Today's
Stories
October 14, 2010
Mike Whitney
Bernanke Ponders the "Nuclear" Option
Jonathan Cook
The Transfer Scenario
Dean Baker
Globalizing Health Care
Marjorie Cohn
Israeli Raid on Gaza Flotilla: US Fails to Condemn, Despite UN Finding
Stewart J. Lawrence
Sex and the Orgasm Gap: Are Men Still Dominating Women in Bed?
Carl Finamore
San Francisco's Hotel Frank(enstein): a Horror Show for Employees
Dave Lindorff
9 Million Stolen Homes:
Getting Tough on Banker Crime
Raúl Zibechi
Brazil's Elections: the Continuation of Lulismo
Willie L. Pelote
Shock Therapy for California?
Website of the Day
Can Mushrooms Rescue the Gulf?
October 13, 2010
Vijay Prashad
The Waning of Obama
Uri Avnery
His Father's Son:
the Real Bibi
Dean Baker
The Counterfeit Recovery
Winslow T. Wheeler
Where is the Payoff for Huge Pentagon Budget Hikes?
Patrick Bond
"To Exist is to Resist:" From Apartheid South Africa to Palestine
Michael Winship
Cash You Can Believe In
Myles B. Hoenig
Are We Expendable? An Education Manifesto From the Trenches
Tom Turnipseed
Money Talks (and Swears)
Website of the Day
The Return of Ben Tripp, as Zombie Novelist
October 12, 2010
Ralph Nader
Tricks and Traps in the Fine Print
Franklin C. Spinney
Techno War: Money Talks, Counter-measures Walk
Mike Whitney
The Future is Ugly
Robert Alvarez
The Tritium Deficit
Deepak Tripathi
India's High Stakes Foreign Policy
Chris Genovali / Camilla Fox
Death Cults Among Us:
the War on Wolves
Harvey Wasserman
Calvert Cliffs on the Brink
Robert Jensen
Soils and Souls: the Promise of the Land
Mark Weisbrot
How to Change the IMF
Charles R. Larson
America's Religious Veneer
Website of the Day
How You Can Help Fund Radical Grassroots Green Groups (and Double Your Money)
October 11, 2010
Michael Hudson
Why the U.S. Has Launched a New Financial World World War
Bill Quigley
A Million Haitians Slowly Dying
Linn Washington
American Justice on Trial
Paul Krassner
Eat, Pray, Be Disappointed: an Open Letter to Obama
Jonathan Cook
Israel's Other "Peace" Plan
Cal Winslow
Big Money, the Big Lie and Fear
Sherry Wolf
Why are Liberals Building the Right?
Peter Stone Brown
Brother Solomon Burke
David Michael Green
How Do You Take Your Tea?
Jayne Lyn Stahl
Disclose This
Website of the Day
"Seize the Jail! Tear It Down!!"
October 8 - 10, 2010
Alexander Cockburn
The Soros Syndrome
Paul Craig Roberts
America's Third World Economy
Alain Gresh
What Does a "One State Solution" Really Mean?
Patrick Cockburn
Is Pakistan Falling Apart?
Rannie Amiri
An Evaporating Palestine
Conn Hallinan
Ecuador: Coup or Riot?
Ramzy Baroud
Dying to Win
Saul Landau
Harboring Terrorists
Sam Smith
What's Missing in the Talk About Education Reform
Yvonne Ridley
On the Road to Damascus, Thinking of Monty Python
Ellen Brown
Foreclosuregate:
a Massive Fraud
Santwana Dasgupta
A View From the Top of the World
David Macaray Labor Secretaries: Frances and Elaine
Gerald E. Scorse
Tax System Favors Wealth Over Work
Tony Newman
The Perils of Prohibition
David Ker Thomson
Soundtrack for a Beating
Christopher Brauchli
Authentic Dishonesty: Newt and Dinesh Save America!
Jon Mitchell
Oliver North, Ospreys and Agent Orange
Kevin Zeese
The Longest War
Steven Best
Rethinking Revolution
Missy Beattie
Invasion of the Blood-Sucking Bedbugs
Binoy Kampmark
England's Football Inc.
