Obamanomics Has Failed Dismally and Bernanke Can't Save It

Comment #9

MADDOG10 — Sat, 15 Sep 2012 22:22:03 GMT

Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work. Guess what? It wonâ€™t work.......!!! <br... [ More ]

Comment #8

MADDOG10 — Sat, 15 Sep 2012 22:18:03 GMT

Bam and Bern one time wonders...

Comment #7

bobbya — Sat, 15 Sep 2012 19:51:42 GMT

4 MORE YEARS! 4 MORE YEARS! 4 MORE YEARS! 4 MORE YEARS! 4 MORE YEARS! 4 MORE YEARS

Comment #6

rdgrnr — Sat, 15 Sep 2012 16:23:26 GMT

This realization of the dreams from his father is destroying our nation. Which is EXACTLY what he wants.

Comment #5

sully16 — Sat, 15 Sep 2012 14:14:27 GMT

Cajun, Thanks for all the great info, many of the silenced pundits predicted this 3 years ago, nobody wants to listen, The man is not stupid, him and his merry band of destroyers know exactly what they are doing. They want us to collapse.

Comment #4

CajunWin4 — Sat, 15 Sep 2012 11:10:01 GMT

Posted By: Seawitch [Send E-Mail] Date: Saturday, 15-Sep-2012 03:52:13 FROM A READER DISHONORABLE DISCLOSURES The single most ing video you will ever see. This video, made by the U.S. Navy Seals and others armed forces officers and intelligence agents, will hopefully cost Obama his second term in office. Itâ€™s just incredible how effective this video is in convincing TRUE Americans that Obama is seriously harming this country. Hi... [ More ]

Comment #3

CajunWin4 — Sat, 15 Sep 2012 07:53:46 GMT

The big crash â€“ America plunges into Depression Alexander burn: Young Americans have given up watching the news. Itâ€™s too depressing ColumnLAST UPDATED AT 16:31 ON Thu 8 Jul 2010 It's the worst of times. America is plunging back into Depression. Only one out of every two Americans of working age has a job. Forty years ago that would have been okay. Dad went to the factory. Mom stayed at home to mind the kids. These days, just... [ More ]

Comment #2

CajunWin4 — Sat, 15 Sep 2012 07:09:20 GMT

The Fed's Balance At The End Of 2013: $4 Trillion September 14, 2012 Print Version Source: ZeroHedge What happens next: â€¢Imminently, the Fed's Open Markets Operations desk will commence buying $40 billion in MBS per month, or about $10 billion each week. Concurrently, the Fed which is continuing Operation Twist, will still purchase $45 billion in "longer-term" Treasurys, sterilized by the $45 billion or so in 1-3 years Bonds it w... [ More ]

Comment #1

CajunWin4 — Sat, 15 Sep 2012 05:55:45 GMT

Published: Friday, 14 Sep 2012 | 3:43 PM ET Text Size By: CNBC.com With Reuters Twitter 2K LinkedIn 44 Share Ratings firm Egan-Jones cut its credit rating on the U.S. government to "AA-" from "AA," citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country's credit quality. Getty Images<br... [ More ]

Original Blog Entry: Obamanomics Has Failed Dismally and Bernanke Can't Save It

CajunWin4 — Sat, 15 Sep 2012 04:19:48 GMT

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Friday, 14 Sep 2012 07:58 PM

By Larry Kudlow

About 30 years ago, Paul Volcker launched a monumental monetary effort to bring down inflation. As Fed chairman, he sold bonds, removed cash from the economy, and cared not one whit about rising interest rates. And it worked. Gold plunged, King Dollar soared, and the drop-off in bank reserves and money extinguished high inflation and actually launched a multi-decade period of very low inflation.

This week, current Fed Chairman Ben Bernanke embarked on an absolute reversal of Volcker s policy. He is launching a monumental effort to buy bonds and inject new money into the economy in order to reignite economic growth and job creation. It s like history is repeating itself, but in reverse. Gold is soaring, the dollar is falling. Something s wrong with this picture.

Bernanke s QE3 is an unlimited Fed effort to buy mortgage bonds with new cash. The plan which starts immediately envisions $40 billion of bond purchases and money-creation per month, coming to $480 billion over the next year. And there are no limits to these purchases. These operations are open-ended. This could last for years maybe in perpetuity until job creation shoots way up and unemployment comes way down.

Nothing like this has ever been used by our nation s central bank. The Fed s balance sheet, which has ballooned from around $800 billion to $2.5 trillion under Bernanke, will go to $3 trillion, or $4 trillion, or who knows how high.

But here s the rub: More money doesn t necessarily mean more growth. More Fed money won t increase after-tax rewards for risk, entrepreneurship, business hiring, and hard work. Keeping more of what you earn after-tax is the true spark of economic growth. Not the Fed.

In the supply-side model, the combination of lower marginal tax rates, lighter regulation, and a downsized government in relation to the economy is the growth-igniter. Money, on the other hand, determines the value of the dollar exchange rate and subsequently the overall inflation rate. A falling dollar (1970s) generates higher inflation, a rising dollar (1980s and beyond) generates lower inflation.

This is the supply-side model as advanced by Nobelist Robert Mundell and his colleague Arthur Laffer. In summary, easier taxes and tighter money are the optimal growth solution. But what we have now are higher taxes and easier money. A bad combination.

The Fed has created all this money in the last couple of years. But it hasn t worked: $1.6 trillion of excess bank reserves are still sitting idle at the Fed. No use. No risk. Virtually no loans. And the Fed is enabling massive deficit spending by the White House and Treasury.

Now, one key political point is that Bernanke s desperate money-pumping plan to rescue the economy is a very blunt admission that Obamanomics has completely failed. The president is asking voters to give him more time, which is a very weak argument. But his Fed chairman is essentially saying we are running out of time and have to embark on this massive monetary action. Mitt Romney should use the Bernanke argument, but not the Fed solution.

Some argue that Bernanke so desperately wants a victorious Obama to reappoint him, that he s printing money and driving up stock prices on the eve of the election. I prefer not to believe this cynical interpretation. As an old ex-Fed staffer, I would argue that it s not a political agency. Although I have to admit, on the eve of the election, the question is going to be asked.

More to the point, the Achilles heel of the Bernanke plan is the collapse of King Dollar, the result of printing so many new ones for so long. That, in turn, will drive up commodity prices, especially energy and food, and will do great damage to the middle class, which is already suffering from income declines and rising living standards.

This is what happened in 2011, when QE2 did more harm than good to the economy. Middle-class savers and retirees will also get their heads handed to them because of rock-bottom interest rates. And bank lenders may withhold credit since the difference between short and longer rates is so narrow there s no incentive to make loans.

So at the end of the day, Obama s economic program of tax, spend, and regulate has been a dismal failure. And now his Fed chairman is acting dramatically to bail him out. Guess what? It won t work.

To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com. Creators Syndicate Inc.

Read more on Newsmax.com: Obamanomics Has Failed Dismally and Bernanke Can t Save It Important: Do You Support Pres. Obama's Re-Election? Vote Here Now!

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