Tim Cavanaugh Talks Bernanke's Wizardry With Jerry Doyle, 2:30PM Pacific

Reason Senior Editor Tim Cavanaugh will appear on the Jerry Doyle radio show at 2:30 PM Pacific Time today (5:30 PM Eastern).

Topic: Why is deflation the thing that cannot be said? Why don't more people know about the Federal Reserve's "interest on reserves" policy? Why does the economy get worse as Ben Bernanke's monetary tools get better? Whose version of Great Depression history was more accurate: Bernanke's or Milton Friedman's?

Inflationists, deflationists, monetarists, goldbugs, Keynesians, Friedmanites, Austrians, freshwaterists, saltwaterists, Grid Epsilon Irregulars and others are urged to listen in. 

Jerry Doyle's show is on 230 radio stations around the country. To find a local station, click here.

To listen live, click here.

For archives, click here.

Comments

[Ken Shultz]

Isn't that the guy from Babylon 5?

[sarcasmic]

Yes it is. When he was in the hospital Dwight Schultz (aka 'Howling Mad' Murdock of the A-Team) filled in for him.

So not everyone in Hollywood is a lunatic lib.

[Mnemone Jones]

Bab 5 and Start Trek cast members, colluding...

What is this world coming to?

[Au H20]

I want to know why he's soft on Centari's! Londo should have been thrown in jail on multiple occasions!

[Mr. FIFY]

Unrelated, but it looks like Ed Schultz used some underhanded Breitbart-style editing to make Boortz sound like a racist.

I hope Neal sues his ass into oblivion.

[shrike]

Put both those blowhard liars in sumo gear and have them wrestle til death.

I'm in for $500.

[Mr. FIFY]

Boortz is an infinitely better human than that socialist cunt Schultz.

[R C Dean]

Is that the kind of editing where you release the full, unedited tape?

[Andrew Bratbitch]

What is an unedited tape?

[R C Dean]

They look like this:

http://tv.breitbart.com/full-u.....of-minors/

[Mr Whipple]

Inflationists, deflationists, monetarists, goldbugs, Keynesians, Friedmanites, Austrians, freshwaterists, saltwaterists, Grid Epsilon Irregulars and others are urged to listen in.

Parecons. You forgot parecons!!!!

[Rich]

Why don't more people know about the Federal Reserve's "interest on reserves" policy?

I don't know; but here's an explanation of the policy from the Fed itself: "What's most critical for the implementation of monetary policy is that interest will be paid on the excess balances depository institutions hold, i.e., the amount above the quantity of balances needed to satisfy their reserve requirements (which will also be remunerated), and their clearing balances (which will continue to earn implicit interest in the form of earnings credits). ... With the payment of interest on excess balances, market participants will have little incentive for arranging federal funds transactions at rates below the rate paid on excess. By helping set a floor on market rates in this way, payment of interest on excess balances will enhance the Desk's ability to keep the federal funds rate around the target for the federal funds rate."

Got it?

[shrike]

You see, in a goldbug/Paultard world if you don't get the answer you wanted you just keep asking the question in different ways.

Like the idiot Ron Paul, who wrongly thinks inflation "has worshed away 97% of the dollar value" like some hick on O Brother Where Art Thou? - the concept of deflation cannot be fathomed. In his gold-douchebaggery, he cannot fathom declining asset values. If you just sprinkle some majik sound money nonsense around everyone will feel better.

Unfortunately, Cavanaugh has been dipped into the same baptismal river as Elmer Ron Paul and no George Clooney rationalist can say a thing to these true believers.

[Tim Cavanaugh]

When you put in such cogent and well-supported terms, the wisdom of your argument becomes clear.

[shrike]

See below.

I want to know how QE/Bernanke has hurt the economy.

[Mr. FIFY]

You are such a prick, shrike.

[shrike]

Why does the economy get worse as Ben Bernanke's monetary tools get better?

Lets see, since QE began --

GDP is up 600 basis points.
Dollar is stronger.
15 months of trailing job gains.
Exports are up.
Crude oil is 40% lower.
S&P 500 is up significantly.

But goldarnit! Elmer Ron Paul says they inflatin' my ass away!

[Mnemone Jones]

Er, I just read yesterday that the dollar was weakening again.

[shrike]

The USD does fluctuate, no doubt.

I use the DXY to track its value - like most do. The DXY spiked during the meltdown but has reverted back to its pre-crisis mean.

Its 75 now - in spring 2008 it was low 71. In the mid-aughts it was 100ish.

[JoshInHB]

I do believe that 75 is lower than 100ish.

Although I admit to not doing CB math very well.

[R C Dean]

QE began in late November 2008.

January 1, 2009, GDP is up all of 2.1%, not 6%. 4Q 2008 was negative, so I'm doing shrike a favor. Even so, he overstates GDP growth by nearly 300%.

2.1%, total, over 2.5 years is not exactly stellar, even with a recession in the middle.

On December 1, 2008, oil was around $50/barrel. So call it nearly 100% higher, not 40% lower.

