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Guest Post: Bernanke’s Jobs Estimate

Tyler Durden's picture




 

Submitted by John Aziz of Azizonomics

Bernanke’s Jobs Estimate

Ben Bernanke at Jackson Hole:

If we are willing to take as a working assumption that the effects of easier financial conditions on the economy are similar to those observed historically, then econometric models can be used to estimate the effects of LSAPs on the economy. Model simulations conducted at the Federal Reserve generally find that the securities purchase programs have provided significant help for the economy. For example, a study using the Board’s FRB/US model of the economy found that, as of 2012, the first two rounds of large scale asset purchases may have raised the level of output by almost 3 percent and increased private payroll employment by more than 2 million jobs, relative to what otherwise would have occurred.

Bernanke’s estimate of two million jobs created as a result of his policy appears to be a stitched-together estimate based on two research papers: Fuhrer which estimated a gain of 700,000 jobs from QE1, and Chung et al which estimated 1,800,000 jobs.

The methodology here is interesting, to say the least. From the (unfortunately titled) Fuhrer paper:

Given the range of estimated effects on real spending (GDP), the translation to employment effects is accomplished by use of an Okun’s Law relationship that links GDP growth and changes in the unemployment rate. The typical relationship expressed in quarterly changes is summarized as: Change in unemployment = -0.125 (GDP growth – potential GDP growth).

 

GDP growth for one-quarter that exceeds potential GDP growth by 1 percentage point results in a one-eighth (0.125) percentage point decline in the unemployment rate. Equivalently, quarterly growth in GDP that exceeds potential growth by 1 percentage point for a year typically lowers the unemployment rate by about one-half percentage point.

 

Combining this simple Okun’s Law with the estimated effects on GDP discussed in the preceding section implies a decline in the unemployment rate of 30-45 basis points over the 2-year period it takes for the spending rate change to feed through the economy. With the U.S. labor force currently at just over 150 million people, this translates to an increase of about 700,000 jobs, a figure quoted by Boston Fed President Eric Rosengren in his speech of November 17, 2010.

The number of layers of uncertainty is problematic. First we have uncertainty over the level of GDP growth provoked by QE. Second we have uncertainty as to the reliability of the measure and concept of potential GDP growth. And third we have uncertainty as to the extent of the relationship between GDP growth, potential GDP growth and unemployment in this specific case.

Essentially, the equation assumes that because GDP growth has historically resulted in job growth, we should assume it will do so in the future. But this is a very different economy to the one we had fifty years ago. Today it’s possible for the financial sector to generate profits (and thus, GDP) by passing liquidity around the financial sector. And today, any American demand boom will create jobs in China and Mexico (etc), because that’s where the industrial and manufacturing jobs have been shipped to.

So Bernanke’s figure is a guess based on a guess based on a guess based on old data. Maybe 2 million. Maybe, maybe, maybe, maybe.

How do we know that after a big, painful bust that after a short burst of deflationary pain that job growth wouldn’t have come roaring back? After all that happened multiple times in the 19th century.

Hank Paulson might claim that he saved the world from a thousand year nuclear winter by bailing out his former employee Goldman at par on its credit default swaps. You can claim anything about what might have happened otherwise. Maybe, maybe, maybe. Such claims are junk science because they are unfalsifiable.

Yet the reality is very clear — either people have jobs or they don’t. That’s what the regime will be judged on.

The present policy of tripling the monetary base via monetary easing hasn’t solved the jobs problem, because we’re still in the woods. Trillions of easing — which we can say quite confidently has enriched the financial sector far more than any other sector of the economy — and yet we still have a jobs depression (of course, financial sector profits have come roaring back). This is the prime age employment-population ratio:

Quantitative easing hasn’t been about jobs. If this was about jobs or stimulating demand, Bernanke would have aimed the helicopter drops at the wider public, as many economists have suggested. This policy of dropping cash directly to the banks is bailing out a dangerous and morally-hazardous financial sector and too-big-to-fail megabanks that remain dangerously overleveraged and under-capitalised, needing endless new liquidity just to keep past debts serviceable. There has been plenty of cash helicopter-dropped onto Wall Street, but nobody on Wall Street has gone to jail for causing the 2008 crisis. Criminal banksters get the huge liquidity injections they want, and the rest get less than crumbs.

