Every once in a while, there is a way to resolve a host of problems that is so obvious it gets overlooked.
With that in mind, and in light of yesterday’s Federal Open Market Committee meeting and the reaction that followed, let’s have a look at four big problems: crumbling U.S. infrastructure; federal budget deficits; normalizing U.S. monetary policy; and the shortage of investment-grade debt.
There is a single solution to all of them: Issue more long bonds, preferably 30- or 50- year securities.
Earlier this week, I discussed “The Worldwide Deficit of High-Quality Debt,” so let’s focus on the other three.
Best way to get this done is for Obama to say he hates it. The GOP will drive it home, then screech and scream like Keystone and when it hits the President’s desk, signs it.
It’s judo. You have an irrational hatred, like Republican’s for Obama, take advantage of them.
Agreed
The Republicans are the ultimate dog that caught the car. “This President won’t compromise! Oh wait, he will…!” A part of me hopes the USSC will rule against O Care and it goes into a death spiral (in time for the 2016 elections) and we can hold the malefactors of great wealth accountable! woohoo!
“So candidate X, you got rid of quality coverage for the American public, how will you provide for us?”
Absolutely yes! Should have been doing it for the past seven years! When the economic history of this period is written one of the greatest indictments will be against the austerity bias of governing elites in developed nations.
“All we need is for a partisan, incompetent, do-nothing Congress full of political hacks on both sides of the aisle to step up and do the right thing. How hard can that be?”
Unfortunately, history says it is a coin flip about which way they go on this. For every Civil Rights Act that gets passed, there are also the examples of governments blundering into the First and Second World Wars and the Great Depression. Many of the great leaders have emerged in crisis. During the good times, the incompetent political hacks tend to rise to the top.
“Many of the great leaders have emerged in crisis. During the good times, the incompetent political hacks tend to rise to the top.”
Surely you are not suggesting that we have a self-correcting political system — “efficient politics”?
But what you say makes a great deal of sense from a behavioral perspective, the Wallys of the world tend to disappear when the going gets tough, leaving those capable and willing to do what needs to be done left standing. What I cannot figure out is how the vast majority of those holding elected office managed to stay put during the worst recession since the Great Depression. Do things really need to get a lot worse than 2008 for real leaders to appear?
When the chickens come home to roost w.r.t. the ecological destruction (acidification of the oceans, etc), we should see some godlike political figures arise to meet the challenge. One hopes that the species is up to producing such individuals.
Actually, we have seen a fair amount of turnover. Republican president flipped to Democrat in 2008. A competent and sane Republican candidate in 2012 would have taken out Obama.
The House flipped Republican and now the Senate has.
A classic example of a real leader emerging in crisis was Ulysses S Grant in the Civil War. In peacetime an incompetent general of the army could remain in place for years until retirement. In war, Lincoln churned through generals every few months until finally Grant proved his worth in the west and was given what was once McLellan’s army in the east. Prior to that, some generals were incompetent while others (such as Meade) were competent but couldn’t get over the hump to final victory. Crisis demonstrates if somebody can actually deliver.
Bernanke did an excellent job in the crisis and then was left on his own for years while Congress fiddled. Yellen is staring at the same Congressional abyss that Bernanke stared at. Bernanke left her a slender rope bridge across the chasm. It will likely be a while before Congress builds the replacement bridge so that she can cut the ropes of the temporary one.
and now we dont have a sane or incompetent Congress? its always been highly partisan (its only when their backs to the wall, that they werent), and it probably was worse right before the civil war, but not by much.
make that competent
@rd, If Romney would have run as “Massachusetts Romney”, I think he would have won. Then again, he never would have gotten the nomination. I see the national GOP behaving as the California GOP has done many times in Senate races — sane Republicans can’t get nominated. Unfortunately, I’m starting to think the phrase “sane Republican” is an oxymoron.
Bernanke made repeated pleas to the Republican Congress for fiscal action. They did nothing. Barry is trying to be even-handed here and blame both sides, and while both sides have misbehaved, the Republicans in Congress shoulder much of the blame, as well as their enablers in right-wing media.