Government Policy Caused the Drought of Unemployment
by ilene - September 3rd, 2010 4:41 pm
Government Policy Caused America’s Unemployment Crisis
Courtesy of Washington’s Blog
Indeed, even after the government plays with the numbers to make them look better (using inaccurate birth-death models and other tricks-of-the-trade), this is how the current jobs downturn compares with other post-WWII recessions:
The Government Has Encouraged the Offshoring of American Jobs for More Than 50 Years
President Eisenhower re-wrote the tax laws so that they would favor investment abroad. President Kennedy railed against tax provisions that "consistently favor United States private investment abroad compared with investment in our own economy", but nothing changed.
For the last 50-plus years, the tax benefits to American companies making things abroad has encouraged jobs to move out of the U.S.
The Government Has Encouraged Mergers
The government has actively encouraged mergers, which destroy jobs.
For example, the Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry.
This is nothing new.
Citigroup’s former chief executive says that when Citigroup was formed in 1998 out of the merger of banking and insurance giants, Alan Greenspan told him, “I have nothing against size. It doesn’t bother me at all”.
And the government has actively encouraged the big banks to grow into mega-banks.
The Government Has Let Unemployment Rise in an Attempt to Fight Inflation
As I noted last year:
The Federal Reserve is mandated by law to maximize employment. The relevant statute states:
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
***
The Fed could
The Fed’s Lacker: More Threats
by ilene - January 17th, 2010 2:23 pm
The Fed’s Lacker: More Threats
Courtesy of Karl Denninger at The Market Ticker
If you’ve done nothing wrong, why are you threatening people Mr. Lacker?
Lacker criticized legislation before Congress that would rescind an exemption on government audits of monetary policy and give politicians a greater say over the appointment of Fed bank directors and presidents.
“Such moves would present very serious risks to the effectiveness of monetary policy and ultimately to economic growth and stability,” Lacker said in a speech today to the Risk Management Association in Richmond, Virginia.
In a word: Why?
If The Fed has made "policy mistakes", which Lacker acknowledges, why doesn’t he want exposed to public view why those mistakes were made, who wanted them to be made and what happened as a consequence?
While the Fed has made “policy mistakes” leading up to the financial crisis, its structure has “given us a good record over the better part of three decades.”
I challenge Mr. Lacker to prove that.
To expose the entire structure of monetary policy decisions.
To "bare all."
See, I think he’s lying.
I believe that an honest examination of The Fed’s monetary policy will show that The Fed has willfully and intentionally blown asset bubbles for the last 30 years. That it has willfully and intentionally ignored risks to the economy posed by those bubbles. That despite more than 30 years of knowledge of the below graphs and facts (all drawn from The Fed’s own data!) the institution has chosen a path of knowing monetary ruin, and wishes to conceal not only the "who" but also the "why."
It is my believe that the displayed willful and intentional ignorance of the above chart, along with an intentionally-blind eye toward the reality of compound growth in credit beyond that of GDP, will, if examined and audited, prove that The Fed has intentionally and willfully violated its lawful mandate:
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively