This page has been archived and commenting is disabled.
Bernanke's Mentor Diamond Rejected By Senate For Fed Board After Shelby Alleges Lack Of Inkjet Cartridge Qualifications
For somebody of Richard Shelby's "phenomenal" skill set (at destroying capital markets) to say that someone else is unqualified to do something, is the proverbial slap in the face, with a wrecking ball. Yet a textbook example of a pot calling a kettle black is precisely what happened today when the Alabama senator said Bernanke's former economics professor, and thus implicitly the man responsible for the destruction of America's middle class, was "unqualified" to make decisions on monetary policy. Um, what the hell does one need to be a skilled monetarist, aside, of course, from a willingness to accept orders from Goldman, when the firm with actual leverage of 100:1 blows up on yet another trade, or lowering the fed funds rate to -5% whenever the latest theatrical dictator of Congress calls and demands that the "politically independent" Fed do everything to boost jobs, AMZN to $1,000 be damned, without batting an eyelid? Anyway, it looks like the president will have to once again resubmit the application of Peter Diamond to the Fed's board. And since the Senate took no action on the other two applicants, Yellen and some other female uberdove, it seems that with Kohn's departure on September 1st, the Fed will have just 4 governors until September 13, at the earliest, which is the minimum quorum for a decision. In other words, if anyone wants to really destabilize the country, the two weeks in early September should prove to be quite a good opportunity to strike.
More from Bloomberg:
The Senate sent the nomination of Peter Diamond, one of President Barack Obama’s three nominees for the Federal Reserve Board, back to the White House because of objections from at least one lawmaker.
The office of the executive clerk of the Senate said the procedural move occurred as part of actions taken on nominees without debate before the chamber left for a summer break. Don Stewart, a spokesman for Senate Republican Leader Mitch McConnell, said he expects the White House will resubmit the nomination.
While Diamond, 70, may still win confirmation, it’s a snag for the Massachusetts Institute of Technology economics professor who once taught Fed Chairman Ben S. Bernanke. Alabama Senator Richard Shelby, the senior Republican on the Banking Committee, said last week that Diamond, while a “skilled economist,” may not be qualified to make decisions on monetary policy.
The Senate took no action yesterday on the other two nominees, including San Francisco Fed President Janet Yellen for vice chairman and Sarah Bloom Raskin for a governor slot, leaving them to await confirmation after senators return Sept. 13. That means that if Governor Donald Kohn, whose separate term as vice chairman ended in June, departs as planned on Sept. 1, the Fed may be down to four governors for an unknown time.
“It’s very hard for the Federal Reserve to operate with only five people,” said former Fed Governor H. Robert Heller, who served on the board from 1986 to 1989. “Four is the minimum for a quorum. To have the Fed at full strength with seven persons there is very important.”
“Professor Diamond is a skilled economist and certainly an expert on tax policy and on the Social Security system,” Shelby said July 28. “However, I do not believe he’s ready to be a member of the Federal Reserve Board. I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job.”
Dodd said last week he “enthusiastically” supported all three picks for the Fed. “Each brings a remarkable combination of skills and experience,” he said before the committee vote. Dodd said he expected a floor vote on the nominees in September.
Read: someone did not explain to the wannabe master of the printer that to gain access to the promised refill cartridge, he has to briber everyone equally, not just outgoing lame duck senators.
»
- 6827 reads
- Printer-friendly version
- Send to friend
- advertisements -
"anyone wants to really destabilize the country" - that is what our government has been doing since 1913.
A decreasing number of Fedheads might be a stabilizing influence.
Yeah, "3" sounds about perfect
I vote for "0".
'0' rhymes more!!
I thought he meant Jamie Dimon when I clicked on this story. I was thinking WHOA NELLY!
Why not? Just stick Jamie and Lloyd Blank-check on the Fed board...
At least we could agree it would be Truth About Markets (sorry mad max...)
In other words, if anyone wants to really destabilize the country, the two weeks in early September should prove to be quite a good opportunity to strike.
Dangerous comment to make in today's world.
Can the Chinese just pull the trigger already and start buying gold or selling treasuries in the open. Or maybe the Russians & Saudis only excepting gold/silver/commodity currency for trade settlement.
you will know when that happens because of the next distraction.
I'm only half kidding when I say a US funded and armed Colombian war against Venezuela. It really doesn't matter who starts it, because it will all be lies after that.
Disclosure: I have no love for Chavez and would love to see him get the Mussolini treatment, but the industrial military complex needs bad guys and Chavez is perfect, he's almost cartoony. Plus he's got lots of oil in our own back yard.
Perhaps a coordinated 'attack' is in the offing.
When Congress spends time doing stupid things it shouldn't be doing,
it is not doing even stupider things it shouldn't be doing.
Where do I get such a cushy job with so much time off?
Last posting of this guy today :)
Happy weekend y'all!
http://www.youtube.com/view_play_list?p=33135E8E214454B3
ps: come for the Lange - Mat Zo track, stay for the scottish man telling jokes
Excuse me Tyler but I'm sure Peter Diamond showed everyone his good housekeeping seal of approval from HP, the proverbial king of ink-jet cartridges. Shelby clearly didn't get the memo from HP.
Or worse, he had another unfortunate sexual incident with an extra large capacity HP color cartridge during Senatorial sexual play time and had to blame someone for his pain in his ass. At least we finally have proof that Shelby bleeds HP Patriotic Red for his country.
Um, I wouldn't touch that if I were you.
LOL!
Shelby writes with a bird feather and a bottle of ink...
