change deniers.

9/11 deniers.

Next will be birth certificate deniers.

You should see the climate scientists rap about climate change deniers. It's straight out of 1980 don't copy that floppy rap.