I always have liked Mr. Fisher, but I really wish he'd hit on the whole truth instead of half of it....
I’ll just say this: Our Congress—past and present—has behaved disgracefully in discharging its fiscal duty. Its members have not shown themselves to be true born leaders. We all know it is far past due for our federal politicians—Democrats who may “enjoy it more” and Republicans who are distinguished only by that single difference—to begin acting like the responsible fiduciaries of the nation’s fiscal accounts they are supposed to be, rather than as the parasitic wastrels they have unwittingly let themselves become.
Oh, and The Fed hasn't been enabling this? Of course it has.
This is very much like the crazy son or daughter who gets hung up with some rather unsavory folks and starts using drugs. Drugs, of course, are both dangerous and expensive. Said person has no money, and soon begins to steal anything that's not nailed down.
The DVD player disappears, the golf clubs in the garage, sometimes even a car. All wind up at "Joe Pawn" (or are simply turned over to the dealer who then fences them!)
The family, when it discovers this, has two options:
Those are the options folks. You either put a cork in that crap immediately or you become a means of allowing it to continue.
The Fed has done the second consecutively for the last four years, and in fact has done so for the last decade, covering up this:
By enabling the continued behavior it has become ingrained -- an addiction.
Now Fisher wants to scold.
Well Dick, before you scold cut off the damned sauce!
In his terrific new book, Ike’s Bluff, Evan Thomas writes that in President Eisenhower’s farewell address from the White House, he warned, “We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come.”
The jig is up. Our fiscal authorities have mortgaged the material assets of our grandchildren to the nth degree. We are at risk of losing our political heritage of reaching across the aisle to work for the common good. In the minds of many, our government’s fiscal misfeasance threatens the world’s respect for America as the beacon of democracy.
Oh really? You just figured that out now after more than a decade of letting the politicians get away with it and enabling their behavior with rate manipulation and now Quantitative Easing, despite hard, factual proof that it doesn't work?
Buzz Lightyear Monetary Policy Is Not the Answer
Only the Congress of the United States can now save us from fiscal perdition. The Federal Reserve cannot. The Federal Reserve has been carrying the ball for the fiscal authorities by holding down interest rates in an attempt to stoke the recovery while the fiscal authorities wrestle themselves off the mat.
Oh, you admit you're an enabler. Poof! There goes your ability to claim ignorance.
But there are limits to what a monetary authority can do. For the central bank also plays a fiduciary role for the American people and, given our franchise as the globe’s premier reserve currency, the world. We dare not become the central bank counterpart to Congress by adopting a Buzz Lightyear approach of “To infinity and beyond!” by endlessly purchasing U.S. Treasuries and agency debt so as to encumber future generations of central bankers with Hobson’s choices when it comes to undoing what seems contemporarily appropriate.
So my only comment today regarding the recent federal elections is this: Pray that the president and the Congress will at last tackle the fiscal imbroglio they and their predecessors created and only they can undo. And if our nation’s authorities need to draft George Shultz back into service to get the job done, I am all for sending the young man back to Washington.
Cut off the damned sauce Mr. Fisher, or shut the hell up about a problem you are enabling.
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