You’ve likely heard by now that the FOMC decided that now is not the time to taper QE3, citing its goals for improvement on the employment front and inflation, neither of which are close to being achieved. There were some interesting nuggets in the statement released this afternoon. Scott Sumner pointed out as least one in a post today. But I’m not going to go over what was said because I rather enjoy speculating about what wasn’t said.
It’s rather interesting that Bernanke sounded more like the Bernanke from February than the Bernanke in May and June, leading me to a very strong suspicion that he never thought tapering was a good idea, and that perhaps there is far less to central bank independence than meets the eye, at least as far as the Fed is concerned.
Speaking of which, after the two posts I did over the weekend (here and here) regarding the Senate Banking Committee and its chairman Senator Tim Johnson of South Dakota, I did some digging into Mr. Johnson’s background and discovered that perhaps he is not the best qualified to chair that particular committee. Like most Federal politicians, he’s a lawyer, and a small town lawyer at that, with no economics background to speak of. I wasn’t able to find a listing of those on his economics staff, economists whose names deserve extra special mention. They make such strange bedfellows with the ultraconservative tyrants at BIS who lie by omission in order to convince our legislators that the rule of law matters not when there is an as of yet untapped reservoir of political power created by tight money.
I don’t oft agree with socialists, but the Larry Summers/Janet Yellen fight appears to have been a far more consequential and positive political win than most can imagine, hence getting the old Bernanke back – the Bernanke I actually like. And I don’t expect Mr. Johnson to have much longevity on the Banking Committee as he has likely been close to the center of the Larry Summers liquidity trap mentality among Democrats on the Hill that has perpetuated our monetary problems and inflicted incalculable economic damage to this country in the process. Mr. Johnson needs to go, indeed.
It is very interesting that the name of the Committee is Banking, Housing and Urban Affairs… And at least two out of the three major spheres of influence experienced big problems over the last five years. In addition to the obvious problem of having a lawyer chairing that committee during the thick of the crisis, one would think it would point out a major problem in the governance structure that needs to be solved. But I guess power is nearly always more important to politicians than results, thus the plainly obvious need for a reorganization goes unrecognized to the peril of us all.
In the next issue I’ll be starting a series that takes a look at the history of that committee and calling out some names that seem important in one way or another.