 

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Sat, 09/08/2012 - 21:45 | 2775434 prains
prains's picture

would you like to upsize?

Sat, 09/08/2012 - 22:11 | 2775469 UP Forester
UP Forester's picture

I think they should just say they created 300 million jobs, or every job since 1971.

All the damn numbers are as fake as fiat anyhoo....

Sat, 09/08/2012 - 22:59 | 2775523 Michael
Michael's picture

They won't report this on MSM TV, I wonder why?

Unreported World - America - Down and Out

http://www.youtube.com/watch?v=3g6CLglFE4w&feature=related

1 Million Homeless Students In US

http://www.youtube.com/watch?v=EkoZ_4MdhcY&feature=fvwrel

USA tent 'cities' on rise as US economy crumbles (23Dec11)

http://www.youtube.com/watch?v=sWo6daAoY-I

Sat, 09/08/2012 - 23:08 | 2775535 Meesohaawnee
Meesohaawnee's picture

because the msm is the fed's lapdog. The goal being to knive the public into thinking qe is good, stimulative. Its far from stimulative. The use of that word in that context makes me puke

Sat, 09/08/2012 - 23:24 | 2775575 boogerbently
boogerbently's picture

"

"So Bernanke’s figure is a guess based on a guess based on a guess based on old data. Maybe 2 million. Maybe, maybe, maybe, maybe."

 

....sounds like the "evidence" for evolution, to me.

 

The cries from the populist movement are responded to, eventually, by politicians.

I've always wondered why the banks get the $$$ and WE need to pay it back!!!

Let's have ALL "Trillion$$$" from bailout/QE/Twist... repaid by the TBTF, as determined by a "Payback Czar".

 

Sun, 09/09/2012 - 06:47 | 2775851 GetZeeGold
GetZeeGold's picture

 

 

I'm guessing Ben Shalom's estimates are a lot higher than mine.

 

Sun, 09/09/2012 - 13:26 | 2775942 EvlTheCat
EvlTheCat's picture

Only in America "poor" people weigh 300 pounds.

Sun, 09/09/2012 - 03:24 | 2775604 qqqqtrader
qqqqtrader's picture

even if you use their numbers...

no jobs have been created

Employment Level from BLS

Jan2009 = 142,187,000

Aug2012 = 142,101,000

qqqqcharts

Sun, 09/09/2012 - 01:15 | 2775713 dbomb12
dbomb12's picture

Chart from John Williams at Shadow Government statistics shows REAL unemployment at 23%. That number is more believable

Sun, 09/09/2012 - 09:58 | 2775995 oleander garch
oleander garch's picture

Does not the Chairman's argument also mean that he and monetary policy  - not President Obama and his stimulus policy - should get the credit for essentially all the job creation under the Obama Administration? 

Sat, 09/08/2012 - 23:58 | 2775634 PY-129-20
PY-129-20's picture

Remember "Free labour is better than cheap labour"? Seems even that didn't 't work...Goodbye CEO Textor...

"Last Tuesday, Digital Domain (DD) released an announcement saying it had defaulted on a payment to a $35 million loan as well as some accrued interest of another $16 million. Digital Domain is closing operations in Port St. Lucie, the company announced Friday morning. The Los Angeles and Vancouver studios are healthy and ongoing. The Digital Domain Institute, based in West Palm Beach is said to be in good shape.
According to a news release, Digital Domain Media Group will be "reducing virtually its entire Port St. Lucie workforce, retaining approximately 20 employees who will remain as part of the wind-down."

http://www.youtube.com/watch?v=HRHBiM4gp9s&feature=player_detailpage

Sat, 09/08/2012 - 23:10 | 2775542 Manthong
Manthong's picture

They may very well do domething like that.