Charles R. Larson
Egypt's Camus?
Kim Nicolini
"Social Network:"
Narcissism and Claustrophobia Among the Techno-Elites
Dave Marsh
"American Idiot:" Finally, a Musical That Rocks
David Yearsley
The Dark Side of Musical Enlightenment
Poets' Basement
Three by Peter Branson
Website of the Weekend
Help the Great Michael Fracasso Revolutionize the Music Industry
October 7, 2010
Franklin Lamb
Bracing for Israel's Next Attack on Lebanon
Dean Baker
Currency Wars and Accounting Identities
John Ross
The Torture Bandwagon
Ron Jacobs
A History of Repression
Harvey Wasserman
A Solar Victory and a Military Defeat
Stanley Heller
Timidity on the Mall
Gamal Nkrumah
The Greening of Al Qaeda?
John Blair
Big Coal's Revolving Door in Indiana
Charles R. Larson
What Do Conservatives Read? Questions for the Supreme Court
Website of the Day
The Palestine Chronicle Needs Your Help!
October 6, 2010
Bill Quigley /
Rachel Meeropol
Pennsylvania Has Been Monitoring You!
Jonathan Cook
The Dangers of Recognition
Jeffrey Sommers
Latvia's "Mandate" for Neoliberal Austerity
Jayne Lyn Stahl
Passing the Peace Pipe Instead
Tanya Golash-Boza
Immigration Policy Enforcement and the War on Terror
Alisa Valdes-Rodriguez
When They Call You "Illegal:" Words, Names and Meg Whitman
Guy Bouthillier
Trudeau's Darkest Hour: Forty Years After Canada's War Measures Act
Alvaro Huerta
The People Who Make Your Garden Grow
Don Monkerud
Republicans at War with America
Website of the Day
Only Lazy Ranchers Blame Wolves
October 5, 2010
Stewart J. Lawrence
Obama Reneges on Key Agreement with Immigration Advocates
Ghania Mouffok Rape City? The Women of Hassi Messaoud
Neve Gordon
Untenurable:
the Firing of Ariella Azoulay
Ralph Nader
Rowing for the Planet:
Roz Savage Goes Solo
Mark Schuller
Unstable Foundations: Human Rights and Haiti's 1.5 Million Displaced People
David Macaray
Big Leg Up for Labor in Delta Battle
Julie Hilden
The French Criminal Defamation Conviction of Google and Its CEO
Richard Anderson-Connolly
A Voter's Manifesto
Ahmad Barqawi
Confiscating Childhood in the Occupied Territories
John Halle
Heads Up for the Greens
Website of the Day
Busted for Growing Too Many Veggies!
October 4, 2010
Pam Martens
Inside the Flash Crash Report
Stephen Soldz
Guatemalan Research Horrors and US Hypocrisy
Jonathan Cook
Obama's Cave-In to Israel
Mark Weisbrot
Target: Ecuador
Conn Hallinan
Bedding Down With the Devil in Indonesia
Fred Gardner
Non-Psychoactive Pot?
Cpt. Paul Watson
Dying to Amuse Us: Where Do Captive Dolphins Go?
Sarah Knopp
The Suicide of Rigoberto Ruelas
Website of the Day
The Death of Aseel Ashleh
October 1 - 3, 2010
Alexander Cockburn
Obama's Dud Svengali
Ray McGovern
Obama's Men
George Ciccariello-Maher
Ecuador Between Three Wagers
Michael Hudson
"A Financial Coup d'Etat"
Franklin C. Spinney
The Pentagon Game
Wajahat Ali
A Foreclosure Story
Saul Landau
The Nuclear Gang Rides On
Ramzy Baroud
Farewell to Arms
Rannie Amiri
Hariri's House of Cards
Bruce McEwen
When Life Isn't a Video Game
Dave Lindorff
Now the Government is X-Raying You While You Drive
William Blum
In Struggle With the American Mind
David Swanson
The Book the Pentagon Burned
Sherry Wolf
Who Killed Tyler Clementi?
