Tell Me What You Think?

Like any author, I'm eager to hear what people think about what I've had to say and how you think the Fed and Bernanke in particular have handled the Great Panic. Post here -- but keep them polite and keep them short, please.

Comments

[john anderson]

HISTORIC DEFICIT AND MILLIONSS OF JOBS

Today's rage is to cut programs. New Jersey is typical, By cancelling the NY tunnel and preparing to cut health care, thousands of jobs are
lost. Emulation by other states. Congress, municipalities and the private sector(Cisco 6500 recently,BankofAmerica 30,000) will generate titanic job losses.


An alternative involved the greatest deficit of all time, created by the most vital of publicly funded endeavours known to mankind. That was WWII , which essentially ended the depression of the 1930's and created millions of private sector jobs. Add the GI Bill of Rights as well as the Marshall Plan and you had a gigantic deficit, which as a % of GDP, dwarfs today's deficit. How was it paid ? The top tax rates in the 1940's , 50's and 60's (prosperous years - cars, houses etc.)were in the 80-90% range. Today it is 35% !


With today's less severe deficitt, 60-70% would likely suffice. Leaving the existing progressive rates totally unchanged, the progression could simply be extended , judiciously, to the 60-70% range . It would be ideal to have implementation in time for the Wall Street bonus period.


Today's threat to mankind is oil dependence. Oil is finite! We will run out of it! The surging economies of India and China will further accelerate the decline in supply. Will we have a replacement in sufficient abundance for the survival of your grandchildren ? Will we have the storage and distribution facilities in place to get the energy to every individual in America ? Ultimately, America might export energy or energy technology to the rest of the world! Add a crumbling infrarastructure and health care for all and you have the opportunity to create millions
of private sector jobs.

America has the ingenuity (recent MIT solar cell) and the brain power! Does it have the will power? Are we able to learn from history?

Can the wealthy and the large corporations put their country above the bottom line? The ipad is a most elegant device "Designed in Califoria. Assembled in China" with a profit of 35%. How many jobs were not created in America?

[Bud Lehman]

I read with interest your 12/7/11 piece on the Fed's Loans. I don't understand though where the capital came from to purchase securities and assets totalling nearly $2 trillion. This is the increase shown in your chart and this increase took place between 3rd quarter '08 and 2nd quarter '11. Wouldn't this increase require that the Fed create some purchasing medium (money, credit, something) out of thin air to buy these securities. Isn't this then inflationary (or perhaps dilutive is a better word) of our National net worth. I am a layman so please bear with me and my lask of understanding.

[TMS]

I rather enjoyed In Fed We Trust. Nicely done. However, I'm trying to reconcile the recent Bloomberg numbers about Fed loans to banks with what I remember from your account? Who missed what? Were there really $7.7 trillion in loans to the banks? The number itself sounds outlandish.

[Carolyn Betts]

David:

I am watching Washington Week on WCET in Cincinnati and heard your name. It's the end of the week, and I'm kind of nodding off. All of a sudden, I heard your name and perked up. I thought, "Wait. David Wessel. That name sounds familiar. Haverford, senior year. Lloyd, 52." So I did a Google search and found you on this blog. You have changed in the last 35 years or so, of course.

I'm on the alternative media side, if you will, although we frequently link to WSJ articles (see www.solari.com/blog). I left Washington in 2003, when it became clear it was no place for an earnest idealist trying to restore integrity to government (HUD, in my case). HUD made $59 billion in "unaccountable adjustments" against Treasury the fiscal year after firing us as financial advisor to FHA. Nobody ever even tried to find that money. People said "Oh, that's not real money." The Hell it isn't real money! The Inspector General just said "uh, oh, there's no audit trail."

All I can say is that when trillions of dollars are being stolen out of government coffers and we hand over trillions of dollars more to crook banksters, saying surely it will trickle down the to poor schmoes who are out of work and whose houses are in foreclosure, and instead the squid and others pay multi-million dollar bonuses to the likes of the president of your senior class , what's the point in talking about economic theory?