But don't be surprised if that is after they try to mandate all of your gold into the government's hands at current suppressed prices or attempt to impose a 95% windfall prifits tax on gold.

Note my usage of the words "try" and "attempt".

Sun, 09/09/2012 - 01:09 | 2775709 robertocarlos
robertocarlos's picture

So even if you are lucky enough to have found a Spanish chest full of gold Eagles at the bottom of Lake Minnetonka you'll be taxed to death.

Sun, 09/09/2012 - 05:46 | 2775827 trebuchet
trebuchet's picture

of course you will.  coz the tax authorities knew it was there in the first place and knew it when you found it and so prepared the tax bill. 

 duh.

Sat, 09/08/2012 - 23:32 | 2775584 boogerbently
boogerbently's picture

Richard....any relation to Bertrand??

Gold to $10,000 is EXACTLY what I'm (hoping for) betting on.

Sell gold equities pre-Nov. election, buy physical pre-WWIII/USDabandon/return to gold standard. 

Sat, 09/08/2012 - 23:03 | 2775530 Ineverslice
Ineverslice's picture

Catherine's the bomb... i always take a listen to what this gal has to say.

Sat, 09/08/2012 - 21:48 | 2775442 Jason T
Jason T's picture

the rest of us get $3.96 gas

 

Sat, 09/08/2012 - 23:02 | 2775522 Seasmoke
Seasmoke's picture

i just read an article TODAY, that gas prices have dropped a few pennies the past 2 weeks.....MY EYES have seen gas prices go up .30 the past 2 weeks (and i have receipts to prove my eyes are not failing me !!!)......the lies are coming faster and faster now

Sat, 09/08/2012 - 23:33 | 2775591 boogerbently
boogerbently's picture

....believe only half of what you see, and 100% of what you hear/read from the MSM.

<sarc>

Sun, 09/09/2012 - 07:53 | 2775896 negative rates
negative rates's picture

Round here they go up 30 cents in one day and then simply hang out for a while.

Sat, 09/08/2012 - 21:53 | 2775448 yogibear
yogibear's picture

Benny Bernanke is a Wall Street tool. Goldman tells him to dance and he dances.

Benny uses ammunition now and at the end of the he will be shooting blanks when the cliff comes.

The Market is already in a QE euphoric state.

 

Sat, 09/08/2012 - 21:58 | 2775451 The Axe
The Axe's picture

Fight Club....never let a scumbag tell you its about jobs....  or we have a strong dollar policy....just buy ammo and gold...cause you will need it!!!

Sat, 09/08/2012 - 22:02 | 2775457 Bicycle Repairman
Bicycle Repairman's picture

"Quantitative easing hasn’t been about jobs. [....] This policy of dropping cash directly to the banks is bailing out a dangerous and morally-hazardous financial sector and too-big-to-fail mega-banks that remain dangerously over-leveraged and under-capitalized, needing endless new liquidity just to keep past debts serviceable."

When will the next QE occur?  When the banks need it to stay solvent.  And nothing is going to mitigate this printing.  Not inflation or anything else about the real economy.

Sat, 09/08/2012 - 23:10 | 2775545 FRBNYrCROOKS
FRBNYrCROOKS's picture

QE is about printing enough money to enable RePurchase Agreements so bank can appear solvent when they are actually bankrupt.

Without the REPO we would see who has a swimsuit when the tide goes out. 

QE is keeping the tide high so we won't see the truth.

Sat, 09/08/2012 - 23:36 | 2775599 boogerbently
boogerbently's picture

....yeah,

But the Lakers got Dwight Howard, so............

Sat, 09/08/2012 - 22:07 | 2775466 Atomizer
Atomizer's picture

Yo When things git closer ta da election date, Department o' Hoe Sexuality will be playing uh song from 1978. Many will stare into each others peeps thinkin`, how did we's arrive ta dis here phony bullshit illusion Ya' dig? 