Lawrence Davidson
Overcoming AIPAC is Not Enough
Tanya Golash-Boza
Legalize Them All!
John Severino
The Struggle for Lieu Lieu
Missy Beattie
Politicians and the Prosperity Gospel
Belén Fernandez
How Israel Battles "Barbs of Criticism"
Binoy Kampmark
Miliband and Labor's Conundrum
Mohamed Abdel-Baky
The Coffee Incident: Nasser's Strange Death, 40 Years Later
Elvis Mendéz /
Jeff Napolitano
Marching Off a Cliff on October 2?
David Ker Thomson
We're in For It Now
Charles R. Larson
America's Self-Inflicted Wounds
David Yearsley
Marsalis and His Men
Poets' Basement
Crittenden, Boyce and Gaffney
Website of the Weekend
The Religious Knowledge Quiz
September 30, 2010
Franklin C. Spinney
Peace Process to Nowhere
David Macaray
Teamsters Organize Legal Marijuana Growers
Susan Galleymore
Dumping the Navy Way
Michael D. Yates
Fear and Loathing at Saint Vincent College
Russell Mokhiber
The Grunt Work of Democracy
Eric Walberg
The New Turkey / Russia Axis
Mark Weisbrot
Venezuela's Elections: Why They're Not a Game-Changer
Charles R. Larson
From Il to Un
Website of the Day
Return of the Art Student Spies?
September 29, 2010
Dean Baker
Foreclosure Funny Business
Michael Hudson
America's China Bashing
Martha Rosenberg
Frankensalmon and the FDA
Brian Ehrenpreis
Holbrooke's Hypocrisy on Drones
Michael Winship
Ireland Hits the Skids
George Lakey
"Why Did You Go to Jail?"
Patrick Bond
South Africa is Dead in the Water
Sheldon Richman
The Anti-Anti-Authoritarians
Website of the Day
Socialist Contingent on Oct. 2
September 28, 2010
Ismael Hossein-Zadeh & Karla Hansen
Why Doesn't the US Talk to Iran?
Jonathan Cook
Reasoning Against Peace
Julie Hilden
Is Powell's Bookstore a Criminal Pornographer?
Russell Mokhiber
Massey My Masta
David Macaray
HBO Limited
Stewart J. Lawrence Voice for Immigrants Wins Historic Seat
Brian McKenna
Muckrake Your Town
Laura Flanders
Is the Drug War a Class War?
Linh Dinh
Welcome to the Recovery
Bouthaina Shaaban
You Only Get the Truth From Former Officials
Website of the Day
Committee to Stop FBI Repression
September 27, 2010
Pam Martens
Scientists, Secrets and Wall Street's Lost $4 Trillion
Ron Jacobs
The FBI Raids in Context
Patrick Irelan
The Redistribution of Wealth: Steal From the Poor, Give to the Rich
Greg Moses
How ICE Illegally Deprived Saad Nabeel of His Freshman Year
Dave Lindorff
Spreading Democracy in Afghanistan: One Journalist Arrest at a Time
Jayne Lyn Stahl Ahmadinejad Steals the Show, But Citigroup is the Real Culprit
Uri Avnery
Gandhi's Wisdom: Reflections of a Professional Grumbler
George Wuerthner Wolf Restoration: a Challenge to the Old Guard
James McEnteer
Chile: Miner Problems, Major Paralysis
David Michael Green The Dismantling of Civil Society
Website of the Day
Scrambled Eggs: "Organic" Factory Farms?
September 24 - 26, 2010
Alexander Cockburn
Masturbating on the Edge of the Apocalypse
Paul Craig Roberts
The Collapse of Western Morality
Ishmael Reed
Being Black and "Difficult" in Hollywood: an Interview with Lou Gossett, Jr.
Patrick Cockburn
After the Flood:
Six Million Pakistanis Have Lost Everything
Ralph Nader
A Ten Percent Shift? Craven Republicans and Spineless Democrats
Anthony DiMaggio
Are Government Workers Overpaid?
