Romney learns to love the Fed
With the primary over, the Romney camp has nice things to say about Ben Bernanke, whom the GOP base loves to hate
Mitt Romney (Credit: AP) Mitt Romney never called Federal Reserve Chairman Ben Bernanke a traitor to his country or threatened to string him up in a Texas lynching. That was Rick Perry. Nor did he label the mild-mannered economist “the most inflationary, dangerous and power-centered chairman of the Fed in history.” That was Newt Gingrich. Nor did he sign a letter demanding that the Fed do absolutely nothing that might conceivably stimulate economic growth (and thereby enhance President Obama’s reelection chances). That was the entire GOP congressional leadership.
But he did say, when asked directly during a debate last September, that he would not reappoint Bernanke as chairman of the Fed. As Romney clunkily explained it back then, Bernanke’s monetary stimulus “has over-inflated the amount of currency that he’s created” and “did not get Americans back to work.”
With those words in mind, how should we interpret a report from the Wall Street Journal indicating that, as far as Romney’s top economic advisor, Glenn Hubbard, is concerned, “if there’s a hero in this story, it’s the Fed and Chairman [Ben] Bernanke.”
The “story” being the great narrative of financial crisis, recession and recovery. Hubbard is someone whom we should probably take seriously on the topic of Bernanke. Both men served as chair of Bush’s Council of Economic Advisors. Presumably, Hubbard is one of the people whose opinion on whether to reappoint Bernanke or pick someone else would be important. (Hubbard is also a prime candidate for the job himself.) But if Hubbard is publicly labeling Bernanke a hero, why wouldn’t Romney reappoint him?
Hubbard’s comments provoked some unkind tweets from financial journalists about Romney’s new Etch-a-Sketch drawing of Bernanke. And not without merit. The truth is, the real reason Romney turned against Bernanke had nothing to do with his policies. Bernanke is much more vulnerable to criticism from the left for not doing enough to address unemployment than he is from the right for stoking nonexistent inflation. As recently as January 2010, Romney was complimenting Bernanke on the great job he was doing.
But the GOP base hates Bernanke. The Tea Party sees him as an unelected tyrant, busily bailing out the banks while creating oodles of “fiat” currency that will ultimately destroy the nation. The audience at a CNN debate in which Michele Bachmann was asked if she supported Rick Perry’s accusation of treasonous behavior cheered wildly at the mere raising of the topic. During the primary campaign, Romney tailored his Federal Reserve policy points to appeal to the crowd that sees central banking as just one step to the right of the antichrist.
But that’s all over now. As of Tuesday night, Romney has officially acquired sufficient delegates to clinch the Republican nomination for president. He no longer is under any requirement to pander to the Republican base and is now free to act like the moderate Republican that he’s always been.
And make no mistake, if there’s one thing that Romney will dedicate himself to as president, it will be keeping Wall Street and investors in financial markets happy. That will mean continuing, without change, to support a Federal Reserve that is eager and willing to flood the monetary system with cheap cash every time it looks like the stock market is about to crash. Bernanke is the perfect guy for that, or, failing that, someone who can be depended on to do exactly what Bernanke would do.
Mitt’s for-profit school mess
Romney's plan to fix higher education is a handout to shoddy career schools and a giant step backward
Mitt Romney (Credit: AP) Sometimes it is almost too insultingly easy to connect the dots.
Last week, Mitt Romney blasted Barack Obama’s record on education in a high-profile speech and white paper. The critique ranged from kindergarten to grad school, but let’s pick out one issue that we’ve been following at Salon for some time. On the specific topic of for-profit schools of higher education — notorious both for saddling students with high levels of debt and for their abysmal graduation rates — Romney promises to repeal Obama’s “ill-advised” regulations targeting the sector.
Continue Reading ClosePrivate equity’s evil twin
The Facebook IPO debacle exposed venture capital as just as problematic as the industry that gave us Romney
Facebook founder, Chairman and CEO Mark Zuckerberg, center, rings the Nasdaq opening bell from Facebook headquarters in Menlo Park, Calif on May 18, 2012 (Credit: AP/Zef Nikolla) A funny thing happened on the way to the Facebook IPO. The clash of competing economic ideologies at play in the 2012 presidential campaign got a lot more complicated.
With our first-ever private equity honcho running for president in an era of high unemployment and slow economic growth, it was always a foregone conclusion that this year’s election campaign would include an appraisal of whether Mitt Romney’s version of capitalism is good for America. It’s a debate the culture has been passionately engaged in at least as far back as Oliver Stone’s “Wall Street,” and the battle lines are well-drawn. Is Bain Capital a parasitic corporate raider or an engine for lean-and-mean capitalist renewal? You get to make the call, and then you can go vote.
Continue Reading CloseWall St. ruins Facebook
The social network's debacle of a public offering exposes, once again, the rotten heart of finance
Mark Zuckerberg (Credit: Reuters/Brian Snyder) Could there be a bigger public relations debacle for an aspiring technology colossus than the Facebook IPO? It’s bad enough when the stock price doesn’t “pop” at all on the first day of trading, but it gets a lot worse when the financial press spends the following week debating whether the machinations behind the scenes leading up to the botched public offering constitute outright evidence of securities fraud or merely a toxic mixture of greed and incompetence.
Continue Reading CloseWelcoming Wall Street’s anger
Obama should pick a fight with reckless bankers by beefing up the Volcker rule
Paul Volcker and President Obama (Credit: Reuters/Kevin Lamarque) Jamie Dimon’s Wall Street peers have good reason to be annoyed with him. Over the past several years, the financial sector spent hundreds of millions of dollars lobbying to weaken bank reform. Then came JPMorgan’s multiple-billion-dollar-losing credit default swap blunder. And suddenly, Washington hit the pause button on regulatory rollback. All it took was one reminder of how stupid even the best-run banks can be for everyone to recall that trusting these jokers to act responsibly is a losing game, and, wham, bank regulation was back in the news. Efforts to repeal various parts of the Dodd-Frank bank reform act halted, but more important, pundits and politicians are focusing a brand-new round of attention on the ongoing process of writing the “Volcker rule” into law.
Continue Reading CloseGOP to modernity: Stop
For House Republicans, the less we know about our country and our planet, the better
House of Representatives Republican leadership (Credit: AP) Watching the antics of the House GOP, you get the very strong sense that if the class of Republicans elected in 2010 were offered a chance to repeal the Enlightenment, they would leap at the opportunity. The great flowering of science and philosophy that reached critical mass in the 17th century employed human reason to batter away at the dogmas of blind faith. But as far as the Tea Party seems to be concerned, that was just one big wrong turn.
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