Anthrax

 

Ben, you’re a man who studied the depression. You have succeeded in pitching your thesis outcome. Bravo!!

Sat, 09/08/2012 - 22:07 | 2775467 AllWorkedUp
AllWorkedUp's picture

Only one way to handle these bastards. String em' up!

Sat, 09/08/2012 - 22:07 | 2775468 Dr. Engali
Dr. Engali's picture

The argument: " but it could have been so much worse" drives me insane every time I hear it. Here we are four years later and it's only getting worse. If we would have ripped off the band aid we could be rebuilding, instead the market distortions get larger, the anger grows deeper, and the eventual outcome is going to be much worse.

Sat, 09/08/2012 - 22:20 | 2775481 fonzannoon
fonzannoon's picture

We need one nice big burp of inflation. This frog in warm water shit is working too well. People are going to have to get their balls shocked a bit. Maybe that well snap em out of this malaise. But the frog in warm water scenario is working so well....why stop?

Sat, 09/08/2012 - 23:46 | 2775611 sosoome
sosoome's picture

What we need is to leave it alone and let it deflate like it wants (needs) to do. It'd be painful, but the dead wood would be removed much quicker.

Sun, 09/09/2012 - 05:14 | 2775813 Element
Element's picture

Thingamajigs bitchez!

Sat, 09/08/2012 - 22:31 | 2775495 A Lunatic
A Lunatic's picture

and the eventual outcome is going to be much worse.

 

 

You mean something like this perhaps?

When The Music Stops – How America’s Cities May Explode In Violence 

Sat, 09/08/2012 - 23:00 | 2775527 Dr. Engali
Dr. Engali's picture

That was a pretty good link. Thanks.

Sun, 09/09/2012 - 08:39 | 2775924 spentCartridge
spentCartridge's picture

Grand Theft Auto, bitchez ...

Sat, 09/08/2012 - 22:17 | 2775478 CDSMonkey
CDSMonkey's picture

Seriously, why not give everyone $1 million and let trickle up work

Sat, 09/08/2012 - 22:46 | 2775510 nmewn
nmewn's picture

Conceptually, I think the problem is "give".

It still leaves the idea that government is greater than the individual. Its not. Governments and their assorted currencies have risen and fallen for centuries, the people always remain. They will admit their arrogance, defeat and deceit to us and return the respect of our own labors to us, to do with as we please, (debt free) or in my opinion, we stay on strike and they can print itself into oblivion again. 

Their choice...and there has never been or ever will be a compromise over this.

Sat, 09/08/2012 - 22:47 | 2775515 fonzannoon
fonzannoon's picture

In the meantime...come visit NYC, check out the village. Enjoy the group setting. Leave your car at home...

http://www.nypost.com/p/news/local/manhattan/trash_dancing_iSCNSoG3LlHta6Hb9DSmPO

Sat, 09/08/2012 - 23:05 | 2775531 Dr. Engali
Dr. Engali's picture

Hey Fonz check out the link that A Lunatic provided in a reply to my previous post. Be careful in New York.

Sat, 09/08/2012 - 23:48 | 2775547 fonzannoon
fonzannoon's picture

That link scared the shit out of me.

Sun, 09/09/2012 - 04:51 | 2775796 Dr. Engali
Dr. Engali's picture

Yeah me too. After I read that I hit your link and thought ... "holy crap and this is with the ebt cards currently working...."

Sun, 09/09/2012 - 12:32 | 2776242 Shell Game
Shell Game's picture

+1  Much better than I could have said.  When .gov gives, it really means they take.

Sat, 09/08/2012 - 22:49 | 2775517 Atomizer
Sun, 09/09/2012 - 18:08 | 2776845 sessinpo
sessinpo's picture

Perhaps because that would actually be money circulated in the economy instead of being held by financial institutions. Such a huge influx of circulated money would be hyperflation and your $1,000,000 gift might buy you a loaf of bread.

Sun, 09/09/2012 - 05:25 | 2775482 ebworthen
ebworthen's picture

Ben Bernanke, PhD, does not get the most basic of concepts.