Julien Brygo
Glasgow's Two Nations
Rune Engelbreth Larsen
The Danish Cartoon Affair: How and Why It All Began
Gary Leupp
The Handwriting is on the Wall
Norman Solomon
Higher Consciousness Won't Save Us
Shir Hever
Why Does Israel Still Occupy Palestinians?
Ramzy Baroud
Why Mitchell Said "No" to Hamas
M. Shahid Alam
Zionist Dialectics
David Rosen /
Bruce Kushnick
Cheap Date: the Comcast / NBC Merger
Rannie Amiri
A Blurred Line in Bahrain
Russell Mokhiber
True Majority and Pepsi: Dancing with the Liquid Candy Queen
David Macaray
High Noon for California Nurses
Missy Beattie
Anything Can Happen
Rich Wiles
Ramadan in Aida Camp
David Model
Pragmatic Idealism: Rationalizing Foreign Policy
Harvey Wasserman
Another Feeble-Headed Nuke Drops Dead
Jeff Deasy
The FDA and Frankenfoods
Laura Flanders
Running for the Exits
Jesse Strauss
Lessons From Arizona
Tom Stephens
The Structural Readjustment of Detroit
Binoy Kampmark Going Mad in Delhi
Stephen Martin
Money, Inc.
Charles R. Larson
Red Capitalism in Vietnam
David Yearsley
Jewels of Silent Film Music
Poets' Basement
Davies and Chaet
Website of the Weekend
How to Lose a Million Jobs
September 23, 2010
Doug Peacock
Global Warming, Killer Bears?
Dana Frank
Repression's Reward in Honduras?
Mark Weisbrot
The Rightwing Upsurge in the U.S.: Less Than Meets the Eye?
John LaForge
The End of Combat My Eye
Martha Rosenberg Animal Experimentation Funny? Yes, Says This Researcher
Jay Arena
Return to Iberville: Birthplace of Jazz, Graveyard of Public Housing?
Alvaro Huerta
The Curious Case of Latino Republicans
James Rothenberg Managed Misconceptions
Website of the Day
FBI Tailed Iowa Groups
September 22, 2010
Conn Hallinan
The Real Merchants of Death
Joanne Mariner
When Machines Kill
Jonathan Cook
Locking Up Activists
Ron Jacobs
New Orleans After the Press Went Home
Jonathan M. Feldman
Why the Swedish Left Lost
Shamus Cooke
The Bi-Partisan Attack on Public Workers
Michael Winship
Where's Ed Newman When You Need Him?
Anthony Papa
Rejecting Paris
Website of the Day
Hollywood Through Yul Brynner's Camera
September 21, 2010
John Ross
The Next Mexican Revolution
Dean Baker
The Terrible Tale of TARP
Steve Breyman
The Myth That Kills
Robert Bryce
The Real Problems With Wind Energy
Yvonne Ridley
Condemned by Their Silence
Jesse Strauss
Fallout From the Mesherle Verdict
Bouthaina Shaaban
Democracy in Arab Eyes
Binoy Kampmark
Switzerland and the Criminal Mind
Website of the Day
Revisiting the Black Panthers
September 20, 2010
Michael Hudson
Where is the World Economy Headed?
