Sanders blasts Fed over interest rate hike

[Omaha Steve]

Source: The Hill

By Peter Schroeder

Sen. Bernie Sanders (I-Vt.) blasted the Federal Reserve on Wednesday for raising interest rates for the first time since the financial crisis.

The presidential candidate called the Fed's move “bad news for working families,” and argued it needed to be doing more, not less, to boost the economy.

“At a time when real unemployment is nearly 10 percent and youth unemployment is off the charts, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people,” he said in a statement. “The Fed should act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago."

The Fed announced Wednesday that it would raise interest rates by 0.25 percent, its first rate hike since 2006, and the first time rates moved from near zero since the end of 2008.

FULL story at link.


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Read more: http://thehill.com/policy/finance/263479-sanders-blasts-fed-rate-hike

[bluestateguy]

1. We need to be cutting interest rates more, even into negative territory

nt

[VanillaRhapsody]

2. Yeah...that makes perfect sense!!!

[bluestateguy]

3. Yes, thank you.

nt.

[VanillaRhapsody]

5. I mean...

why shouldn't we just pay banks to take loans???

[Omaha Steve]

15. Not everybody blindly disagrees with Bernie

http://a.cpdaction.org/page/s/shame-on-the-fed?source=facebook



For the first time in nearly 10 years, the Federal Reserve has decided to raise interest rates. This decision signals that the Fed thinks the economy has fully recovered and that we need to put the brakes on economic growth.

Over the past year, we've met with the Fed urging them to keep interest rates low until wage growth, especially for communities of color, has picked up. And for a long time they've listened.

Now that the Fed has raised rates, Big Banks and hedge funds will continue to press them to keep going and keep raising interest rates over the next year.

But we're prepared to ramp up our pressure on the Fed by continuing to insert the voices of millions of low-wage workers into the Fed's Decision. Your voices helped stave off an interest rate hike for more than a year and, if we keep up the pressure, make the Fed more responsive to the needs of working families.

Sign our petition now to tell the Fed: Shame on you! Don't leave low-wage workers behind in the economic recovery.

[snooper2]

47. I would venture to say that the vast majority of Americans have no clue on fiscal policy

Let's just keep it at 0 forever, just lock it in and see how that works out

[yeoman6987]

6. Oh brother.

We barely get squat for our money in banks now and you want them to take money every month?

[Yupster]

23. People who have been hurt the most have been older people

who live on their cd interest.

If rates go up a little, that extra money will show up in restaurants and shoe stores, etc.

Rates have been too low for too long. When the economy goes back down, we'll want to cut rates again. Can't do that if they're already at zero.

[DesertFlower]

26. i agree. nt

[Yupster]

29. The problem though is the $ 19 trillion debt

Should interest rates go up 3 %, 3 % of $ 19 trillion is $ 570 billion a year.

We don't happen to have an extra $ 570 billion in the budget right now to pay interest costs.

[brooklynite]

4. Markets are up (+220)...

...good for Union pension plans.

[DirtyHippyBastard]

16. Only 11% of working Americans have union jobs.

[still_one]

31. They are up because yellen issued a very dovish statement that

this increasing the interest rates will not be hurried, and there will be a lot of wait and see invade the need to fall back

Based on Bernies statement in the OP I really question if he even understands the purpose of the fed

[Tote Life]

44. Really?

[DrToast]

7. Sorry Bernie....not with you on this one

1/2 percent is still extremely accomodative. The Fed needs to try to match monetary policy with the business cycle. We've had 0% rates for 7 years.

[joshcryer]

10. I think it could've waited another quarter.

But I know what Yellen is doing. Her party needs to retain power, so she needed to act as sooner rather than later that way if there were problems they can dial it back. The panic over Japanese style deflation is overblown, but what can ya do.

[Agnosticsherbet]

27. Janet Yellen is a Democrat...

Janet Yellen, Democrat.

[joshcryer]

37. Yes, I know.

[jeff47]

14. So?

The length of time really has nothing to do with whether or not they should go up. They should not rise until inflation is in danger of overshooting the target.

Even then, the zero lower bound means they should probably wait even longer than "normal". It's relatively easy to get 2.5% inflation down to 2% via monetary policy. It's nearly impossible to get 0% up to 2% via monetary policy....which is the reason rates have been unchanged for 7 years.

[still_one]

32. Have you seen property values in California and most urban areas?

[jeff47]

46. Yes. Do you understand that inflation is not measured via property values in California?

Both the official inflation numbers and the independent billion price index show that inflation is WAY below the 2% target. The target is what the Fed is supposed to be concerned about. Not "but rates have been low for so long{/i]!!!"

[joshcryer]

8. For those confused, low interest rates are Keynesian.

[OilemFirchen]

17. For those uninformed, interest rates are not a zero-sum game.

Keynes never advocated for no interest.

Do you agree with the poster above, suggesting negative rates?

[joshcryer]

19. No, I don't agree with that poster.

Given that the Congress has no desire to deal with the fiscal side of things the Fed's hands are tied and this is obviously the only move that they can make. The better solution would be for the government to enact stimulus, but the votes aren't there.

My comment about low interest rates and Sanders is a riff on the statement, "We are all Keynesians now."

There's a reason the rates have been so low and I personally don't see a reason not to keep them going for a while longer. But I understand why Yellen is doing it. (In part because we're looking at a seasonal uptick in jobs so it may also buffer the impact.)

[jtuck004]

21. I would like your link to where Keynes said giving preferential interest rates to thieving bank$ters

while screwing over the people with an austerity program that leaves tens of millions in poverty and tens of millions more in a permanent status of working poor for the rest of their, and their children's, lives.