I look forward to reading In Fed We Trust (I don't, however. Trust the Fed, I mean). My 17-year old came home from American History at school (which he ultimately flunked, because he just couldn't see things the way the books do) and reported that his teacher said the Fed was part of the US government. When he said he didn't think so, the teacher dismissed him out of hand. This is at a public school rated something like 35th in the nation in Time Magazine a few weeks ago.

Another time, he came home and said, "Mom, they told us in American History that the banks saved us from the Great Depression. Who do they think got us into the Great Depression?" He did his paper on the years 1870 - 1917 on the creation of the Fed, using The Creature from Jekyl Island as a reference. He kept calling me, saying "Mom, you won't believe this...!" And I kept saying "Yeah, I know....."

I will be interested to see your take on the Fed. I'm in favor of getting out from under fiat currency, myself, and restoring (or instituting for the first time) financial transparency. Starting with an audit of the Fed.

Take care.

BMC '75

[flirting tips]

The Great Panic? That name isn't going to get off the ground. This is the first I've ever heard of it, and I doubt people will be likely to adopt it until this nonsense has passed, lol.

[dan]

David. I really don't want to be rude so I'm going to take a huge deep breath... I saw you're book in the store today and assumed it was a sarcastic title until I read the back of the book. Did Ben Bernanke pay you to write this? I mean seriously, everything thats ever came out of the guy's mouth has been wrong. The Fed caused this financial crash and you are somehow acting like they saved us? David, how can you be so foolish? I'm looking at some of the comments above as well and I'm shocked. Do you know nothing of business cycle theory? The causes of depressions and recessions occur during the boom period. The FED DID THIS THE FED DID THIS!!!!!!

[Daniel Horchler]

David,
Thank you very much for helping me to understand. I don't think most people know how close we came to a global financial meltdown and the role played by the Fed, Treasury and central bankers around the world. Also, I don't think the average person understands the link between Wall Street and Main Street and what effect a financial collapse would have on jobs and the economy.

[Douglas J. Howard]

Sir, I just watched a short video about why you think out cities are going out of business. I respectfully disagree.
The cause of our economic collapse, though much exacerbated by the factors you have mentioned, has mainly been due to the invasion of our Nation by Undocumented Aliens.
There are an estimated 20 million Undocumented Aliens illegally living and working inside the United States. They are effectively displacing 15 million U.S. Citizens from work.
Consider all of the cost factor associated with just those two figures, and you should be able to realize that this is the paramount cause of our situation today. It did not occur over night. It has been going on and getting worse for more than two decades and has finally reached the tipping point.
Had this problem been addresses in 1986 with the enforcement end of the bargain that went along with the amnesty, I dare say, we would have a balanced budget at about $1.8 Trillion or less and NO National Debt.
health care and other services also would not be an issue.
I am not talking about Immigrants here. Immigrants are U.S. Naturalized Citizens.
I am talking about Undocumented Aliens.
Thank You

[Air Jordan Shoes]

*Fearlessness stems from selflessness.

[Air Jordan]

No difficulty is everlasting. Storms often give option to the sun. Winter constantly thaws into springtime. Your storm will pass. Your winter will thaw. Your difficulty will likely be solved.

[jordan 12]

All sentences are about something or an individual. The something or another person that the sentence is about is named the topic from the sentence. From your blog, I see that, and analyze some thing I'd like. Thanks for sharing.

[coach outlet]

Forgive me for wanting to be with you when I grow old

[Jordan Spizikes]

To perform either comfortably, you don't need to have to possess the literary sensibility of terrific authors, but you do involve to do particular things, a few of which we will consider it inside approaching paragraphs. Usually, regardless of what I do, I all feel twice of them.

[Nike Air Max Hyperdunk 2010]

You may remenber the four proverbs:
Nothing seek, nothing find.
Not to advance is to go back.
Nothing is so necessary for travelers as languages.
Not to know what happened before one was born is always to be a child.

[Larry Maxey]

In your book I wish you had indicated what you mean by "taxpayer's money". Is it fed money they create with a click of a mouse? Is it only U.S. Treasury money? The Treasury gets a lot of money from selling bonds to the Chinese so this isn't it. Oh maybe it's the money that we send in to IRS every year. Just about all writers about the recent credit panic like to throw in "taxpayers money" every once in a while to show they are capable of moral judgement. One thing for sure the FED never uses the term.