"Debt spending and bailing out the drunk nephew/uncle/child does not create positive results for the rest of the family."

Figure it out you DUMB FUCK!

Sat, 09/08/2012 - 22:27 | 2775491 Pure Evil
Pure Evil's picture

 

From the (unfortunately titled) Fuhrer paper:

 

Sieg Heil anyone?

 

Oh my, the Reichstag is burning again.

Sat, 09/08/2012 - 22:31 | 2775496 Amish Hacker
Amish Hacker's picture

This whole line of reasoning is just blatant self-justification for a policy known to have failed, dressed up with a lot of pseudo-academic numerology.

If we hadn't had the arms race with the Soviets, we would have had a nuclear war.

If we hadn't invaded Iraq, the Midle East would be in even worse shape than it is.

(Add you own examples here...)

 

Sat, 09/08/2012 - 22:37 | 2775505 FRBNYrCROOKS
FRBNYrCROOKS's picture

Make REPurchaseAgreements against the law and all banks would fail tomorrow.

NO REPO

Sat, 09/08/2012 - 22:47 | 2775514 DavosSherman
DavosSherman's picture

Unemployment is 23.8%.  Who the fuck in their right mind gives a flying shit about what Bernanke thinks or says.  The guy is a corrupt POS lying moron.

Sun, 09/09/2012 - 05:12 | 2775807 James
James's picture

Bernanke is not a moron.

He was put there to oversee the complete destruction of the U.S. economy.

What else could it be? Four years has gone by and it continually gets worse for all but Ben and his cronys.No relief in sight.

The general public wants to believe that the system is looking out for them when in fact it won't be long 'til we all see Bens handiwork.

This was done intentionally w/malice and forethought to achieve a criminal end that only Ben and his co-conspiritors know of.

They have bought off politicians, the courts,prosecutors(Holder) and i'm going to say the brass @ the pentagon.

I would have never guessed that the Latin term SEMPER FI actually meant  meatloaf on Tuesdays @ the VFW.

Is there anyone more despicable than those who swore an OATH to protect this Nation from enemies foreign and domestic and did'nt?

One day I'll meet my maker and we'll have a talk.

That conversation won't include my swearing on a Bible,to God, and blowing that off.

Semper Fi you motherfuckers to the depths of hell.

Every last damn one of you.

What I despise the most is @ one time you had my utmost respect and I stupidly believed you.You lied.That's o.k. as i see it's all the rage now.

I hold you in the utmost contempt.

Sun, 09/09/2012 - 09:30 | 2775965 DavosSherman
DavosSherman's picture

James: Anyone who fucks this country over IS A FUCKING MORON.

And it wasn't just Bernanke.  

Go back to the 1980s during the Keating S&L corruption where Keating bribed 5 Senators (Alan Cranston, John Glenn (yah, the fucking astronaut and Semper Fi Marine), John Mcain, Donald Riegle and Denni DeConcini).

He also paid Greenspan $40,000.00 to write letters and walk around DC with Keating telling regulators that Keating had good character and solid business methods.  Ronnie Reagan was so impressed that he made Greenspan Chairman of the Fed.

Then we can talk about Larry Summers who was voted out of leadership by just about every professor at Harvard.  He then helped muzzle Brooksley Born and off shore our jobs.  Or Rubin.  Or Paulson.

They are all fucking morons.  You don't starve the peasants.

Sun, 09/09/2012 - 14:21 | 2776440 DosZap
DosZap's picture

Is there anyone more despicable than those who swore an OATH to protect this Nation from enemies foreign and domestic and did'nt?

 

Yep,the one's you will see obey UN-Constitutional orders, and by doing so, break their oath.

They will be lower than POND SCUM.

That Oath is for LIFE.

Sat, 09/08/2012 - 23:00 | 2775525 Ineverslice
Ineverslice's picture

I think QE has mostly been about Commercial Real Estate.