Gareth Porter
Bait-and-Switch in Afghanistan
Dave Lindorff /
Linn Washington
New Tests Show Key Witnesses Lied at Mumia Abu Jamal Trial
Pam Martens
A Whistleblowing Mom and Goldman Sachs Plaintiffs Confront the Same the Reality
Ralph Nader
Safer at Most Speeds
Stephen Crawford /
Shawn Fremstad
A Better Way to Measure Poverty
Marjorie Cohn
The Persecution of Pfc. Bradley Manning
Lawrence Davidson
Martin Peretz in Love
Steve Early
Scoundrel Time at Kaiser
Jayne Lyn Stahl
The Scandal That Wasn't
Website of the Day
The Lesser Evil
September 17 - 19, 2010
Alexander Cockburn
Autumn of the Driveler
James B. Rule Elizabeth Warren's Challenge: the Banks and Their Protectors
Saul Landau /
Nelson Valdés
The Confessions of Roger Noriega
Ishmael Reed
Why Some White Progressives Make Me Sick: Black Men and the White Left
Mike Whitney
Housing:
The Swelling Backlog
Diana Johnstone
Serbia Surrenders Kosovo to the EU
Rannie Amiri
The Saudi Arms Deal: Stirring Persian Gulf Waters
David Rosen
Tea Party Panic: the Fear of Sex, Race and Inter-racial "Pollution"
Ramzy Baroud
Regarding US Muslims: a Misguided Debate
Richard Phelps
Burning and Building
Sheldon Richman
They Died for Iran
Alan J. Singer
Beware the Jabberwockies
Margaret Kimberley
The Charter School Con
David Tresilian
On the Trail of "Blood Diamonds"
Missy Beattie
American Graffiti
Mark Weisbrot
The Future of the Internet
Marco Antonio Martínez García
Pollution Knows No Borders
Stewart J. Lawrence
Rolling the Dice on Immigration Reform
Linh Dinh
Kill Them: Michael Enright's America
Jim Goodman
The Food Crisis is Not About a Food Shortage
Abdel-Moneim Said An Aesthetic Desert: Egypt's Stolen Van Gogh
John Grant
The Farce That Keeps on Giving in Afghanistan
Robert Jereski
Banning Methane Mining
Billy Wharton
Street Politics on 9/11
Shahid Mahmood
The Cartoonist and the Pastor
Charles R. Larson
You Are What You Think
David Yearsley
Unexpected Encounters With Greatness
Poets' Basement
Taylor, Cirino and Crissman
Website of the Weekend
Gogol Bordello: Immigraniada
September 16, 2010
Laura Carlsen
Plan Colombia for Mexico
Alexander Cockburn
Remembering Ben Sonnenberg
Clancy Sigal
The Poor Man's Artillery:
What IEDs Can Do
Gareth Porter
Blowback in Kandahar
Patrick Cockburn
Pakistan Flood Survivors Now Face Threat of Malaria
Philippe Marlière
France's Great Pension Swindle
Lawrence Davidson The Great Muslim Scare: Here Come the True Believers
John Severino
In Chile, Two Kinds of Terrorism
Website of the Day
The Gitmo 176
September 15, 2010
Mike Whitney
Doomsday for Lehman
Alan Nasser
Driving Another Nail Into the Coffin of the New Deal
Nelson P. Valdés
The Cuban Model and
Castro's "Confession"
David Correia
If Only Glenn Beck Were a Cyborg: Inside the Singularity Movement
Ron Jacobs
The Dutchman and Pastor Jones
Saif Shahin
Iran: War Talk, Peace Talk
Shamus Cooke
When Corporations Own Congress
Michael Winship
Escaping Tolerance
Mohamed Abdel-Baky
Egypt Going Nuclear
Betsy Ross
No Bull
Charles R. Larson
The Politics of Onanism:
the Anti-Masturbation Candidate
Website of the Day
Tools for Radicals
September 14, 2010
Kathy Kelly
Banning Slaughter
Israel Shamir /
Paul Bennett
Assange Besieged
Esam Al-Amin
Three Sides of the Qu'ran Burning Triangle
Dean Baker
Economist Failure:
the Soft Bigotry of Low Expectations
Stewart J. Lawrence
Have Immigration Activists Won the Battle But Lost the War?
Benjamin Dangl
Chile's Ghosts
David Macaray
When the Work Breaks You Down
Sheldon Richman
Obama the Neoconservative
P. Sainath
How Right You Are, Prime Minister!
Harvey Wasserman
Is the Nuclear Renaissance Dead Yet?
