Entries in Ben Bernanke (4)


Paul Krugman: Ben Bernanke Has Been ‘Assimilated by the Borg’

ABC News (NEW YORK) -- In what is just the latest in the war of the words between the nation’s top liberal economist and the nation’s top central banker, Nobel Prize-winning economist Paul Krugman took Federal Reserve Chairman Ben Bernanke to task on “This Week” today, saying the head of the Fed has been “assimilated by the borg” and should be doing more to address the high unemployment in the country.

“I think what’s happened to Bernanke, as they say, he’s been assimilated by the Borg, he’s become — he’s become more concerned, probably unconsciously, with defending the Fed’s institutional safety, because it’s the apostle of price stability, than with doing whatever he can to get this economy moving. Which if he’d listened to Professor Bernanke, himself ten years ago, he would know that he was supposed to be doing more,” said Krugman, a columnist for The New York Times. “We’ve defined recklessness the wrong way.  We think that anything that rocks the boat and is not certain in its outcome would be reckless. But actually allowing unemployment to stay near 9 percent, allowing the number of long-term unemployed to be 4 million, which it hasn’t been since the 1930s, which is destroying skills, destroying the attachment of workers to the workforce.”

The spat between the two economists erupted earlier this week when The New York Times Magazine published an article online by Krugman titled “Earth to Ben Bernanke.” In it, Krugman essentially argues that there is a disparity between the type of action during a financial crisis that Ben Bernanke advocated for before he became head of the Federal Reserve and the action Bernanke has actually taken during his tenure as chairman. Given this, Krugman assigns some blame to Bernanke for the ongoing suffering of many Americans.

“While the Fed went to great lengths to rescue the financial system, it has done far less to rescue workers. The U.S. economy remains deeply depressed, with long-term unemployment in particular still disastrously high, a point Bernanke himself has recently emphasized. Yet the Fed isn’t taking strong action to rectify the situation,” wrote Krugman. “The Bernanke Conundrum — the divergence between what Professor Bernanke advocated and what Chairman Bernanke has actually done — can be reconciled in a few possible ways. Maybe Professor Bernanke was wrong, and there’s nothing more a policy maker in this situation can do. Maybe politics are the impediment, and Chairman Bernanke has been forced to hide his inner professor. Or maybe the onetime academic has been assimilated by the Fed Borg and turned into a conventional central banker. Whichever account you prefer, however, the fact is that the Fed isn’t doing the job many economists expected it to do, and a result is mass suffering for American workers,” he wrote.

Bernanke was asked about Krugman’s article – albeit not directly – by reporter Binyamin Appelbaum. In his response, Bernanke argued that his own actions as head of the Federal Reserve have been consistent and that those who argue otherwise are “absolutely incorrect.”

“There’s this view circulating that the views I expressed about 15 years ago on the Bank of Japan are somehow inconsistent with our current policies. That is absolutely incorrect. My views and our policies today are completely consistent with the views that I held at that time,” said Bernanke.

Krugman responded in a blog, writing “I see it, in effect he (Bernanke) declared that he has been assimilated by the Fed Borg” and called Bernanke’s response “disappointing.”

Copyright 2012 ABC News Radio


Rick Perry Hits Bernanke and Fed; Talks Immigration, Border Security

Justin Sullivan/Getty Images(WASHINGTON) -- Rick Perry touched on many of his trouble issues in an interview with CNBC Thursday morning, as he attempted to fine-tune his message on immigration and border security, clarify his stance on Social Security, and explain his views on the Federal Reserve and Ben Bernanke, who he openly criticized in the first days of his campaign.

In the wide ranging interview, Perry said he would not reappoint Chairman Ben Bernanke, and sent a message to the Fed to stop conducting bad policy. “I think the statements towards Chairman Bernanke need to be very clear to him that making monetary policy to cover up bad fiscal policy is bad public policy, and that’s what we’re seeing a Fed that is getting involved in things that frankly it does not need to be involved with so printing more money doesn’t do anything at this particular juncture but to make the dollars in our pocket worth less money,” Perry said in an interview on Squawk Box.  

In August, Perry exposed his distaste for Bernanke and the Fed’s monetary policy, suggesting that printing more money would be "almost treasonous."

“If this guy prints more money between now and the election,” Perry said at a house party in Cedar Rapids, Iowa in August, “I don’t know what y’all would do to him in Iowa, but we -- we would treat him pretty ugly down in Texas.  Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous in my opinion.”

The Texas governor offered a tip to the federal government on how to better help governors do their jobs -- strengthen border security.

“One of the things I wish the federal government would do, that a lot of problems that we have to deal with as governors would go away if they would secure the border of this country with Mexico.  We’re having to deal with the results of a federal government that has failed in their duty.”

