Fed Chairman Quotes

If something is wrong for you or me, it is also wrong for the cop, the soldier, the mayor, the governor, the general, the Fed chairman, the president. Theft does not become acceptable when they call it taxation, counterfeiting when they call it monetary policy, kidnapping when they call it the draft, mass murder when they call it foreign policy. We understand that it is never acceptable to wield violence nor the threat of violence against the innocent, whether by the mugger or the politician.

Almost every Fed chairman in the past 60 years has manipulated interest rates to brighten the economic outlook for incumbent presidents or newly elected presidents who won by large margins. The purchasing power of the U.S. dollar has fallen 94 percent in the past 100 years. The only way you can create inflation is by creating more money that is backed by the same reserve assets; the Fed is the only entity that can create more money. Ben Bernanke’s quantitative easing (QE) programs have pumped billions of unfunded dollars into the economy, thereby setting us up for massive inflation in the very near future. If this isn’t a form of financial terrorism, it is incompetence of the highest order.

Keep them entertained with sports and scandals and they’ll never notice that all they do is work to earn enough to pay debt, taxes and inflation,” a former Fed Chairman said privately.

The people in a position to resolve the financial crisis were, of course, the very same people who had failed to foresee it: Treasury Secretary Henry Paulson, future Treasury Secretary Timothy Geithner, Fed Chairman Ben Bernanke, Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO John Mack, Citigroup CEO Vikram Pandit, and so on. A few Wall Street CEOs had been fired for their roles in the subprime mortgage catastrophe, but most remained in their jobs, and they, of all people, became important characters operating behind the closed doors, trying to figure out what to do next. With them were a handful of government officials—the same government officials who should have known a lot more about what Wall Street firms were doing, back when they were doing it. All shared a distinction: They had proven far less capable of grasping basic truths in the heart of the U.S. financial system than a one-eyed money manager with Asperger’s syndrome.

now his not-so-secret ambition was to be chairman of the Fed after my departure.

It was later revealed that Fed Chairman Bernanke secretly sent billions over to Europe to save European banks, but zero went to Lehmann.

I doubt there’s ever been a closer relationship between a Treasury secretary and a Fed chairman.

I already was painfully aware that the Fed chairman’s remarks can easily be misunderstood or overinterpreted.

Kanjorski claims to be repeating an account of events given to him by US Treasury Secretary Henry Paulson and Fed Reserve chairman Ben Bernanke: On Thursday [18 September], at 11 a.m. the Federal Reserve noticed a tremendous draw-down of money-market accounts in the US; [money] to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there. If they had not done that, their estimation is that by 2 p.m. that afternoon $5.5 trillion would have been drawn out of the money-market system of the US; [this] would have collapsed the entire economy of the US, and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.10

The Federal Reserve has always advertised itself as being above politics, impervious to outside influence. This is, of course, nonsense. The chairman is appointed to a four-year term by the president of the United States and must be confirmed by the Senate. Members of the Board of Governors are appointed to staggered fourteen-year terms by the president and are also approved by the Senate. It is common for governors to be appointed to an unfilled term if someone resigns before the end of their tenure. But the governors cannot be removed for their policy views—not by the chairman, or the president, or Congress. They have complete and total immunity.

Take Brooksley Born, former chair of the Commodity Futures Trading Commission (CFTC), who waged an unsuccessful campaign to regulate the multitrillion-dollar derivatives market. Soon after the Clinton administration asked her to take the reins of the CFTC, a regulatory backwater, she became aware of the over-the-counter (OTC) derivatives market, a rapidly expanding and opaque market, which she attempted to regulate. According to a PBS Frontline special: "Her attempts to regulate derivatives ran into fierce resistance from then-Fed Chairman Alan Greenspan, then-Treasury Secretary Robert Rubin, and then-Deputy Treasury Secretary Larry Summers, who prevailed upon Congress to stop Born and limit future regulation." Put more directly by New York Times reporter Timothy O'Brien, "they ... shut her up and shut her down." Mind you, Born was no dummy. She was the first female president of the Stanford Law Review, the first woman to finish at the top of the class, and an expert in commodities and futures. But because a trio of people who were literally en-titled decided they knew what was best for the market, they dismissed her call for regulation, a dismissal that triggered the financial collapse of 2008. To be fair to Greenspan et al., their resistance was not surprising. According to psychologists Hillel Einhorn and Robin Hogarth, "we [as human beings] are prone to search only for confirming evidence, and ignore disconfirming evidence." In the case of Born, it was the '90s, the markets were doing well, and the country was prospering; it's easy to see why the powerful troika rejected her disconfirming views. Throw in the fact that the disconcerting evidence was coming from a "disconfirming" person (i.e., a woman), and they were even more likely to disregard the data. In the aftermath, Arthur Levitt, former chairman of the SEC, said, "If she just would have gotten to know us... maybe it would have gone a different way."12 Born quotes Michael Greenberg, the director of the CFTC under her, as saying, "They say you weren't a team player, but I never saw them issue you a uniform." We like ideas and people that fit into our world-view, but there is tremendous value in finding room for those that don't. According to Paul Carlile and Clayton Christensen, "It is only when an anomaly is identified—an outcome for which a theory can't account that an opportunity to improve theory occurs."13 One of the ways you'll know you are coming up against an anomaly is if you find yourself annoyed, defensive, even dismissive, of a person, or his idea.

