Yellen warns proposed law on Fed would damage US economy

[PufPuf23]

Source: AFP/MSN

Janet Yellen warned Tuesday that a proposed law in Congress to more closely oversee the Federal Reserve would politicize monetary policy and do deep harm to the US economy.

The "Fed Oversight Reform and Modernization Act" would tie the hands of Fed policy-makers to a formulaic rule that, if in place during the last six years, would have greatly worsened the impact of the economic crisis, Yellen said in a letter to House Speaker Paul Ryan and House Democratic leader Nancy Pelosi.

"This legislation would severely damage the US economy were it to become law," she wrote.

It would also "likely lead to... a diminished status of the dollar in global financial markets, and reduced economic and financial stability."

Setting up an economic rule to guide Fed monetary policy, as the FORM Act proposed, "would essentially repeal the Federal Reserve's remaining ability to act in a crisis."


Read more: http://www.msn.com/en-us/money/markets/yellen-warns-proposed-law-on-fed-would-damage-us-economy/ar-BBn80gN?li=BBgzzfc&OCID=DELLDHP

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Yellen is correct. Bad proposed legislation that plays well politically.

[bluestateguy]

1. I support auditing the Fed

The Fed is a little too independent for my taste.

[PufPuf23]

2. The proposed bill is GOP.

I would not argue that some change is warranted but not change that handcuffs or politicizes the Fed.

The bill was introduced by GOP and has 20 co-sponsors, all GOP.

Here is more information:

https://www.govtrack.us/congress/bills/114/hr3189

[BootinUp]

5. My instinct is to reject repuke proposals

If there are things that need to be improved with regard to the Fed I need to hear arguments from reputable people.

[Plucketeer]

3. Hmmmmmmmmmmmm.....

I'm trying to recollect Yellen's resume. It'll come to me soon enough. Bank on it!

One thing you CAN bet on is Janet being invited to stay on as a member of a Clinton administration. She's PERFECT for the job in SO MANY WAYS!

[PufPuf23]

4. Yellen was on the Council of Economic Advisors under Clinton

From wiki:

Janet Louise Yellen (born August 13, 1946) is an American economist. She is the Chair of the Board of Governors of the Federal Reserve System, previously serving as Vice Chair from 2010 to 2014.

Previously, she was President and Chief Executive Officer of the Federal Reserve Bank of San Francisco; Chair of the White House Council of Economic Advisers under President Bill Clinton; and Professor Emerita at the University of California, Berkeley, Haas School of Business. On January 6, 2014, the United States Senate confirmed Yellen's nomination to be Chair of the Federal Reserve Board of Governors.[1] Yellen was sworn in on February 3, 2014, making her the first woman to hold the position.[2]

https://en.wikipedia.org/wiki/Janet_Yellen

When I was a grad student at Cal she was on my masters committee and I took a course in Macroeconomics from her. This was back in mid 1980s.

That said, I was not that impressed with her as a student and was against her political appointments but she is correct IMHO in this case.

There have been alternative bills to reform the Fed. It is beyond me to recommend the best approach.

edit to add link

I would like to hear what Stiglitz, Krugman, Reich, and Warren have to say.

[Cal33]

16. "I would like to hear what Stiglitz, Krugman, Reich, and Warren have to say." Right. Me, too.

[PufPuf23]

17. I searched for their (SKRW) comments on this specific piece of proposed legislation and found none.

The response of some DUers to the OP sort of surprises me but maybe not.

I seldom make an OP but thought this was of importance and not being noticed because of all the current brouhaha.

This is GOP legislation with apparently zero Democratic support.

[mathematic]

8. A woman that's spent her life in acedemia and government deserves your sarcasm why?

No, really.

Here's what it looks like to me: for some (no doubt low information) reason you've assumed that Yellen is a transplant from the private sector or wall street or something like that. At long last, have you no wikipedia?

[Plucketeer]

9. In the simplest of terms

I want to see folks recruited to these positions who are further removed from the government mire than Ms. Yellen is. People - seemingly qualified people - get closer and closer to the honey pot known as DC. Once they get some on their fingers, they're drawn in until they're gooed up to the point of no return.

[geek tragedy]

10. You want someone with zero experience in banking to regulate the banks and run

the national bank?

[Plucketeer]

13. OF course!

YEAH - that's right, Eye-cue. I'm advocating we enlist an apprentice plumber, or Jose the yard maintenance guy. But let's not seem sexist about it - there's also Doris that serves coffee at the corner greasy spoon - Linda the launder-lady - or Jenny the meter maid (who may well be the best for the job - given that she handles all that money every day.

Yeah doggonit! You've revealed me for the RUBE I really am.

[LanternWaste]

15. I'm trying to understand the relevance of your premise in regards to the policy change

I'm trying to understand the relevance of your premise in regards to the policy change being debated.

Unless of course (and I find this a wee bit more likely), it's simply not relevant at all, but is however, a juicy little opportunity for some grade-school level petulance masquerading as...?

[jtuck004]

6. In other words, bad for the bank$ter/donors. Because what has been good for them has been shit

for tens of millions of working, and formerly working, people in this country.

On the other hand lying bastards and their political lap dogs tell those in servitude to them how correct it all was, and is.

It hasn't been, and it isn't now.

[geek tragedy]

11. So you support the Republican bill? nt

[Demeter]

7. Anything that damages the Fed will be GOOD for the Economy

"No matter how cynical you become, it's never enough to keep up." - Lily Tomlin

[Rex]

12. Republicans are for a bill with the words 'oversight' and 'reform' in it?

What fucking planet is this? I must have woke up on the wrong one again. Buuuullllshhhittt...what did they hide in it?

[Darb]

14. It's teabagger paranoia, plain and simple.

They are wrong about everything and they rare wrong about this. Should the big banks be reigned in, or even broken up, yeah, maybe, probably wouldn't hurt. Should we hamstring the FED because the paranoid baggers think we should, HELL TO THE NO.