On December 1, 2008, the USDX was around 82.50. Today, it is trading 75 - a 9% drop.

Dunno where you get your numbers, shrike, but they seem to be pretty, umm, wrong.

On December 1, the S&P closed at 816. Today, it closed at 1278 - roughly a 50% runup.

Gold, of course, is up around 100% since December 1, 2008.

[R C Dean]

Long term USDX chart here:

http://futures.tradingcharts.com/chart/US/M

How anyone can say that 75 is some kind of mean is a complete mystery to me. Near its all-time low seems a little more accurate.

[Tim Cavanaugh]

Thanks for doing this so I don't have to.

I guess our Little Buddy says "600 basis points" so it will sound more impressive than "six percent over three years." But why not just say "eleventy-million percent in only 30 days"? You're making up the facts anyway; why not live a little?

[R C Dean]

He's cherry-picking his dates.

On GDP, he conveniently leaves out the contraction that continued after QE began to get a bigger number.

On oil, he goes back to before QE began.

Whatever, dude.

[shrike]

Again I ask "How has Bernanke/QE harmed the economy?"

So far I only get squabbling about recovery points in the economy since all the indicators I have listed are POSITIVE.

[Greg F]

So far I only get squabbling about recovery points in the economy since all the indicators I have listed are POSITIVE.

Somebody else that doesn't understand that money is not wealth. Money is like a tape measure. It's a tool we use to measure wealth, it isn't the wealth. When you print money you have not changed the wealth any more than you can make something bigger by shortening the length of an inch.

[Mr. FIFY]

shrike is a Keynes-worshiper. No use trying to talk sense with him.

[shrike]

OK Dean, I will be courteous I hope.

You don't know when QE began because the Fed bought Bear Stearns debt in early 2008 in an attempt to tornaquet (Sp?) the bleeding.

And GDP was -6 at the worst - and Obama/Stimulus it was positive after Q2 2009.

Oil at the nadir was actually less than $50 - but the Bush Depression crushed demand!

I know only you and I will care - but those are facts.

[R C Dean]

I gave data points that were at the beginning of QE, with QE as defined by the fed. That strikes me as the best way to evaluate "since QE began."

You give data points from across a pretty good spread of time (over a year - from early 2008 to mid 2009), with QE defined as something other than what the Fed calls it.

Thanks, but I prefer my facts. They aren't so, conveniently selected, as yours.

[shrike]

Yes, 2008 was a fuzzy data year. Finding the start point of Fed accommodation is like trying to call DiMaggio's batting average in an 0-24 slump.

According to the Bloomberg FOIA data release last month the Fed actually pumped $6-7 trillion in temporary liquidity into a broken credit system in 2008 - and make us a profit, btw.

Bernanke deserves his T-MOY award and Elmer Ron Paul needs to stick to OB/GYN and politickin.

[William R]

QE2 is a bust and only a blithering idiot would say otherwise.

http://www.foxbusiness.com/per.....-bernanke/

[JoshInHB]

So 1.8t in QE netted 840b in higher gdp over 24 months. And you don't see any problem with that?

If so, why not 20t of QE and funnel it directly to citizens instead of WS.

[shrike]

For any Paultards - a link from his fansite on his big Monetary Policy - Federal Reserve showdown June 1, 2011.

http://www.dailypaul.com/16640.....-6-1-200pm

Ron Paul - the new chair - is a bumbling, fumbling idiot in front of the Federal Reserve.

Its embarrassing.

[William R]

The only embarrassing thing I see is your sorry ass.

Here is Ron Paul's monetary policy.

http://mises.org/daily/3204

[Ken Shultz]

If the economy is in the same shape come 2012 that it's in right now?

I hope Obama runs on how well the economy is doing...

You can blow all the hot air you want? But voters don't need a weatherman to know when it's raining outside.

Most of them anyway. Some people only see what they want to see--and you Shrike? Just might be one of those people.

[Anon1]

The listen live link goes to a list of previous broadcasts. What gives?

[Tim Cavanaugh]

Thanks for pointing this out. Next time I do the show, I'll swap that listen live link for a participating station that has a non-subscription live feed. Folks, please give it up for KEXO Talk in the Best Place to Live West of the Rockies, Grand Junction, Colorado!!!

[shrike]

I tried too, btw.

[Anon1]

Problem solved! Thank you.

[The Bearded Hobbit]

Grand Junction, Colorado

I had an extended stay in Grand Junction (including a visit to their ER) and I can go on record as saying it is a very nice small town.

... Hobbit

[jesusbananas]

Because someone had to say it... "Meester Garibaldi!"

[Ken Shultz]

He had a framed picture of Daffy Duck in his quarters!

It wasn't Farscape, but it was way better than Star Trek.

[Nike Dunk High Women]

thanks

[han]

Inflationists, deflationists, monetarists, goldbugs, Keynesians, Friedmanites, Austrians, freshwaterists, saltwaterists, Grid Epsilon Irregulars and others are urged to listen in.