PBS Drops a Bombshell on the Federal Reserve’s 100th Birthday Party

[JohnyCanuck]

PBS promised a “debate” this past Friday night on the “benefits and dangers” of the Federal Reserve as the Fed marks its 100 years of existence tomorrow. Instead of a debate, two famous stock market historians made the same stunning announcement – that the Fed has decided its job is to push up the stock market.

Consuela Mack’s Wealthtrack program on PBS had invited James Grant, Editor and Founder of Grant’s Interest Rate Observer, and Richard Sylla, the Henry Kaufman Professor of the History of Financial Institutions and Markets at NYU’s Stern School of Business. The opening scene for the program shows Sylla in a party hat lighting the candles on the Fed’s birthday cake while Grant snuffs them out – suggesting that Sylla would be making pro-Fed statements while Grant would take the opposing view.

What happened during the program, however, was that both men made the candid and bold accusation that the Federal Reserve, for the first time in its history, has assigned itself the job of propping up the stock market.

snip

Professor Sylla adds more fuel to the fire, stating: “The Fed seems to have, I think almost deliberately, is trying to push the stock market up. I’ve watched this stuff for 40, 50 years now and this is the first time in my memory when it seemed to be official U.S. government policy that the stock market goes up. And the Fed likes this because it thinks that when the stock market goes up, people who own stocks feel richer, they’ll go out and spend more money, and the unemployment rate will come down.” You can watch the full program here.

http://wallstreetonparade.com/2013/12/pbs-drops-a-bombshell-on-the-federal-reserve%E2%80%99s-100th-birthday-party/

[cantbeserious]

1. Should Anyone Be Surprised - Actions Speak Louder Than Words - The 1% Prosper At Our Expense

eom

[Wounded Bear]

2. And, IIRC, part of their charter...

is to fight unemployment. I'd give them a big fat fail on that one.

[Ace Acme]

13. Well we have to fatten up the stock market to aid employment.

I'm betting that hiring in the swimming pool construction industry and the tennis-court industry will turn up in the spring.

Also, the outlook for peacock groomers is very good. There's a severe shortage of peacock groomers. People just need to get entrepreneurial about reinventing themselves to fit this new economy.

[Lucky Luciano]

17. It is true that unemployment is a key part of their mandate.

However, congress needs to also implement sound fiscal policy as well that would support growth. Bernanke has scolded the Republicans for impairing the recovery with bad fiscal policy.

[MannyGoldstein]

3. I'll watch this, thanks! nt

[Squinch]

4. Kick and thank you!

[progressoid]

5. I'm shocked. Shocked, I tells ya.

[loudsue]

6. That will be the end of PBS getting any funding...no longer will it be "public", unless

there is a rightwinger 1% person at its head. That's how the 1% deal with the truth: the appoint one of their own to control what "truth" the public is allowed to hear.

[2banon]

8. PBS is already owned by the 1% and I'd say the Neo Conservatives Finally own it lock stock & barrel

They'll toss up the occasional bone to maintain the charade of "liberal bias", but nothing could be farther from the truth. Koch Brothers owns Nova... Big Oil owns PBS News Hour, board of directors at PBS and CPB is appointed and owned by the 1%. etc, etc.

For those who will make a point of viewing this particular "bombshell", I would be very interested in reading your critical analysis - sans spin, other than as a point of reference in your critique.

Presumably, the nefarious background on the birth of the federal reserve will likely be glossed over at best, but I'd be pleased to be proven wrong. I haven't read who will be facilitating the "debate" or interviews, now wondering who that will be. going to check that now..

[NealK]

7. K&R n/t

[2banon]

9. My local PBS doesn't carry Consuela Mack’s Wealthtrack...

I don't know anything about her or this program. Anyone else familiar?

[Corruption Inc]

10. The "markets" are completely rigged/propped up

Not many people believe it but it's true. The FED works in concert with about 6 big banks, they control the pricing of everything they touch. They use high frequency trading, black pools, derivatives and blatant insider trading to control whatever they want to. The FED enables them by feeding them 80 billion dollars a month, a figure the FED just said they were going to cut to 70 billions dollars a month.