Look around your town and notice the zombified spaces, and then go take a gander at where the commercial reits are trading at..

you think residential hasn't come to terms with price discovery?  Fuggitaboutit!

cmbs = The Alamo

Sat, 09/08/2012 - 23:07 | 2775533 Nid
Nid's picture

"Potential GDP"; this type of smoke&mirrors, hypothetical bullshit is precisely why these academic fucks should remain in their Ivory Towers chasing easily impressed coeds.

Sat, 09/08/2012 - 23:18 | 2775563 FRBNYrCROOKS
FRBNYrCROOKS's picture

Sorry for the double post but, I thought it important.

QE is about printing enough money to enable RePurchase Agreements so bank can appear solvent when they are actually bankrupt.

Without the REPO we would see who has a swimsuit when the tide goes out. 

QE is keeping the tide high so we won't see the truth.

Sat, 09/08/2012 - 23:47 | 2775615 Bernankenstein
Bernankenstein's picture

 

It's about time I listened to the people, so I am taking a vote by acclamation:

All in favor of QE this coming week, say aye:  ….... ”aye”

All opposed, say nay:…”NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY, NAY,….!!!!!!!!!!”

 

My sources say the "ayes" have it. I love democracy.   (-:

 


 

Sun, 09/09/2012 - 14:12 | 2776410 DosZap
DosZap's picture

It's about time I listened to the people, so I am taking a vote by acclamation:

All in favor of QE this coming week, say aye: ….... ”aye”

 

Sounds like the three time REVOTE at the Dem convention on GOD, and Jerusalem as capitol of Israel..........

Speaker was aghast, took 3 votes, and all WERE against including BOTH.

Then, he Ayed it approved............................the poor schmuck, damage control asap after the truth was known.

Sun, 09/09/2012 - 00:16 | 2775656 zorba THE GREEK
zorba THE GREEK's picture

Bernanke works for the devil. Once you understand that simple fact, the purpose

of all his actions to date are clear and logical. 

Sun, 09/09/2012 - 00:27 | 2775664 Dogbark
Dogbark's picture

Only one job was created - Obama's.

Sun, 09/09/2012 - 00:34 | 2775676 q99x2
q99x2's picture

My guess is that the US would have more jobs than ever if we abolished the FED and parasitic financial industry completely. Kind of difficult to do anything while having to feed those predators, financial terrorist M'fers.

Sun, 09/09/2012 - 00:45 | 2775683 Dogbark
Dogbark's picture

Every employer can submit a report of current employee numbers and Bernanke can use a calculator to count it, since the number will be so small. Divide this number by the number of eligible people who do not pay taxes (50%) - unemployment is 50%. This cannot last long.

Sun, 09/09/2012 - 01:00 | 2775700 El Tuco
El Tuco's picture

Has anyone got thier $3000 check yet? What the fuck is taking so long? i"ve got some Whatchamacallit's to buy.

Sun, 09/09/2012 - 01:37 | 2775731 alentia
alentia's picture

Why everyone is bashing Ben?

Let see what he has to deal with:

1. Balooning Goverment Debt - Pressure from Tresury to keep rates down.

2. High unemployment

3. Greedy banks with tons of MBS on their hands

4. People with gold holdings (just kidding)

5. Minimum Wage law

6. SS Ponzi Scheme

7. Service oriented economy  

This is just short laundry list and he has to kill at least 7 birds with one stone. Place yourself into his chair.

To revive economy one has to lower unemployment rate, to lower unemployment rate you have to lower Minimum Wage. Only inflation will solve the issues as there is no political will to abolish or lower MW and SS. Inflation will effectively deal with all of the above except for #1, however if QE dollars buy T-Bills #1 will be satisfied too. US needs at least 5% inflation and USD Index at around 50. There is nothing Ben can do about Goverment regulations which do not help any business in the US to prosper anymore.

Let see other side of the coin:

1. Bernanke tighten policy to start with to 3% FED rate

2. Stop buying US Gov. Debt

We will have immediate collapse of everything in the laundry list and civil war. What do you want?

