Bernanke announces Transparency Initiatives for the Fed

Federal Reserve Board Chairman Ben Bernanke spoke Wednesday at the National Press Club about the Fed’s lending programs and balance sheet. Bernanke spoke about the tool kit used by the Federal Reserve to battle the economic crisis the country is facing. He said that the tools the Fed had at its disposal were programs that would promote liquidity for both financial institutions and money market mutual funds. He said that transparency of the system was important, for democratic reasons, but also to make sure people working with the market understand the system, to encourage the most effective market activity. With this in mind, the Chairman announced two initiatives that the Federal Reserve would be undertaking, the first of which was establishing a new website to educate and inform the public on relevant financial issues within the federal government. This website would consolidate all of the information previously provided by the Fed into one easily accessible place, and would provide explanations on all of it. Additionally, the Fed is going to review current publication and disclosure policies to ensure the public has access to information they “have a right to know”.

Concerning the President’s economic stimulus plan, Bernanke said that he cannot talk about specific components and apportionments, because those are up to the administration and legislators. He did say, however, that there were two necessary parts to recovery: financial stimulus to get the economy moving, and a stabilization of the financial systems. Several times he emphasized the importance of these two components, saying that the other programs will not work without these two pillars. The efforts to get the economy moving again will also specifically help small business, said Bernanke. He went on to say that the country should maintain a level of inflation that finds a balance between maximum employment and price stability over time. He saw very little risk of “unacceptably high” inflation in the short term.

By Michael Ruhl, University of New Mexico – Talk Radio News Service

Judd Gregg: “I made a mistake”

On Thursday afternoon the baseball hit the batter as yet another Department Secretary took flight from the Obama administration. Soon-to-be Secretary of Commerce Judd Gregg, Republican Senator from New Hampshire, withdrew his name from consideration for the Cabinet position 10 days after having been nominated. This is President Obama’s second Commerce Secretary to go down in flames, following New Mexico Governor Bill Richardson’s withdrawal.

In a statement before the press conference, Gregg cited “irreconcilable differences” with the Obama administration in the Economic Recovery Plan and Census handling as the primary reasons for his withdrawal. At his press conference, however, Senator Gregg stated that the position was simply a “bridge too far” for him, and that the Census issue was only “a slight catalyzing issue; it was not a major issue”. Gregg would not elaborate further on the Census issue, and dodged any questions which would shed more light on it.

The Obama Administration has expressed downright confusion as this withdrawal, claiming that they were approached by Gregg, but the Senator himself has a completely different story. He said, “One of the nice things about this business is that everyone has a different recollection of what happened.” Gregg claimed that the Obama administration approached him for the position, and that he “made a mistake” by accepting the position hastily. He continued that holding a Cabinet position would interfere with how he really wants to approach issues. Gregg said that his confidence in President Obama’s Administration caused him to accept the position “without thinking through the implications” of his decision. (01:20)

By Michael Ruhl, University of New Mexico – Talk Radio News Service

Pelosi content with stimulus package

Speaker of the House Nancy Pelosi expresses contentment at the pace at which the Economic Recovery Package was passed. She referred to the vote to pass this bill as "historic".

By Michael Ruhl, University of New Mexico - Talk Radio News Service

Nancy Pelosi: Recovery package is “transformational”

While at a press conference in the Capitol today, Speaker of the House Nancy Pelosi (D-Calif) said that she was very proud of the Economic Recovery Package, calling it “transformational”. Speaker Pelosi stated that all of the votes in Congress are important, but some are historic; She said that this specific vote was historic. Speaker Pelosi stated that she would have liked for the bill to have more Republican support, and would not comment on the number of votes she expects to see for the package in either chamber. When asked if she was worried about future legislative endeavors after the narrow margin by which the bill passed in the Senate, Speaker Pelosi pleaded no contest, simply stating that the bill did pass in the Senate.

By Michael Ruhl, University of New Mexico - Talk Radio News Service

Executives try to keep egg off their faces

On Wednesday the heads of several of the largest lending institutions in the United States were called to testify before the House Financial Services Committee. All of the individuals testifying represented lending institutions which received financial assistance from the federal government several months ago under the Troubled Assets Relief Program (TARP). Committee members inquired about the use of the TARP money thus far.

Committee Chairman Barney Frank (D-Mass) said that the aim of the hearing was to adopt rules to make sure this situation did not happen again in the future, while restoring the system of extending credit in the United States. Frank said that although the hearing would focus on what transpired in getting the country into this situation, his committee would be “looking forward” at what progress can be made. Congressman Paul Kanjorski (D-Penn)said that when these lending institutions took taxpayer money, they “moved into a fishbowl”, and that all eyes are justifiably on how they use the money. Recent public outrage at the seeming misuse of taxpayer money in the form of executive compensation (anger which Chairman Frank called “justifiable”) has left many asking what role the federal government should play in overseeing the use of these funds to make sure that the taxpayer money is being used wisely.

Lloyd Blankfein of Goldman Sachs said that the TARP bill was important to maintaining the overall stability of the financial system. Most of the executives testifying said that their institutions are still lending, but after and extended amount of inquiry from committee members, it is uncertain if the TARP money has actually encouraged these institutions to lend more than they have in the recent and distant past, respectively. Jamie Dimon of JP Morgan Chase & Co. said that his company is committed to helping homeowners avoid foreclosure and stay in their homes. Vikram of Citi said that taxpayers have a right to expect a return on their investments, and said that he personally has volunteered to have his salary set at one dollar per year until the company returns to a profitable state. Chairman Frank asked the members of the lending community to withhold any new foreclosures until Treasury Secretary Tim Geichner’s program could be put into place, but at present it is uncertain whether than will happen.

By Michael Ruhl, University of New Mexico - Talk Radio News Service