They only way any "investor" can trade anything is to try to find stocks that aren't manipulated by our criminal banks, which is very difficult. Otherwise, all any "investor" can do is try to guess how far up or down the corrupt banks will drive the price of something.

It's pure corruption and we're all told to just "look forward".

[Spitfire of ATJ]

11. Give the already wealthy more money and they just put it on top of the pile.

[HoneychildMooseMoss]

12. Yup

[Nevernose]

18. Don't bring Uncle Scrooge into this.

It's not fair: Scrooge McDuck worked his cloaca off to be the richest duck in Duckberg, unlike the entitled losers who work in "finance" or inherited their money.

[HoneychildMooseMoss]

19. Yeah, he "worked" for his money, all right,

by destroying an African village and using an army of "cutthroats" to steal the tribespeople's lands in order to establish a rubber plantation.

[Nevernose]

25. I was specifically referring to his Yukon mining days

In which he made his first gajillion dollars singlehandedly as a miner. There is, of course, the time seduced the widow and stole her money, but that was work, too.

You act like finding the lost city of Shangra-La, stealing their mineral resources, and destroying their natural ecosystem isn't hard work, I swear.

[Ace Acme]

15. Normally they use it to buy bonds, but the Fed's interference in that market

makes that market a poor investment, so the would-be bond buyers are forced into stocks. The rich can't possibly spend all the money they've got. How many cars can you own?

<<Robert Reich's film>> "Inequality's" key point starts from the frequently heard contention from wealthy folks that they are "job creators." Not so, Reich insists. Consumer spending is 70% of the U.S. economy, and the real job creators are the middle-class buyers.

Helping make this point is Seattle-based venture capitalist Nick Hanauer, one of several people the film interviews, whose initial family business was pillow manufacturing. Hanauer's annual income is between $10 million and $30 million, but, he points out, "a person like me doesn't buy 1,000 pillows. Even the richest person sleeps with only one or two. The most pro-business thing you can do is to help middle-class people thrive."

Since the mid-1970s, when wages flattened, the middle class has done everything but thrive. Reich reports three strategies, now maxed out, that families used to cope with that situation: Women entered the work force, people worked longer hours and took second and third jobs, and homeowners used their houses as piggy banks.

[Ace Acme]

14. It's hardly a bombshell to those who have been watching the business press.

Every Fed meeting the analysis has reported on the market reaction to fear or confidence that the Fed purchases are going to continue or are going to be scaled back.

[mitty14u2]

16. Why austerity kills the poor

Why Austerity Kills the Poor

In a fascinating new book – The Body Economic: Why Austerity Kills – David Stuckler and Sanjay Basu argue that government cuts have resulted in 10,000 suicides in Europe and America since the economic crisis began. They say that not only is austerity bad for the economy, it is bad for people’s health. The authors explain why some debt-ridden nations have prevented a rise in suicides in stark contrast to others such as Greece, where economic-related deaths have jumped by 60 per cent. (2160 Words) - By Amy Mackinnon

"The comparison is perhaps the clearest between Iceland and Greece, which are at the two extremes', explains Stuckler. "Iceland also suffered a major banking crisis, all of its biggest banks failed, the stock market crashed 90%, and total debt jumped to more than 800% of its GDP - a figure larger than any European or North American country today. Yet its president took a radical step and called for a public vote on how to respond… 93% of Icelanders voted against financing bank bailouts with deep cuts to its health and social protection system. Thanks to the support to its national healthcare system, no-one lost access to healthcare in Iceland, even as the prices of imported medicine rose, we found no rise in suicides and depression."

Protection of social welfare also did little to harm Iceland's economic recovery, once one of the most precarious in Europe but now comparatively healthy, with unemployment levels below 5% and a GDP growth rate of 4%.

http://www.streetnewsservice.org/news/2013/june/feed-380/why-austerity-kills-the-poor.aspx

The new millennium seems to have awoke some evil that is winning and winning is all that matters, austerity and killing the poor is expectable for doing business.

[dawg]

20. Let's not buy in to a right wing meme.

The Fed has tried to keep interest rates low in an attempt to stimulate employment. Right wingers hate this. They want interest rates to go higher in order to fight inflation and to provide them with higher risk free returns.