It was,” the man said. “But when I returned from re-education, I discovered that my supply of copper wires was gone. During the Great Leap Forward, people broke down my door and carried away all the metal. You remember the slogan, ‘Struggle to produce 10.7 million tonnes of steel.’ When Chairman Mao instructed the villages to industrialize, my neighbours discovered all my bits and pieces, even my voltage meter, my collection of batteries, pinhole cameras and metal coils, not to mention my cooking pots and metal spoons, and fed them to the smelter that you’ll see if you walk fifty paces to the east of here. They managed to produce a surprising quantity of steel but, sadly, none of it was useable.” He shrugged and one of the electric lights fizzled, dimmed and then gleamed brightly again. “Upon my release, my neighbours all came and said, ‘Isn’t it a shame, Teacher Edison, you weren’t here to help us fulfill our steel quota?’ And then I was glad that I hadn’t been present to hand over all my spatulas and wires, as well as my mother’s wedding ring and the German stein my father brought from Düsseldorf many years ago, as well as my bicycle. Sometimes it is better not to say goodbye.

When my Princeton colleague Alan Blinder asked about my prospects of becoming Fed chairman, I downplayed the idea, saying the probability of that happening was “maybe 5 percent

What he had was unqualified support from heavy hitters including former Treasury secretaries Larry Summers and Bob Rubin, as well as the chairman of the New York Fed’s board—Pete Peterson, a former commerce secretary under

The leadership of the Fed (especially the Chairman) must get aggressive.

I doubted that my words would have the weight of Greenspan’s, and in any case it seemed to me that Congress is ruled first and foremost by interests and ideology, not by the advice of experts or supposed experts, including the chairman of the Fed.

Carter’s victory was the great opportunity for Democrats to show what they could do for the vast majority of the population. Instead they did next to nothing. Oh, they were able to get a big capital-gains tax cut passed, all right—and if you’re looking for the roots of today’s extreme inequality, it’s a good place to start. Carter’s Democrats deregulated airlines and trucking. They embraced austerity as inflation mounted higher and higher. They stood by indifferently as an employer counterattack squashed the decade’s militant unionism. When it came to New Deal programs like a proposed full-employment scheme, they proved to be worse than useless.19 What the Carter team really cared about was fighting inflation and balancing the budget, anti-populist causes for which they were willing to accept spiraling unemployment. When his handpicked Fed chairman, Paul Volcker, chose to tackle inflation by jacking interest rates up to a now unthinkable 20 percent, he sent the economy into a sharp recession that, in turn, scorched Carter’s hopes for a second term. As for the ordinary Americans who were hard hit by the shutting down of prosperity, Volcker had this winning admonition: “The standard of living of the average American has to decline.

In 1987, President Ronald Reagan appointed Greenspan chairman of the Board of Governors of the Federal Reserve System—a portentous name for the central bank of the United States, usually called, without affection, “the Fed.” By law, the mission of the Fed was, and still is, to maintain the stability of prices while promoting sustainable growth and full employment. The claims behind these goals possessed what I can only describe as a magical quality. They presupposed powers of prophecy and control wholly detached from economic reality. The chairman of the Fed, like the genie in the Arabian Nights, was expected to tame the whirlwind.

It’s hard to overstate how utterly mad it is for a Fed chairman in the age of the global economy to claim that a weak currency only affects tourists. It’s a little bit like saying a forest fire only really sucks if you’re a woodpecker.

Stonewalling requests from Congress to find details about what junk mortgages and other “toxic waste” the Federal Reserve was accepting in exchange for its swaps, Chairman Bernanke claimed that politicians had no right to know how the public purse was being put at risk. Bloomberg filed a Freedom of Information Act request, and nearly three years later, in July 2011, the Government Accountability Office provided Senator Bernie Sanders with a report detailing $16 trillion of Fed loans and swaps. It revealed how the officers of Wall Street’s leading banks who sat on the New York Federal Reserve Board gave their own firms the fortune of a century to tide them over. As