Alan Grayson, the Democratic Congressman from Florida who's rapidly making a name for himself as the sort of liberal analogue to Michelle Bachman, is in some more hot water for calling Linda Robertson, an adviser to Fed Chairman Ben Bernanke, a “K Street whore.” Anthony Weiner probably had the best line among the various Congressional Democrats rushing to distance themselves from Grayson: “Is this news to you that this guy’s one fry short of a Happy Meal?" But I think what may be more troubling than Grayson's "K Street whore" comment is the venue in which he made it: Alex Jones's radio show.
Of all the exhibits at the Congressional Black Caucus’s annual conference, which started Wednesday and will run into the weekend, the one I least expected was tucked in the back corner, behind rows of booths hawking Coca Cola and wood carvings, silk suits and ornate hats, and a cornucopia of Obama kitsch. The booth promoted the Federal Reserve. When I first saw it, I thought it might be a part of Ben Bernanke’s recent charm offensive, an effort to demystify the central bank and ease fears about its reach into the financial markets over the past year.
The congressman is nearly in tears--his face crumpled and voice cracking. This was hardly the response that I anticipated when I asked freshman Democrat Alan Grayson a banal question about adjusting to life in his new job. "Personally, it's extremely difficult for me to be away from my family," he started. That's when he started to swell. As he came unglued, I cast a nervous glance at his aide. The least she could do was hustle him from this awkwardness.
Yes! Steve Weisman over at The Peterson Institute posted a nice riff yesterday about James Stewart's recent New Yorker piece reconstructing the week Lehman collapsed. His (and Stewart's) conclusion? Hank Paulson screwed up massively: My takeaway is that while Lehman executives were oblivious to the warning signs over the imminent failure of their storied investment firm, Treasury Secretary Henry Paulson may have increased the odds of a Lehman collapse by taking a hard line opposing a government role in its rescue.
Ben Bernanke has a great opportunity to lead the reform of our financial system. His standing in Washington and on Wall Street is at an all-time high, as a result of his bailout/rescue efforts. He is about to be reappointed with acclaim for a second term as chairman of the Federal Reserve’s Board of Governors. And he has a lot to answer for. Look, for example, at his speech of May 17, 2007, which discusses some of the problems in the subprime market and contains the memorable line: “Importantly, we see no serious broader spillover to banks or thift institutions from problems in the subprime ma
Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. But which Bernanke are we getting? There are at least three. The Bernanke who led the charge to rescue the US (and world’s) financial system after the Lehman-AIG collapse. If you accept that the choice from late September was “Collapse or Rescue,” this Bernanke did a great job. The Bernanke who argued for keeping interest rates low as the housing bubble developed. This Bernanke was part of the Greenspan Illusion--the Fed should ignore bubbles and “just clean up afterwards.” Is that still Bernanke’s view?
The big news from Martha's Vineyard is that Obama is appointing Ben Bernanke to a second term as Fed chairman. I've explained before why I think this is a good idea--Bernanke has been creative, even highly unorthodox, at precisely the moment when the economy demanded these qualities from the Fed, and when a conservative, by-the-book approach would have likely sent us into a depression.
Ben Bernanke's moves at the Fed have rightly attracted much praise in the last month after better-than-expected GDP and unemployment reports pointed to the end of the Great Recession. The latest signs of Fed-Love come by way of John Maggs at the National Journal's econ blog, which points to a new paper arguing for a "Fed-like approach" to budget-making. Maggs asks: "Should we and could we create a Fed for the budget?" (The paper is a highly-recommended read.) Of course, Fed criticism hasn't abated that much. The latest evidence comes from this weekend's Jackson Hole macro-econ get-together.