Website of the Day
Unseal Nixon's Grand Jury Testimony
September 13, 2010
Michael Hudson Obama's Thatcherite Gift to the Banks
Mike Whitney
The Hyper-Inflation Mirage
Mark Weisbrot
The Venezuelan Economy: the Media Gets It Wrong Again
Michael Barker
Foundations and the Environmental Movement: an Interview with Daniel Faber
Ralph Nader
Doomsday for Democrats?
Michael Dalton
Return to the Cove of Blood: a Report From Taiji
Marjorie Cohn
Business as Usual in Iraq
Richard Trumka
How the Corporados Wrecked Retirement
Dave Lindorff
Growth Has Little to Do With Jobs or Reducing Poverty
David Michael Green
I Have a Dream
Website of the Day
The Blues Collective
|
October 14, 2010
Rolling the Dice
Bernanke Ponders the "Nuclear" Option
By MIKE WHITNEY
Ben Bernanke's speech on Friday in Boston could turn out to be a real barnburner. In fact, there's a good chance the Fed chairman will announce changes in policy that will stun Wall Street and send tremors through Capital Hill. Along with another trillion or so in quantitative easing, Bernanke is likely to appeal to congress for a second round of fiscal stimulus, this time in the form of a two-year suspension of the payroll tax. That's what he figures it will take to jump-start spending and rev-up the flagging economy. It could be an extraordinary intervention.
Bernanke laid out the details in a speech he gave in May 2003 to the Japan Society of Monetary Economics, in which he outlined the policies Japan should enact to beat deflation. Here's what he said:
“Rather than proposing the more familiar inflation target, I suggest that the BOJ consider adopting a price-level target, which would imply a period of reflation to offset the effects on prices of the recent period of deflation. Second, I would like to consider an important institutional issue, which is the relationship between the condition of the Bank of Japan's balance sheet and its ability to undertake more aggressive monetary policies.... Finally, and most important, I will consider one possible strategy for ending the deflation in Japan: explicit, though temporary, cooperation between the monetary and the fiscal authorities."
There it is. Bernanke is planning to reflate asset prices, purchase more government bonds, and enlist congress's support to pump liquidity into the broader economy. It's an ambitious strategy that could push the dollar over the edge, but the alternatives are equally bleak. Bernanke knows that "at best" GDP will hover around 1 to 2 per cent through 2011 while the public grows increasingly restless about soaring unemployment. He also knows that when interest rates are stuck at zero the only way the central bank can zap the economy back to life is by increasing inflation expectations. That means, the Fed has to persuade people they've “lost it” and are planning to destroy the currency via the printing presses. It's all baloney. The Fed won't destroy the dollar. They just want to use the element of surprise to give the economy a good jolt. Gold bugs think the Fed is steering the country towards hyperinflation, but they're mistaken. It's all part of a larger calculation.
Bernanke may be a died-in-the-wool class warrior, but he's no moron. His policies are designed to overshoot in order to change expectations and get consumers out of their funk. He even says so in the speech. Here's a clip:
"A concern that one might have about price-level targeting, as opposed to more conventional inflation targeting, is that it requires a short-term inflation rate that is higher than the long-term inflation objective."
The only way to stimulate economic activity is to convince people that the dollar they presently have in their pockets will be worth less tomorrow. That's what puts the Jones's back into the minivan scuttling off to the mall. But what seems like profligate spending on the Fed's part, (QE) is really just a way of restoring the pre-crisis price level. Call it asset inflation if you want, but the bottom line is, Bernanke is not going to sit back while disinflation turns to deflation, the real value of personal debts rise, and the bankruptcies, defaults and foreclosures continue to mount. He's going to pull out all the stops and carpet bomb the economy with monetary and fiscal stimulus. Here, again, is how Bernanke lays out his thesis:
"One possible approach to ending deflation in Japan would be greater cooperation, for a limited time, between the monetary and the fiscal authorities. Specifically, the Bank of Japan should consider increasing still further its purchases of government debt, preferably in explicit conjunction with a program of tax cuts or other fiscal stimulus."
