Every year, it gives out "dividends" to commercial banks that serve no purpose.
Analysts are chalking up the recent string of subpar economic data to the weather.
What the maestro doesn't understand
Alan Greenspan went from pragmatic central banker to ideologue. In his memoir, he poses as the former but writes like the latter.
There were plenty of reasons to oppose Larry Summers’s nomination to the Fed, which had seemed inevitable for much of the past few months, before Summers abruptly withdrew from consideration on Sunday. There’s Summers’s famously polarizing intellectual style, which made him a lousy fit for the consensus-driven (and hyper-transparent) Fed.
It has become glaringly obvious over the past couple months that President Obama wants to nominate Larry Summers to become the next chair of the Federal Reserve. According to CNBC’s John Harwood, Obama feels he “owes” Summers for his willingness to serve the country during the first-term response to the Great Recession.
He's a Skilled Operator
When you read about Larry Summers in the press, a certain figure emerges. You hear him described as “controversial” and “polarizing.” The stories about him might include a detail about an un-tucked shirttail or his penchant for long argumentative meetings. These renderings of Larry—with whom I co-taught a class on globalization—lose track of his great strengths.
There are now two, parallel debates taking place outside the White House over President Obama's choice of Fed chair Ben Bernanke's replacement.
With Ben Bernanke’s term as Federal Reserve chair near expiration, virtually every economic policy pundit in good standing has thrown out their list of who should replace him. Some favor the aggressive regime shift of a Christina Romer. Others prefer the continuity of a Janet Yellen.
The Federal Reserve needs to loosen its grip
The Federal Reserve appears eager to begin “tapering,” that is, reducing the monthly bond purchases it is making to support the economic expansion. Based on FOMC projections and Chairman Ben Bernanke’s comments, the Federal Reserve expects to start tapering later this year and to end asset purchases by the middle of 2014. Though the economy is improving, this discussion is premature.
Has financialization gone too far?
As chairman of the Federal Reserve, Ben Bernanke can explain a lot about its response to the housing bubble. What he can't explain is whether much of our finance industry is more trouble than it's worth.