Do not blame Ben, this is as much as he can do. Act accordingly. Buy Gold.

Sun, 09/09/2012 - 05:44 | 2775824 James
James's picture

The FEDS have already inflated away 96% of the dollars value and you want to inflate more?

And the problem is some poor sap making 7.25 an hour?

SS is indexed to inflation so how's inflation going to help that?

Curious. What alphabet agency do you work for Mr. 4 weeks?

Sun, 09/09/2012 - 11:18 | 2776102 alentia
alentia's picture

Yes it is the problem if someone is making $7.25 an hour and market can pay $3 an hour or less  for the same labor.

The problem is that people getting extended SS benefits instead of going to work for $3 per hour.

The problem is that people got used to Gov. support instead of supporting themselves.

Bashing Ben on the forum will not help, making Gov. change their socialist totalitarian "nanny state" behaviour will.

"People deserve their government" - most likely americans are turning to socialism, that is why Ron Paul is not getting popularity anywhere outside of Texas. Schiff's "kill corporations" interviews at NDC shows real stupidity of Demotracts representing 50% or more of US population based on last election results.

Americans sold their freedom for state security! Americans gave up their rights to think and make choices to the government!

Sun, 09/09/2012 - 07:08 | 2775860 Papasmurf
Papasmurf's picture

To revive the economy, you have to restore confidence.  Currently we have a failure of confidence in the financial system because of rampant fraud that has gone without prosecution and without consequences.  Assets are circulating in the financial system where they don't create goods and services.  Each time money circles the financial system, more gets skimmed off in this unproductive activity.  Money in the financial system doesn't add to GDP, though it's wrongly included in GDP calculations.  The economy would recover if fraud was prosecuted and the money clawed back and tilled back into productive activities.

Sun, 09/09/2012 - 08:06 | 2775901 negative rates
negative rates's picture

The best time to grow an economy is when energy prices are low, and coincidently that is  that same time it is best to raise taxes. That folks was the same time as the bush tax cuts extensions, a very unwise move by an ever more greedy upper class. Now that energy prices are high, austerity is needed to increase the efficiency of the inflated economy. Yet politicians want to return to the days of cheap energy policy although the energy is not cheap. This is how you know that a politician has no idea what they are doing. 

.....What do you call a deer with no eyes? No eye deer. What do you call a deer with no eyes and no prick?? No fucking eye deer. What do you call a dead deer with no eyes and no prick?? Still no fucking eye deer. 

Sun, 09/09/2012 - 01:51 | 2775743 lolmao500
lolmao500's picture

Too bad the pic is not a pic of Bernanke having an aneurysm.

Sun, 09/09/2012 - 09:09 | 2775948 Ned Zeppelin
Ned Zeppelin's picture

They'd just select another tool from the box.

Sun, 09/09/2012 - 09:12 | 2775952 i-dog
i-dog's picture

Indeed. Bringing on another wrestler from the changing room doesn't change the script or the game.

Sun, 09/09/2012 - 02:07 | 2775755 intric8
intric8's picture

Reality does not jive with the fed rhetoric. It is what it is. If Ben wants to manufacture figures based on mathematical and logical fallacies, it's also to save face from public embarassment.

Sun, 09/09/2012 - 05:39 | 2775825 buzzsaw99
buzzsaw99's picture

efficiency gains are great for gdp. in the fed's utopia all labor in the world would be handled by one person who worked for one stale peanut per year.

Sun, 09/09/2012 - 05:11 | 2775812 buzzsaw99
buzzsaw99's picture

crony crapitalism. to the bernank the only bad inflation is wage inflation. the war starts at the top.

Sun, 09/09/2012 - 06:09 | 2775835 James
James's picture

I keep having this recurring nighmare where Bernanke is pacing the floor of a New York City 5 star hotel top floor penthouse suite lit only by the skyline sweating profusely as he sucks on a cocktail laughing diabolically that on his 100 year plan for the feds to blow up financially the world is coming to fruition

Bwwaaaaa

Sun, 09/09/2012 - 06:26 | 2775841 Ponzi_Scheme
Ponzi_Scheme's picture

Simply for saying this;

"...today, any American demand boom will create jobs in China and Mexico (etc), because that’s where the industrial and manufacturing jobs have been shipped to."