I'm pretty sure he would have tilted the balance the other way. Which is what this pathetic increase does. But it does nothing to invest in the people, so it is mostly only good or bad relative to really wealthy people who make income from the labor of others.

[joshcryer]

22. Yes, because that's exactly what I said.

Your amazing ability to quote my post verbatim is beyond impressive.

So you're saying Sanders is wrong?

Keynes wrote an entire book on interest rates. You might want to look it up.

[jtuck004]

24. I don't question his book, or what I have read. I question what you wrote, and wondered

if there was anything else except your opinion (which, based on my cursory examination of your postings it seems you value above that of anyone or anything else) to back that assertion up.

Yes, I think President Sanders is our only hope, and keeping it low helps mostly the very wealthy. Opposing it being raised helps the opponents of economic equality. Needs to be equalized and tens of trillions invested in the people and the country, and we need conversations about how we can go forward in an economy where we don't have half a world to blow up and profit from rebuilding.

"The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true."
http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?_r=0

That's just one, but there are years of this shit.

It's nothing but status quo, and that isn't working for a growing number of people here . More like being showered with greasy, wormy, fatty scraps.

[joshcryer]

35. So you're saying Sanders wants to "help mostly the very wealthy"?

Keynes was for low interest for recovery. The question is whether you agree we've recovered enough to bring it back up. I'm with Sanders and I do not think we have recovered enough.

BTW, nice barb, but you're really on the wrong side here. I'm not your enemy, though you wish to make me so.

[jtuck004]

39. Thank you. Anyway, that's a mis-interpretation. He didn't say making thieving bank$ters rich by

giving them advantageous interest rates, with which they can screw working people, was a way to grow a nation.

He said the money needed to stimulate demand, not provide profits for people who hoard wealth. Thus it needed to be placed into the hands of the people, via work programs, public infrastructure, or, as it turned out, jobs to blow stuff up or jobs to build and sell the stuff that was made.

Not bonus checks for people who steal homes and take people's assets so they die in poverty.

We may be on the same side, but I think we are holding different signs. That's my fault. I probably wasn't watching where I was going.

[joshcryer]

41. I absolutely agree.

My original quip about Keynesian interest rates was that Sanders was invoking the Keynesian approach. Low interest rates, high stimulus. Wait for recovery and once it settles you can hike it back up again. He wrote an entire book on the subject. And we've been following that path.

The problem is, as Sanders notes, we're hiking without stimulus. It's a plan for disaster. Maybe I'm being overly cynical and they can micromanage the microeconomics. Who knows. We'll see. The terrifying prospect is that if the economy is in the shitter come November the Republican has a good shot to win the thing.

[still_one]

33. During recession, not indefinitely, and he never advocated 0%

[joshcryer]

36. Right, so are you of the opinion we've recovered enough?

Or do you agree with Sanders we still have some recovery to do?

[still_one]

40. Yellen herself said it is a long slow road, and we aren't there yet. I wonder if Bernie even heard

her comments, and the unprecedented press conference she gave. She used the word gradual multiple times, explaining this allows the fed to back off and fall back if needed.

His comments were all over the place based on the OP. He was just throwing random sound bytes

He surprised me regarding his criticism of the quarter of a point increase in the fed funds rate, and his ramblings really make me question if he really understands the purpose of the federal reserve

[joshcryer]

43. It's true that it's a very small hike.

And that the idea of micromanaging the microeconomy is workable.

But Sanders wanted to use the opportunity to express the idea behind low interest when recovering and stimulus.

It may not appeal to a lot of people.

I liked it and I don't think it's controversial. But I tend to be a reductionist and I can read in to what he is doing.

[Zynx]

38. Keynes did not advocate perpetually low interest rates, but rather low interest rates when

the economy is in a period of slack and higher when the economy is growing in order to smooth out the business cycle. The same applies with fiscal policy. He wanted loose policy when the economy was struggling and tight when it was growing. It wasn't that you should just be accomodative all the time.

[joshcryer]

42. I know that.

And I didn't argue that the rate should be perpetually low and neither did Sanders.

[comradebillyboy]

9. Good news for everyone with a pension plan,

401k or other similar investment. I am happy to see the interest rate hike because it is a big benefit to my retirement savings..

[1StrongBlackMan]

28. And good news for those whose ability to eat ...

Depends on policies that put $ in consumers' hands, i.e., retirees, working class folks fortunate enough to be able to save.

[saturnsring]

11. well timing is everything

[Tote Life]

45. Your union made an excellent choice yesterday.

[BadgerKid]

13. Yabut, the Fed sets monetary policy, but the Congress sets fiscal policy.

Right message, wrong tree.

[OilemFirchen]

18. Didn't I just read that Sanders is a "financial genius"?

"... real unemployment is nearly 10 percent...".

No it's not; rather, we're approaching full employment. What "genius" would advocate for a flat economy under such circumstances?

[GOLGO 13]

20. They can always dial it back

If this backfires they'll bring it right back down again.

[Octafish]

25. I'm so old, I remember when all Democrats felt that way.

Now, We the People are supposed to sacrifice so Wall Street can pay bonuses to the banksters who ripped us off to begin with.

[still_one]

30. No offense but I really question Bernies knowledge of economics if he is blasting

Last edited Wed Dec 16, 2015, 11:15 PM - Edit history (1)

the Feds on this

For one thing it was only a quarter of a point. Obviously he didn't listen to the statement from yellen.

it will be extremeluy gradual, and will fall back if the economy has a set back

that he fails to grasp why keeping interest rates at 0% indefinitely is not prudent, really makes me question his financial judgement

Ironically what he fails to grasp is the ones who the 0% interest benefits most are the 1%

[MadDAsHell]

34. I thought we were supposed to pretend the economy is great since there's a D in office?

What is he thinking?