They accuse the Fed of blowing a stock market bubble in order to hide their real reason for criticism. They want higher interest rates - unemployment be damned.

[solarhydrocan]

23. It's not a right wing/left wing thing

Unless you consider Kucinich and Sanders right wing

why is it that private central banks issue the public currency as a loan at interest when the Constitution allows the Government to do the same thing?

The public currency must return to being a public utility, as it was when this nation was founded.

[dawg]

24. It's a right wing meme that many on the left fall for.

The goal of this meme is to handicap the Fed and prevent it from doing anything to help stimulate employment. Rick Perry actually threatened Bernanke, if he should ever come to Texas.

Some good people fall for this anti-Fed woo because of their natural distrust of anything related to the banking system. But such attacks on an activist Fed are harmful to working people and many on the left need to realize that.

Leftists like Paul Krugman, who understand and support the Fed's dual mandate, try to dispel this sort of disinformation.

The right wing wants to weaken the Fed. They want to reduce it to a single mandate - control inflation only. All the rest they consider to be government interference in their precious free market.

Let's not enable them. And that goes double now that we're getting Janet Yellen as Fed chair.

[bvar22]

30. Paul Krugman.... a "Leftist"??!!!!

Well, I guess that tells us all we need to know about where YOU are on the Political Spectrum.

[dawg]

31. Is Dr. Krugman not considered part of the left anymore?

I must have missed a memo.

[Warren DeMontague]

21. Will Rand Paul's toupee be making an appearance?

jes' curious

[Wilms]

22. ^

[KoKo]

26. And Punishing Savers and the Elderly with 0 interest rate policy

hoping to drive them into the Stock Market or other risky investments ...only to crash them down once again at some point in the future.

Thanks for the Heads Up on the PBS Show!

[rickford66]

27. That was the justification for 401k's

Everyone is invested in the market. It's similar to the classic Ponzi Scheme. Get in early and then get out before it crashes. The insiders always come out ahead. The rest of us are patsies. Back in the 80's, when the 401k was introduced where I worked, I asked a banker/broker/conservative family friend what the justification was. He said that the government (Reagan et al) wanted us to be well taken care of. Better to manage your own finances etc. I could see where the average person would have no idea how to invest "wisely" so originally I tended to go with the "guaranteed interest" options offered. Investing in "stock prices" instead of "sound corporations" is insane. The casino always come out ahead.

[lonestarnot]

28. They surely did.

[JohnyCanuck]

29. Amend the Fed: We Need a Central Bank that Serves Main Street

By Ellen Brown

The Federal Reserve is the only central bank with a dual mandate. It is charged not only with maintaining low, stable inflation but with promoting maximum sustainable employment. Yet unemployment remains stubbornly high, despite four years of radical tinkering with interest rates and quantitative easing (creating money on the Fed’s books). After pushing interest rates as low as they can go, the Fed has admitted that it has run out of tools.

At an IMF conference on November 8, 2013, former Treasury Secretary Larry Summers suggested that since near-zero interest rates were not adequately promoting people to borrow and spend, it might now be necessary to set interest at below zero. This idea was lauded and expanded upon by other ivory-tower inside-the-box thinkers, including Paul Krugman.

Negative interest would mean that banks would charge the depositor for holding his deposits rather than paying interest on them. Runs on the banks would no doubt follow, but the pundits have a solution for that: move to a cashless society, in which all money would be electronic. “This would make it impossible to hoard cash outside the bank,” wrote Danny Vinik in Business Insider, “allowing the Fed to cut interest rates to below zero, spurring people to spend more.” He concluded:

. . . Summers’ speech is a reminder to all liberals that he is a brilliant economist who grasps the long-term issues of monetary policy and would likely have made an exemplary Fed chair.

Maybe; but to ordinary mortals living in the less rarefied atmosphere of the real world, the proposal to impose negative interest rates looks either inane or like the next giant step toward the totalitarian New World Order. Business Week quotes Douglas Holtz-Eakin, a former director of the Congressional Budget Office: “We’ve had four years of extraordinarily loose monetary policy without satisfactory results, and the only thing they come up with is we need more?”

http://ellenbrown.com/2013/12/07/amend-the-fed-we-need-a-central-bank-that-serves-main-street/