... Makes you more qualified to be running for office than any other ass hat out there... You admit the problem. Now... The solution ?.

Sun, 09/09/2012 - 08:04 | 2775900 AurorusBorealus
AurorusBorealus's picture

"You can claim anything about what might have happened otherwise. Maybe, maybe, maybe. Such claims are junk science because they are unfalsifiable."

John Aziz gives me some hope that there might be an economist or two out there who believes that, if political economy wishes to claim the mantle of science, it must reference real-world facts, and be, above all, an empirical discipline: not a jumble of math and models trotted out willy-nilly with a smattering of data to explain why we always need to print more money, or why laissez-faire capitalism will solve every problem, because Adam Smith's "invisible hand" magically does so.

Sun, 09/09/2012 - 08:38 | 2775923 Aziz
Aziz's picture

Yo.

Thanks.

Sun, 09/09/2012 - 08:29 | 2775919 pndr4495
pndr4495's picture

Bernanke is paid to protect and enhance the CONTROL value of owning the franchise to issue this country's money. He does not care whether jobs are created or destroyed. The purpose of The Fed is to make it's owners richer than they are already - that's it , nothing more.

Sun, 09/09/2012 - 09:07 | 2775946 geewhiz
geewhiz's picture

I don't know why people don't accept this and stop wasting time commenting on how stupid Bernanke is. He is promulgating the cover story that justifies the Ponzi scheme to further enrich his private bosses and he is executing thier agenda. They know if they do this scheme for too long they will make thier fake dollar product worthless. I would bet they sequester thier stolen assets in things like gold bullion, real estate, and good equities. They will either stop printing and blame goverment for not cutting spending/raising revenue or destroy the dollar. Maybe they can't stop printing or the money addicts they helped create will get mad and actually end the Fed and fuck up thier dollyhouse. I find it facinating to try and get into the darkitects mind and see how they will try to engineer a sustainable Ponzi scheme. You have to admit these guys are good at what they do.

Sun, 09/09/2012 - 09:16 | 2775956 realtick
realtick's picture

Big Thinker Types Vs. Political Shills: Wise Up JoeWe

http://chartistfriendfrompittsburgh.blogspot.com/2012/09/big-thinker-typ...

Sun, 09/09/2012 - 10:39 | 2776041 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Ah, who needs science when you can run simulations and posit the results as counterfactuals.

Under that assumption, economics is the ultimate ruse. Seems like science. Not science. Not even Art. Just bad graffiti.

Sun, 09/09/2012 - 10:56 | 2776065 Freewheelin Franklin
Freewheelin Franklin's picture

Criminal banksters get the huge liquidity injections they want, and the rest get less than crumbs.

 

We get stuck with the future price inflation.

Sun, 09/09/2012 - 15:07 | 2776564 Snakeeyes
Sun, 09/09/2012 - 21:33 | 2777218 BaggerDon
BaggerDon's picture

This you tube video pretty much sums it up.......http://www.youtube.com/watch?v=iYgGMrGgMzI&feature=channel&list=UL

Sun, 09/09/2012 - 21:36 | 2777219 newengland
newengland's picture

No matter what he does, Bernanke is just another tool of State and corporatists.

Got a problem with that? Change it. Advocate an audit of the Fed, and the 10th Amendment, the sovereignty of states, and defend the Republic, the Constitution and Bill of Rights.

Is that difficult? Yes, it is.

Too difficult? Reduce your personal debt. Buy gold and silver bullion.

When this mess is over, the strong will need to protect the survivors, and vice versa.

Running away to a foreign land merely makes you more vulnerable. Stand and fight for the Republic. Bernanke is not your problem. Look in the mirror for the problem.

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