Good. So Bernanke realizes that he can't go it alone. He has to get congress on board if he wants to succeed. (which is probably why the Fed's meeting was scheduled after the midterms)
Bernanke again:
“... Consider for example a tax cut for households and businesses that is explicitly coupled with incremental BOJ purchases of government debt--so that the tax cut is in effect financed by money creation. Moreover, assume that the Bank of Japan has made a commitment, by announcing a price-level target, to reflate the economy, so that much or all of the increase in the money stock is viewed as permanent.
Under this plan, the BOJ's balance sheet is protected by the bond conversion program, and the government's concerns about its outstanding stock of debt are mitigated because increases in its debt are purchased by the BOJ rather than sold to the private sector. Moreover, consumers and businesses should be willing to spend rather than save the bulk of their tax cut: They have extra cash on hand, but--because the BOJ purchased government debt in the amount of the tax cut--no current or future debt service burden has been created to imply increased future taxes. Essentially, monetary and fiscal policies together have increased the nominal wealth of the household sector, which will increase nominal spending and hence prices."
This is truly radical, but it could work. And, the quickest way to engage the policy would be by slashing the payroll tax which would, in effect, give every working man and woman in the country a raise in pay.
Bernanke's comments are also a tacit admission that the banking system is still dysfunctional and cannot provide the credit needed for the next expansion, so he is bypassing the privately-owned system altogether and transferring money to consumers directly. Naturally, this will have a positive effect on spending and on any prospects for a recovery.
The cagey Bernanke has even concocted the public relations rationale for fending off the deficit hawks who will undoubtedly point to his plan as an example of wasteful government spending.
Bernanke:
"Isn't it irresponsible to recommend a tax cut, given the poor state of Japanese public finances? To the contrary, from a fiscal perspective, the policy would almost certainly be stabilizing, in the sense of reducing the debt-to-GDP ratio. The BOJ's purchases would leave the nominal quantity of debt in the hands of the public unchanged, while nominal GDP would rise owing to increased nominal spending. Indeed, nothing would help reduce Japan's fiscal woes more than healthy growth in nominal GDP and hence in tax revenues.....More generally, by replacing interest-bearing debt with money, BOJ purchases of government debt lower current deficits and interest burdens and thus the public's expectations of future tax obligations."
The Bernanke plan seems to do everything except whiten teeth. But wouldn't it make more sense to restructure the banking system so the toxic assets can be removed and the banks can lend freely again? And wouldn't it be better to strengthen labor unions (so that wages keep pace with productivity) so workers can generate sufficient demand to keep the economy running smoothly without panicky injections of emergency stimulus? Of course, that would mean a truce in the ongoing class war which wouldn't fly with plutocrats who take joy in seeing the unemployment lines wind from one side of the country to the other.
Bernanke's plan could work. Congress could pass emergency legislation to suspend the payroll tax for two years stuffing hundreds of billions of dollars into the pockets of struggling consumers. The Fed could make up the difference by purchasing an equal amount of long-term Treasuries keeping the yields low while the economy resets, employment rises, asset prices balloon, and markets soar. As the economy rebounds, the dollar will steadily lose ground triggering a sharp rise in commodities and an increase in exports that will spark a clash with foreign trading partners. Then what?
Yes, Bernanke's "nuclear option" could help to resuscitate economy, but it could also erode confidence in the dollar leading to the untimely demise of the world's reserve currency. It's all a roll of the dice.
Mike Whitney lives in Washngton state. He can be reached at fergiewhitney@msn.com |
Now Available from CounterPunch Books!
Wasting Libby:
the True Story of How the WR Grace Corporation Left a Montana Town to Die (and Got Away With It)
By Andrea Peacock
Introduction by Jeff Bridges
![](/web/20101015005305im_/http://www.counterpunch.org/roberts.jpeg)
How the Economy
Was Lost
By Paul Craig Roberts
Yellowstone Drift:
Floating the Past
in Real Time
by John Holt
Introduction by Doug Peacock
Born Under a Bad Sky:
Notes from the Dark Side
of the Earth
By Jeffrey St. Clair
Waiting for
Lightning
to Strike:
The Fundamentals
of Black Politics
Kevin Alexander Gray
Click Here to Buy!
