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May 25, 2012
Mark Clayton: Is Hillary's State Dept. hacking Al Qaeda? Not quite
Erika Bolstad: Temple cancels Wasserman Schultz speech
The Kosher Gourmet by Ethel G. Hofman: The former president of the International Association of Culinary Professionals, whose members included the likes of Julia Child, is back with contemporary Shavous cuisine: Ruby Fruit Soup, Sweet Noodle Kugel with Cheese, Key Lime Curd, Calsone Casserole Frittata with Wild Mushrooms, Sun-dried tomatoes and Olives, Baked Tilapia with Pepper Cheese Cream and Brown Sugar Shortbread
May 24, 2012
Jeff Jacoby: The peace process battered Israel's reputation
Michael Muskal: 'Pro-choice' position hits record low, according to poll
Chris Farrell: Are We in a Tech Bubble?
The Kosher Gourmet by Penelope Wall: PHILLY CHEESE STEAKS --- hold the steak!
May 23, 2012
Tony Pugh: More private colleges offering tuition discounts
Mary Beth Franklin: How to Choose the Right Annuity for You
Tina Susman: The wig wasn't enough: Man gets 13 years for posing as his dead mom
The Kosher Gourmet by Emma Christensen:A simple way to do fish right
May 22, 2012
Warren Richey: Can US group challenge overseas surveillance act? Supreme Court to decide
Thomas M. Anderson: Walking Away From a Mortgage
The Kosher Gourmet by Megan Gordon: Enjoy a celebration of the most rich and layered flavors: Black bean, sweet potato and quinoa chili
May 21, 2012
Mark Clayton: Cybersecurity: How US utilities passed up chance to protect their networks
Howard LaFranchi: NATO summit: Who will foot the bill for long-term Afghanistan security?
Chris Farrell : Earn Dividends in Emerging Markets with This WisdomTree ETF
Stephen Whiteside, Ph.D. : Mayo Clinic Medical Edge: Social anxiety disorder --- or just shy?
Guy Jackson : Victim's father regrets death of Lockerbie bomber
The Kosher Gourmet by Mario Batali: Famed chef's veal shoulder farsumagru: A festive meat course for late spring
May 18, 2012
Rabbi Berel Wein: Striving: The People of the Book's Book for (All of) the People
Steven Goldberg: 5 Great Stock Picks and the Exchange-Traded Fund that Owns Them
Mary Pickett, M.D.: Ask the Harvard Experts: Don't be forced into gluten-free lifestyle based merely on a doctor's false-positive test
The Kosher Gourmet by Carolyn Malcoun: DIY healthy lunchbox treats: HOMEMADE FRUIT BARS for kids and brown-bagging adults alike
May 17, 2012
Warren Richey: Teacher fired for being unwed and pregnant can sue religious school, court rules
Josh Mitnick: Netanyahu's 'centrist' coalition is already proving it's anything but
Steven Goldberg: Earn Dividends in Emerging Markets with This WisdomTree ETF
Amina Khan: Research links coffee to lower death rates
The Kosher Gourmet by Faith Duran : Cheesy Potato Breakfast Casserole with Cheddar and Sun-Dried Tomatoes
May 16, 2012
Carmen Terzic, M.D., Ph.D. : Mayo Clinic Medical Edge: A variety of exercises can help improve balance
Melissa Healy: National strategy on Alzheimer's disease aims to halt it by 2025
The Kosher Gourmet by Joyce White : GOODNESS GRACIOUS: GREENS! 4 winning recipes that are no longer just for down-home folks (Includes expert tips & techniques)
May 15, 2012
Kristen Chick: Obama administration resumes arms sales to Bahrain despite serious unresolved human rights issues. Activists feel abandoned
Pat Mertz Esswein: Homes are now affordable again and mortgage rates are low. What you need to know before you buy
Kathy Kristof: Our Practical Investor Fights Inflation with These 6 Investments
Sue Hubbard, M.D.: The Kid's Doctor: Lactose intolerant young child? Check again
The Kosher Gourmet by Kathy Hunt: Spread a Little Excitement with EXOTIC CONDIMENTS (4 RECIPES)
May 14, 2012
Lisa Gerstner: How to Protect Your Identity, Finances If You Lose Your Phone
Harvard Health Letters: Heart disease and dementia
The Kosher Gourmet by Megan Gordon: MANGO COCONUT OAT MORNING MUFFINS are a bright but hearty delight
May 11, 2012
Jessica L. Anderson: Get the Best Deal on a Used Car
Jett Stone: Forget face-lifts and fake knees. Scientists have seen the fountain of youth --- and it's broccoli
The Kosher Gourmet by Chef Mario Batali: The famed chef's vegetable dish that tastes true to the season: FAVAS AND SUGAR SNAP PEAS WITH POTATOES AND TARRAGON
May 10, 2012
Sergei L. Loiko: Putin sends warning to U.S., NATO in Victory Day speech at Red Square
Mary Rourke: How being a 'mentch' got Vidal Sasoon his start and fighting in Israel's War of Independence provided him with confidence and a strong sense of his own identity
Jeff Bertolucci: Get Home Phone Service for Less Than $10 a Month
