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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Nov. 30, 2009 / 13 Kislev 5770

Bipartisan threats against the institution that saved America from depression

By Robert J. Samuelson




http://www.JewishWorldReview.com | Ever since its creation in 1913, the Federal Reserve has grappled with a daunting political contradiction. The Fed is charged with preventing the collapse of the banking and financial system, whose health is essential for the "real economy" of production and jobs. But financial bailouts usually occur when mistakes or misdeeds by bankers and investment professionals make them public pariahs. To do its job, then, the Fed protects — or seems to protect — an unpopular, disgraced and undeserving group. We are now witnessing this contradiction in full bloom.


The Fed has become a congressional scapegoat for assorted economic frustrations: 10.2 percent unemployment; expensive rescues of fragile financial institutions (AIG, Bear Stearns, Citigroup); outsize Wall Street bonuses; and the crisis itself. The denunciations transcend rhetorical outbursts. The House Financial Services Committee recently voted to require the Government Accountability Office (GAO) to "audit" the Fed's monetary policy — its efforts to influence interest rates and credit conditions. In the Senate, Christopher Dodd, chairman of the Banking Committee, has proposed stripping the Fed of all powers to regulate financial institutions — its actions to police lending and management practices. These powers would go to a new agency.


The Fed backlash is bipartisan. Rep. Ron Paul, a Republican and libertarian, proposed the GAO audit, which he sees as a first step toward abolishing the Fed ("End the Fed" is his latest book). Paul favors resurrecting the gold standard and combining it with private money; Wal-Mart could issue currency. His views are long-standing, principled — and wholly impractical. Dodd, of course, is a Democrat. Much Fed-bashing simply indulges Congress's impulse to blame someone else for anything unpleasant.


Lost in this politically charged climate is the reality that the Fed, more than any other government agency, arguably stopped last fall's financial panic from becoming a global depression. The Fed pumped out more than $1 trillion in new credit, created special lending programs to support faltering segments of the credit markets (commercial paper, money market funds) and rescued financial institutions, notably AIG, whose bankruptcy might have triggered a chain reaction of failures. These were seat-of-the-pants responses, taken in the midst of crisis and pervasive uncertainty. We will never know what might have happened without them. The second-guessing is occurring now when there's less fear and more information.


What's also overlooked is that the Fed isn't the super-secretive, unaccountable agency of political stereotype. In 2009, Fed officials from Chairman Ben Bernanke on down have testified 32 times before congressional committees. The Fed makes detailed disclosures about its policies. After every meeting, the Federal Open Market Committee (FOMC), the key decision-making body on monetary policy, issues a statement explaining why it has — or hasn't — changed its interest-rate target. Until 1994, there were no announcements after FOMC meetings. Economists and investors had to guess.


Contrary to conventional wisdom, the Fed's activities are already widely audited. Deloitte & Touche examines the Fed's financial statements, which are published. The GAO can audit many Fed activities, including its banking regulation and supervision of the payments system. What it's barred from auditing is the conduct of monetary policy, including relations with foreign central banks such as the European Central Bank.


Congress has so far sensibly put this off limits. "Audit" has a different meaning in the context of the GAO than in everyday usage. It means examine, investigate, evaluate and, often, criticize. It's not just crunching numbers. The GAO usually undertakes studies at the request of someone in Congress. This suggests that the GAO could be used to influence or intimidate the Fed through selective investigations, which would involve access to internal Fed documents and interviews with policymakers. The Fed might be pressured to finance government deficits or to adopt an "undue focus on the short term," Vice Chairman Donald Kohn testified before Congress on July 9. Historically, similar pressures have caused other central banks to unleash inflationary torrents of money, Kohn said.


This is not inevitable, but even the impression that the Fed's "independence" is compromised could perversely undermine confidence in the dollar, leading to higher market interest rates or a rapid fall in the dollar's foreign exchange value. Massive projected government budget deficits compound the psychological damage. Similar objections apply to Dodd's proposal to end the Fed's power to examine and regulate financial institutions. If this crisis teaches anything, it is that the Fed needs to know more — not less — about large financial institutions.


The Fed isn't infallible. Its mistakes contributed to the crisis. Its present low-interest-rate policy poses dangers of fostering inflation or new "asset bubbles." But the congressional Fed-bashing poses greater dangers. Ironically, the destructive remedies being peddled are part of "financial reform" legislation. If this is "reform," we're better off without it.

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09/14/09: Give It to Us Straight
09/07/09: Bad Future for Jobs?
08/24/09: A Rail Boondoggle, Moving at High
08/10/09: Championing the Status Quo
08/03/09: We'll remain in denial, prisoners of wishful thinking, until the fateful reckoning arrives in the unimagined future
07/27/09: Obama's misleading medicine
07/13/09: Americans' self-indulgence hurts us
07/06/09: Economists out to lunch
06/29/09: Panics ‘R’ Us!
06/08/09: Flirting with deflation or inflation? Now the economy might be at risk of both
05/25/09: A ‘crisis’ America needs
05/18/09: Will somebody finally say that Obama is irresponsibly mortgaging our future?
05/04/09: The Bias Against Oil And Gas
04/27/09: Environmentalists maximize the dangers of global warming while pretending we can conquer it at virtually no cost
04/20/09: Our Depression Obsession
03/23/09: Geithner treads a line between financial paralysis and populist resentment
03/23/09: American Capitalism Besieged
01/06/09: The limits of pump priming
12/29/08: Humbled By Our Ignorance
07/31/08: The homeownership obsession
07/24/08: A Depression? Hardly
07/17/08: Why isn't globalization making the interconnected world more stable?



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