|"....If he's not going to cut rates to support the economy, then the only conclusion you can make regarding [US Federal Reserve chairman Ben]Bernanke's policy intentions is that he is going to cut the sinking economy free. The chairman and the board apparently intend to row away in their comfortable lifeboat as the economy around them screams and drowns. |
If you think that no society could be so callous as to let millions of its most vulnerable citizens suffer the harsh gales of casino capitalism's vicissitudes, you haven't been watching much American social and political debate recently. Rapidly, the subprime mortgage crisis, and the misery and heartache it is delivering to hundreds of thousands of struggling American homeowners every month, is falling from the American public's all too brief attention spans - the only endangered homeowner who gets media attention these days for his housing woes is former Johnny Carson sidekick Ed McMahon, facing imminent foreclosure on his $6 million Beverly Hills mansion.
The Congressional housing foreclosure relief bill sponsored by Senator Christopher Dodd of Connecticut and Representative Barney Frank of Massachusetts is, like most Democratic Party initiatives since the party's takeover of Congress early in 2007, stalling under the weight of well-worn Republican legerdemain and obfuscation, not to mention the likely veto that awaits it from President George W Bush. Republican Senator Jim Bunning of Kentucky held up the bill to make sure that no government monies in it would go to illegal aliens, drug offenders, or sex offenders (and definitely not to someone who was simultaneously all three). Obviously, public demands for relief from the housing crisis have not yet reached a level sufficiently insistent that Republicans are going to stop pitching raw red meat into the foaming mouths of their political base, the so-called "values voters".
Publicity over the housing crisis has been replaced by impotent panic over sky-high gas prices (not that the bitterly polarized Congress is going to do anything about that, either) and a new particularly American phenomenon; the abundant amount of hate, venom and vitriol pouring out from the men of God in the pulpits of the nation’s most popular and well-attended houses of worship.
If I owned a business that needed a rapid US economic recovery to remain solvent, or a house that needed some price appreciation real soon to be able to be refinanced, or even a stock portfolio insufficiently hedged with ether foreign currency or foreign stock and gold holdings, I’d be looking at the events of late last week with the highest possible levels of trepidation.
No salvation to these problems is likely to be seen by looking east to the Potomac, to the nation’s dysfunctional seat of government in Washington. I’d look the other way, over the Pacific, to China and the other newly and rapidly industrializing economies. Export demand from these nations is now just about the only thing keeping the American economy away from the abyss.
June 09, 2008
Julian Delasantellis of Asian Times Online has a problem with the Fed's current and recent past policies concerning the prime rate (excerpt):