[Philip Dowling]

Dear Mr. Wessel,
How dare you! This morning (7/29/30) the Wall Street Journal Today radio broadcast featured the following statement attributed to you: "Bush left a ticking time bomb" in reference to the tax cuts set to expire on Dec. 31, 2010. MAYBE Mr. Wessel if you looked at the FACTS (and I know that this is awfully hard for you liberals to do) you will see that Bush and the Republicans tried, more than once, to get the tax cuts made permanent (again, if you need to verify this FACT simply go and check out the Congressional Record).
Stop blaming Bush for EVERYTHING and take some responsibility - Obama and the Democrats have had ample opportunity to tackle this issue!
Philip Dowling

[larrydc]

Good catch by prior commenter on "effective" vs. "ineffective." I didn't catch it myself but now I see the commenter is correct.

One other constructive criticism I'd offer:

On page 173, you quote an unnamed New York Fed staffer offering what, to me, is the most nonsensical sports metaphor imaginable: "If you think about basketball, you can have your toes on the line and you don't commit a foul unless you go over the line."

Huh? In basketball, a toe on the line is relevant to whether you are out of bounds or in bounds, not anything regarding a foul. And regardless, if your toes touch the line, you ARE out of bounds.

[Martin Killips]

David...

I have little interest in economics, and an aversion, bordering on phobic reaction to bankers and banking. However, I heard you interviewed by Deborah Cameron this morning on ABC radio (Australia) and found your comments wonderfully intelligent, precise and seemingly, to my ignorant mind, wholely accurate. I shall buy your book - or perhaps we can swap books?! I write children's poetry and have five collections in circulation (www.TheBigBamboo.com.au).

Thank you once more for brightening up my journey this morning.

[Robert L. Levin]

Dear Mr. Wessel:

I have thoroughly enjoyed "In Fed We Trust." I very sincerely suggest that an error appears to exist on the 9th line from the bottom of page 126. The word "ineffective" I believe should be "effective."

Having retired four years ago as a community banker with an continuing interest in our economy, I found myself glued to the excitement generated by your fine work in creating "In Fed We Trust!"

Sincerely yours,

Robert L. Levin

[Martin S]

David Wessell and the WSJ are hypocrites and something idiotic comes out everytime Wessell touches his keyboard. Here's an example from "The Unemployable Male"

Wessell writes:
"One way to resist these market forces is to reduce the supply of workers who aren't in demand and increase the supply of workers who are"

Yet Wessell are the number one cheerleaders for both legal and illegal immigration, not even stopping their siren song when we have 20 million unemployed in our country at present.

[Brad]

Hi David, The artical about unemployed men is oh so true, cuz I'm one of those men. The fact the education is basicly for women cuz I tried to get back to school. talk about jumping thru hops. I'm not a racist. But for 'white' men to get any education, you have to have money back ground which I dont have. Or great scores when in school. which I didnt have. So I'm out of luck :( this process needs looked into.

[Gregory J. McKenzie]

David congratulations on your book. It takes a brave man to take a stand! Do you think that The
Federal Reserve is right in keeping interest rates so low? Good luck at the Sydney Writers's Festival.
Greg McKenzie
Sydney, Australia

[Tom]

Hello David
I very much enjoyed your book. You refer to Bernanke's Dashboard and the "Financial Stress Indicator" which is defined as the percentage point gap between the rate banks charge one another for 3 month loans and the expected Fed rate. Where can we access this so that we can monitor this for ourselves?
Cheers,
-Tom

[coach handbag]

I absolutely love this blog!!! I have recently became a twilight fan and this has helped me a lot. keep up your work, You’re awesome!

[Gilbert T. Bremicker, Jr. Cherokee, Iowa]

David -
There were two factors that contributed to the sub prime mortgage problems that I wish you had discussed in your book. The first is real estate dealers that sold clients more house than they could afford. The second is appraisers that did not do a professional job and some times asked the realitor what price they needed to make the sale. The licensing boards of realtors and appraisers in California, Arizona, Texas and Florida need to investigate and cancel some licenses.

To get a copy of your book, our City librarian dove 120 miles round trip to get a loaner edition fron from the Sioux City Library.