"The Case Against
Israel"
Michael
Neumann's Devastating Rebuttal of Alan Dershowitz
![](/web/20101015005305im_/http://www.counterpunch.org/caseneumann.jpg)
Click Here to Buy!
RED STATE REBELS:
Tales of Grassroots Resistance from the Heartland
![](/web/20101015005305im_/http://www.counterpunch.org/redstatecov.gif)
Edited by
Jeffrey St. Clair
and Joshua Frank
How the Press Led
the US into War
![](/web/20101015005305im_/http://www.counterpunch.org/endtimes.jpg)
Buy End Times Now!
The Secret
Language
of the Crossroads:
HOW THE IRISH
INVENTED SLANG
By Daniel CassidyWINNER
OF THE
AMERICAN BOOK AWARD!
![](/web/20101015005305im_/http://www.counterpunch.org/cassidy.gif)
Click Here to Buy!
The Inside Story of the Shannon Five's Smashing Victory Over the
Bush War Machine
By Harry Browne ![](/web/20101015005305im_/http://www.counterpunch.org/hammer.jpg)
Saul Landau's
Bush and Botox World
with a Foreword by Gore Vidal![](/web/20101015005305im_/http://www.counterpunch.org/landau.jpg)
Click Here to Order!
Grand Theft Pentagon
How They Made a Killing on the War on Terrorism
![](/web/20101015005305im_/http://www.counterpunch.org/gtp.jpg)
Spell Albuquerque:
Memoir of a
"Difficult Student"
By Tennessee Reed
![](/web/20101015005305im_/http://www.counterpunch.org/sacco.jpeg)
![](/web/20101015005305im_/http://www.counterpunch.org/ST%20CLAIR-2.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/imperial%20crusades.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/whiteoutgray.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/kolkocrisis.jpeg)
"Powerful and shocking ..
see this film"
-- Joseph Stiglitz on American Casino
![](/web/20101015005305im_/http://www.counterpunch.org/muqtadapc.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/serpents.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/lincoln.jpeg)
![](/web/20101015005305im_/http://www.counterpunch.org/mcohn.jpeg)
![](/web/20101015005305im_/http://www.counterpunch.org/linemagna.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/robertstyr.gif)
![](/web/20101015005305im_/http://www.counterpunch.org/patrickoccupation.jpg)
The Occupation
by Patrick Cockburn
![](/web/20101015005305im_/http://www.counterpunch.org/reedmix.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/rummyandrew.gif)
![](/web/20101015005305im_/http://www.counterpunch.org/neve.jpeg)
![](/web/20101015005305im_/http://www.counterpunch.org/AnthroIntelligence.jpg)
![](/web/20101015005305im_/http://www.counterpunch.org/makdisipal.jpeg)
![](/web/20101015005305im_/http://www.counterpunch.org/bricmont.gif)
Humanitarian Imperialism
By Jean Bricmont
![](/web/20101015005305im_/http://www.counterpunch.org/zirindome.JPG) ![](/web/20101015005305im_/http://www.counterpunch.org/ali_pirates.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/mejia.gif) ![](/web/20101015005305im_/http://www.counterpunch.org/afterkolko.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/walkingzeke.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/bageant.gif) ![](/web/20101015005305im_/http://www.counterpunch.org/exodus.gif) ![](/web/20101015005305im_/http://www.counterpunch.org/damnation300.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/prashaddispatch.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/thrillcraft.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/dunbarroots.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/cubamusic.jpg)
CITY BEAUTIFUL
By Tennessee Reed![](/web/20101015005305im_/http://www.counterpunch.org/peacockgrizz.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/dangl.gif) ![](/web/20101015005305im_/http://www.counterpunch.org/casselwar.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/kozloff.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/sharonfire.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/beyondchutz.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/christison.gif) ![](/web/20101015005305im_/http://www.counterpunch.org/contours.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/pricecov.jpg) ![](/web/20101015005305im_/http://www.counterpunch.org/ashburypark.jpg)
|