The Kosher Gourmet by Betty Rosbottom: Gleaming with its golden, crimson, and snowy white hues, this silken smooth and creamy STRAWBERRY ORANGE TRIFLE looks impressive, but is easy to prepare
May 9, 2012
Sharon Palmer, R.D. How you can reduce your risk -- or delay -- chronic diseases associated with aging
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Jewish World Review
Sept. 1, 2010
/ 22 Elul 5770
Bernanke shows off his popguns
By
Robert Robb
http://www.JewishWorldReview.com |
In his speech at the Jackson Hole retreat last week, Chairman Ben Bernanke tried to show that the Fed still had plenty of ammunition to fire, if necessary, in the fight for economic recovery. Instead, he demonstrated that all he has are popguns.
According to Bernanke, the Fed could: (1) buy even more stuff, creating even more money out of thin air in the process; (2) change its official statement to indicate an intention to maintain an accommodative monetary policy even longer than the current statement suggests; and (3) reduce the already low interest rate the Fed pays on bank reserves.
The only substantive move would be to buy more stuff. But if creating $2 trillion out of thin air by buying securities hasn't triggered a recovery, why the assumption that doing even more of it will turn the trick?
All of these options would be designed to do what Fed policy to date has been designed to do: lower interest rates. But if lower interest rates were the key to this recovery, we'd all already be driving streets paved with gold.
Bernanke believes that the problem is a lack of consumer confidence. Consumers aren't willing to spend so businesses aren't gearing up to meet a demand that doesn't exist.
The real economic problem, however, is uncertainty. Uncertainty can lead to a lack of confidence, but it is not the same thing. And Bernanke is contributing to uncertainty by indicating that the Fed plans to manage monetary policy based upon quarter-to-quarter economic results rather than for the long-haul.
The economy is awash with cash. Banks and businesses are sitting on trillions of dollars. Business fundamentals are sound. Businesses are profitable and price-earnings ratios are historically low.
If banks are unwilling to lend, interest rates need to be higher, not lower. And lenders need confidence that the dollar will retain its value over time. Despite Europe's recent troubles, the dollar has declined 42 percent compared to the euro over the last decade. The Greenspan-Bernanke period of loose money, which Bernanke pledges to continue, creates lender uncertainty.
Not that there is a big unmet demand by borrowers. They face their own uncertainties.
For there to be a sustainable recovery, the economy must first find solid footing. Yet federal monetary and fiscal policies keep attempting to interrupt the corrections necessary to reach that solid footing, while throwing off new uncertainties all the time.
Here is what is necessary to reach that solid footing, from which a sustainable economic recovery would be possible:
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The housing correction needs to be allowed to run its course without government efforts to prop up prices or demand.
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Households need to be allowed to restore and improve their savings without government importuning or incentives to spend, spend, spend.
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The Fed needs to develop a credible plan to withdraw all the money it created out of thin air and protect the long-term value of the dollar.
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Congress needs to set tax policy for the next 10 years, not the next two, even if it is in a bad place.
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The federal government needs to develop a credible plan to reduce spending and borrowing.
Some of this, particularly the last point, isn't likely to happen. But there isn't likely to be a sustainable recovery until federal monetary and fiscal policies become less of a moving target.
If policy is semi-set, economic actors can calculate risks. But if policy is a moving target, risk calculation becomes infinitely harder.
There are still die-hards, unfortunately many in positions of authority, but it should be clear by now that loose monetary policy and deficit spending aren't going to trigger a sustainable economic recovery.
That requires a firmer foundation.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.
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© 2010, The Arizona Republic
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