Perry suggested the federal government is to blame for creating new issues for states to deal with, such as determining whether states should offer in-state tuition rates for illegal immigrants, due to poor border security.

“In Texas, and it’s a sovereign state issue, we decided it was better because the federal government forcing us to take care of these individuals and the federal government is who allowed them to come in with their lack of security," he said.  "We have to make decisions on how to deal with that in Texas.  We thought in 2001 it was the best interest of our state to have those young people educated rather than kicking them to the curb and not allowing them to be educated and then having to pay for them in some other form with government programs or what have you.  But how to cure that is for the federal government to secure that border.”

On Social Security, the Texas Governor repeated his assurances that the entitlement program will exist for those nearing retirement age but needs reform for younger generations.  But the Texas governor also went as far as suggesting the current system goes beyond the intent of the Founding Fathers.

“What we talked about in the book [Fed Up!] was that this was one of many places where the bureaucrats in Washington, D.C. or Congress or President of the United States went well outside our Founding Fathers,” Perry said.  “But look, Social Security is in place, that program is going to be there, it’s just got to be transformed, and that’s what we’re talking about doing.”

Copyright 2011 ABC News Radio


White House to Rick Perry: 'Threatening' Bernanke 'Not a Good Idea'

Chip Somodevilla/Getty Images(WASHINGTON) -- White House press secretary Jay Carney was asked Tuesday about comments made by Republican presidential candidate Gov. Rick Perry of Texas.

Perry on Monday at a local Republican Party event said of Federal Reserve Chairman Ben Bernanke, “If this guy prints more money between now and the election, I don’t know what y’all would do to him in Iowa, but we -- we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous in my opinion.”

The White House spokesman said, "When you're president or you're running for president you have to think about what you're saying because your words have greater impact. President Obama and we take the independence of the Federal Reserve very seriously and certainly think threatening the Fed chairman is probably not a good idea."

A Perry campaign spokesman, Ray Sullivan, responded Tuesday morning to the Texas governor’s comments the previous night that if Bernanke were to print more money between now and the election it would be “almost treasonous” and that things could get “ugly” for him.

“The governor is passionate about reducing federal spending and moving towards a balanced budget as quickly as possible. He does not believe that printing more money is the answer to our economic problems,” Sullivan told a gaggle of reporters at Perry’s first campaign stop of the day.

He repeated, “The governor was passionate and energized by a full day of the Iowa State Fair, public events and interacting with the people of Iowa. And it was a way for him to talk about his concerns about the federal budget and his strong belief that printing more money is not the solution.”

A reporter pressed Sullivan on whether Perry’s words were perhaps too harsh.

“I think you’ll just have to listen to what the governor says every day,” Sullivan said. “The message is certainly going to evolve and be responsive to the news of the day. Just keep watching.”

Copyright 2011 ABC News Radio


More Harm than Good: Republican Leaders Voice Fears Over Fed Plan

Photo Courtesy - Getty Images(WASHINGTON) -- Republican leaders in the House and Senate Wednesday voiced concerns about the Federal Reserve’s new $600-billion monetary stimulus plan, known as “QE2”, short for “quantitative easing.”

In a letter to Fed chairman Ben Bernanke, top Senate Republicans Mitch McConnell and Jon Kyl and top House Republicans John Boehner and Eric Cantor said the plan creates “significant uncertainty” about the strength of the dollar, “impairs U.S. trade relations,” and “erodes confidence in the economic outlook.”

“While intended to improve the short-term growth of the U.S. economy and help maintain a stable price level, such a measure introduces significant uncertainty regarding the future strength of the dollar and could result both in hard-to-control, long-term inflation and potentially generate artificial asset bubbles that could cause further economic disruptions,” the GOP lawmakers wrote to Bernanke.

Noting that the plan has already “generated increased criticism and action from other central banks and governments,” the lawmakers warned, “any action taken by our nation or foreign nations that impairs U.S. trade relations at a time when we should be fighting global trade protection measures will only further harm the global economy and could delay recovery in the United States.”

The GOP lawmakers are only the latest in a growing chorus of criticism against the central bank’s program. Countries such as China and Russia initially voiced concerns about the plan, followed swiftly by a wide range of Republicans.

Bernanke recently made the case for the program in an opinion piece published in the Washington Post, explaining that the new money -- injected into the economy through a program which will buy up Treasury bonds during the next eight months -- can reduce borrowing costs for American consumers and businesses, while also lowering interest payments for people and businesses with lots of money in savings. The Fed boss deflected fears that the plan would result in higher inflation as “overstated.”

Copyright 2010 ABC News Radio

ABC News Radio