That senile old fossil is from the Edsel era...How do you think that corrupt, thoroughly bribed old coot inked in the comb over toupee on his noggin in the first place? The quill & calligrapher's ink...
You go to the soda machine and stick a dollar bill in. It makes a noise and spits it back out.
Whataya do?
Stick it back in!
I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job
Exactly who has done this before? Did this space-time already happen once? Or does Shelby only want people who refuse to learn anything on the job? That would make sense in the case of Benron. What a dumbass argument.
Tyler, really "some other female uberdove"?
Disappointed at the lack of respect for her professional achievements.
She is, after all, a gradute of the Harvard Law School and wrote her undergrad thesis on monetary policy.
Hmmm....she actually should be president, with that CV, (except for the small fact that she lacks community organizing skills, but i digress).
I voted for Obama because I expected him to appoint more Blacks to positions of influence but all we get is more tribesmen.
You're trying too hard and are slipping out of character. Tone it back a bit for maximum effect.
I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant.
OK, that's far enough back. Now try moving a little bit more to your left. No, the other left.
There, perfect.
Just pull the ball away when He comes running, Lucy, er, Lizzy.
When He is lying there on His back your words will sink in better...
All of that is political speak for "I need a bigger piece of pork before i support your nominee"
As for this Shelby character, he's a two bit cracker with the brain of a lizard.
"I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job.”
Seriously... Who the fuck on the board actually knows what they are doing?
<S> Maybe they are waiting for another Kagen? </S>
Sheesh. How many PhDs does a person needs these days to carry the one?
Maybe if we keep sending enough of them backing the entire board will be empty and we can have unmanipulated free markets for a change
Wait a sec - so it's bad news that this Keynsian lunatic and his fellow travelers aren't going to be joining Benron and the rest of the merry band of monatirists on the FedCo BOD?
Seems to me that, accidently though it likely is, Old Richard (D-to-R-AL) might have actually done the country a bit of actual service here. What?
A temporary abnormality that will be quickly rectified. The WH is resubmitting his nomination. So there's hope yet.
If at first you don't succeed, bribe, bribe again.
Is anyone even bothering to watch the market. A 2 point range on the S&P for almost three hours. Seems everyone got bored and left.
Suddenly, amazingly and, of course, surprisingly the RAMP begins with a quick 5 point SP rally. This day may end up as a non-deal.
Come now, lad. This ain't your first rodeo.
You, of course, saw this coming. Right?
Of course.
I'm wondering now if the Crew will be brazen enough to actually close the market higher. Probably not. We'll most likely fade again into the close. However, if the market does close higher, this evening's headlines attempting to provide rationale would prove to be very entertaining reading.
If anyone has any doubts about QE2, here you go: From the very man himself
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
" Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."And if that's not convincing enough:
"One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation"
And as an excelent joke from Ben Shalom:
"The claim that deflation can be ended by sufficiently strong action has no doubt led you to wonder, if that is the case, why has Japan not ended its deflation? The Japanese situation is a complex one that I cannot fully discuss today. I will just make two brief, general points.
First, as you know, Japan's economy faces some significant barriers to growth besides deflation, including massive financial problems in the banking and corporate sectors and a large overhang of government debt. Plausibly, private-sector financial problems have muted the effects of the monetary policies that have been tried in Japan, even as the heavy overhang of government debt has made Japanese policymakers more reluctant to use aggressive fiscal policies (for evidence see, for example, Posen, 1998). Fortunately, the U.S. economy does not share these problems, at least not to anything like the same degree, suggesting that anti-deflationary monetary and fiscal policies would be more potent here than they have been in Japan"
Any more doubts?
macroeconomist:
Thanks for the post.
The truth is undeniable, longwinded. belief based rationalizations without real quantitive support aren't worth the paper they are written on.
In this era of supercomputer power sufficient to model chemical reactions with sufficient accuracy to create all kinds of magic new materials, including the recent case of growing a duplicate cell with man made DNA, the economists are still operating from trend projections instead of actual quantitative measures.
yes they have enormous amounts of data to crunch but the cost of inaccurate modeling is very great.
Is the problem that "priests in the temple" want things just as vague as they are, no matter how much pain the public is feeling.
Dr. Merton, where are you? Does anyone doubt that MIT can access lots of capable mathematica /computer talent.
You make the assumption that economics can be accurately modeled...this is not a foregone conclusion. In fact I would say the evidence is stacked up pretty high against that assumption.
The priests in the temple use plenty of modeling to justify policy. If they are doing it intentionally, or not...doesn't matter, they're just as wrong. As long as the current people are in power, the policies will be what they want them to be, models or not.
Yep. The edifice of horseshit they've built on the false equation of human actors with unthinking particles is perhaps the biggest waste of time and energy outside the world wars.
Oh I forgot to quote my favourite bit:
"The Fed can inject money into the economy in still other ways. For example, the Fed has the authority to buy foreign government debt, as well as domestic government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt."
Bail-out Europe Ben, they desperately need you...
If I was given a rejection letter by that useless ass-munch Dick Shelby, I would have it framed, put that in my trophy case above the inscription "Those Nobel winning bastards got nothing on me".
Correct me if I am wrong but did Shelby vote against the repel of Glass Steagall ?
If so he is perhaps not the worst of them.
Sounds as though Shelby wants to have done with East Coast financial establishment guys. Maybe he wants a Jacksonian type solution. That should really fix things.
Every time i start thinking Shelby is OK, something like this happens.
"In other words, if anyone wants to really destabilize the country, the two weeks in early September should prove to be quite a good opportunity to strike."
jeeese, gotta hand it to ZH, always (AHEM!) two steps ahead.