Subject: Huge drop in stocks, Bernanke fallout,
CBO’s questionable immigration scoring
Markets crashed Thursday
in the largest one-day point drop since September 9, 2011,
following theFOMC announcement
and Ben Bernanke’s press conference.
Former Federal Reserve senior official Steve Oliner explained yesterday on Fox Business why themarket reacted so strongly. (Timestamp 1:20-2:31)
:“There were two pieces of language
in the first paragraph [of the FOMC report] that I thought were really relevant. The first concerned the
characterization of the labor market. The previous meeting statement had said “some” improvement. Thisone said “further” improvement. So I get the sense the Fed thinks that they are further along with the
labor market improvement that they would need to see before they could start tapering. . . The other thingthat I thought was importa
nt is they downplayed somewhat the low inflation readings we’ve been getting. .. I think Bullard dissented because he thought this statement was too hawkish.”
But taper too soon, and Bernanke risks compromising the recovery.
supposed to be sending a tightening message now because that risks slower growth and deflation thatwill only push stocks and house p
rices back down.”
Given low inflation and the large job and output gaps (vs. the pre-recession trend),
there seems little policy need for tapering of any sort.”
As for Bernanke himself. . .
My guess is he probably is going to stick around towards
the end of the year because he wants to start the tapering himself.”
“If ever one
doubted that Ben Bernanke needs to step down from heading the Federal Reserve when his term expires
in January 2014, all one needed to do was to watch his press conference.”
More AEI scholar reactions to FOMC can be found here.
Even Paul Krugman misses George W. Bush.
“Krugman compares the response of the
Bush administration to the 2001 recession to that of the Obama administration to the Great Recession,
and finds that president Bush oversaw a response that was quite superior.”
Krugman bats 0-for-3 on entitlements.
providesa succinct argument for not doing anything on entitlement refo
rm. Succinct, but mostly wrong.”
Yes, IRS harassment blunted the tea party ground game.
:“Targeting Tea Party groups
would have been an e
ffective campaign strategy going into the 2012 election cycle.”