I also really dislike the idea of Congressional meddling in the day to day activities of the Fed (like interest rates, etc). Congress should focus on the matter of confirming good choices to the Fed board and then let them do their job.

That said, someone (and it doesn’t have to be the Fed) has to be responsible for systemic regulation. When Lehman collapsed no one (not even Lehman) could even say with any degree of certainly the extent to which Lehman was involved in the CDS space. Someone should have been aware that AIG was in essence issuing $20 million in insurance on $1 million of asset. It should not have been such a surprise that Bear Sterns was a castle built on rapidly eroding sand.

Not so fast with the trigger finger, there pal… of the top nine mortgage lenders, seven of them are run by Democrats and Democrat-leaning executives… it’d be 8:9 if Chrissy Dodd’s buddie Angelo Mozilo of CountryWide weren’t indicted for multiple felonies… by the way, why do think it was that Angelo Mozilo looked more like a slick trial lawyer than a mortgage banker? Is it because most Democrats clearly respond better to sharkskin suits, flashy ties, perpetual tans and slick talkers without an ounce of sincerity? Yeah, I think so too. It’s why Obama and John Edwards made it so far.

In the 08 election, sleazy mortgage lenders gave more money to the Democrats than to the GOP. And in the ‘10 elections, it’s the same –likely to increase the spread toward slick Democrats.

http://www.opensecrets.org/industries/indus.php?ind=F4600

In the last decade or two, Democrats have gotten a greater percentage of money from mortgage lenders than the GOP… 90 races? Dems 60-40%; 92 races about even; 94 races 64-36% Dems; and so forth.

Care to rephase your claim?

Interesting point, and you might be largely right, but why do Dems want resolution authority for large non-commercial banks while the GOP opposes it? Commercial banks are already subject to resolution authority, with the FDIC typically becoming receiver, but part of the chaos from last year was the lack of resolution authority for non-commercial banks (Bear Stearns, Lehman, AIG, etc). Note that WaMu, Wachovia, Fannie/Freddie (which became subject to resolution authority in the summer of 2008), etc, did not cause panics. It was the institutions that were subject to the normal bankruptcy code, and not government enforced resolution authority, that caused panic and collapse.

Dems, reasonably IMHO, want to have resolution authority for non-commercial banks. The GOP, irrationally IMHO, opposes it as a power grab. As I understand it, the big non-commercial banks oppose resolution authority because the lack of such authority means the government will bail these institutions out (so the normal bankruptcy regime won’t come into play even then), and that implicit government guarantee means the big non-commercial banks can get cheaper credit and subsidized financing. So it doesn’t seem that your Dem/GOP split plays out with resolution authority, and I do wonder if that’s an indication that this isn’t about special interest groups, it’s about about classic ideology (specifically, in the case of resolution authority, I think the Dems are clearly right, but the GOP simply can’t ever accept a government role in the private economy).

Of the ~85 companies on both lists (Boehner and Pelosi), 9 contributed to both of them. So not only is the $ rolling in for these 2 jokers, 10% of those contributing are giving to both!? It’s just so disheartening to know that these people are supposed to represent you and I…yet it’s obvious who the real constituents are to them (as I sit here with my 1 vote and $0 contributed to a candidate).

This is nothing new, of course, but it still sucks. What can we do? Campaign finance reform? A 3rd major political party? Those who benefit from how things are now will never let that happen.

Any other ideas?

http://www.opensecrets.org/politicians/contrib.php?cycle=2010&cid=N00007360&type=C&mem=

Here are the sponsors of Nancy Pelosi:

http://www.opensecrets.org/politicians/contrib.php?cycle=2010&cid=N00003675&type=C&mem=

And here are the sponsors of John Boehner:

http://www.opensecrets.org/politicians/contrib.php?cycle=2010&cid=N00003675&type=C&mem=

First of all, unemployment is NOT the way to fight hyperinflation. During the late 1970s, we had both high unemployment AND high inflation (stagflation).

Higher unemployment is a side effect of successful anti-inflationary policies like higher interest rates and a reduced money supply and cuts in Government spending and tax increases. And like most side effects of most medicines, it’s temporary–a few years, tops. In boom times like the 1980s and 1990s, unemployment can be quite low.

balconesfault: the Fed has not pegged their interest rate hikes to increases in the money supply … but rather, to times when the unemployment rate drops to a point where there is a fear that employers will have to significantly raise wages in order to compete for resources in a available shrinking labor pool.
There is no evidence that the Fed targeted the prevailing wage rate alone. The Producer Price Index and even the price of gold alone are much better leading indicators. Because by the time wages start being bid up, inflation is already here, in the form of higher prices for capital goods bought by business.

If you recall, the price of oil had been soaring before the summer of 2008; gasoline appeared to be heading toward $4.00 a gallon. That was starting to look a lot like inflation–until the summer of 2008 when the economy fell off a cliff, even though interest rates were still fairly low. It fell off a cliff because a giant speculative bubble in financial instruments finally burst–a bubble that been encouraged by low interest rates.

But as to your conclusion–that a strong safety net is needed to get Americans through the tough times–I would agree with you. The current economic mess would have been FAR worse for ordinary Americans, without the safety net we have in place: Unemployment insurance, COBRA, etc.

In the current economic mess, extending unemployment insurance benefits should have been part of Obama’s original stimulus package. In the short term, it would have helped ordinary working families much more than solar panels.

I’m not sure it would work. I don’t think there would be enough material to hold all the logos. They might need to add a scrolling ticker tape style display on their chests.

I can see it now. Some Senator or another blocking a nominee to the Fed because of their stance on abortion (which stance depending, of course, upon which party is in the minority).

I can’t imagine Congresscritters ever approving of hiking interest rates in a time of stagflation.

Continuing ultra-low interest rates are now viewed as a right, just like ultra-low taxes. The norm is now to run with absolutely nothing in the tank to combat a recession other than increased government spending, and even that has been rising in good times, especially under the last administration. Everything that could be used as effective short-term stimulus is now view as SOP by the supposed fiscal conservatives.