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Common Sense: A Hint by Obama Limits Bernanke’s Sway Over Markets

June 28, 2013 by Leave a Comment

“He’s already stayed a lot longer than he wanted or he was supposed to,” President Obama told Charlie Rose in an interview that was broadcast on June 17 on Bloomberg TV, all but confirming that he wouldn’t reappoint Mr. Bernanke when his term expires at the end of this year.

The best the president could muster was that Mr. Bernanke was an “outstanding partner along with the White House” in warding off “what could have been an economic crisis of epic proportions.”

A White House spokesman said Mr. Obama meant that as praise, but supporters of the chairman, and even many who have disagreed with him on policy issues, were quick to question both the timing and substance of the comment.

Not only did the comment come across as faint praise for a long-serving public servant who guided the nation’s monetary policy through a severe crisis, but its timing could also hardly have been worse. Mr. Bernanke was in the midst of important Federal Open Market Committee meetings and that very week began the delicate task of communicating the Fed’s plans to “taper” its latest round of quantitative easing. Markets went into convulsions and interest rates shot up. While no one blames Mr. Obama for that, adding another element of uncertainty about Fed policy may have contributed to the volatility.

Others were critical of the president’s choice of the word “partner” to describe the Fed chairman’s role, since the Federal Reserve is an independent agency overseen by Congress. “Any Fed chairman would bristle at the idea they were a partner with a president,” Senator Bob Corker, the Tennessee Republican who serves on the Senate Banking subcommittee on financial institutions and consumer protection, told me this week. “I can understand why people who want to protect the independence of the Fed would be concerned.”

Others pointed out that the Fed has taken the lead in efforts to stimulate the economy as Congress has blocked the White House from further stimulus measures, and thus “partner” overstates the White House’s role in the recovery.

By contrast, although history hasn’t been kind to the legacy of Mr. Bernanke’s predecessor, Alan Greenspan, he received a send-off commensurate with his record five terms of service. The Fed itself announced Mr. Greenspan’s decision to retire, and in late October 2005, President George W. Bush announced his choice of Mr. Bernanke at a White House news conference where he lavished praise on the departing chairman as a “legend” who had “dominated his age like no central banker in history” while Mr. Greenspan looked on. On the same occasion, Mr. Bernanke said Mr. Greenspan “set the standard for excellence in economic policy making.”

With many economists and investors fixated for months on the question of when and how quickly the Fed would curtail its extraordinary efforts to stimulate the economy, Mr. Bernanke’s suggestion, just two days after the president’s comments, that the Fed might taper its bond-buying earlier than expected sent markets reeling. Stocks fell across the globe and interest rates rose, with 10-year Treasuries hitting their highest yields since 2011. The volatility index, which was already rising the week before the president’s remarks, leapt to a new high for the year.

Mr. Obama “instantly made Ben a lame duck before the end of his term,” said one economist, who may be a future candidate for Mr. Bernanke’s position and, like many people I interviewed, asked not to be named. “He undermined his credibility both inside the Fed and in financial markets.” While Mr. Bernanke tried to reassure markets that the Fed would monitor the economy and respond as appropriate, this person said, “Part of the negative reaction in asset prices was because market participants have confidence in Ben, but now he won’t be around to oversee that.”

People close to Mr. Bernanke told me that the chairman took the president’s comments in stride, but said he was concerned about the severe market reaction. “He wouldn’t want to feed stories about this when he’s trying to articulate a complex message about monetary policy,” one adviser said.

The people close to the chairman said he had already told the president he wanted to leave at the end of his term. He is expected to return to teaching and research at Princeton, where he’s on an extended leave, and where he delivered this year’s baccalaureate address. He quipped in the speech that his remarks “have nothing whatsoever to do with interest rates” and observed that life is unpredictable.

This article has been revised to reflect the following correction:

Correction: June 28, 2013

An earlier version of this column misstated the occasion of Mr. Bernanke’s speech at Princeton. It was the baccalaureate service, not the commencement.

Article source: http://www.nytimes.com/2013/06/29/business/unexpected-distraction-makes-bernankes-job-harder.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Economix Blog: Continuity on Obama’s Economic Team

January 9, 2013 by Leave a Comment

After President Obama took office in 2009, Jacob J. Lew became a deputy secretary of state within days. Gene Sperling was serving as an adviser to the Treasury secretary. Austan Goolsbee, a longtime Obama adviser, was serving on Mr. Obama’s Council of Economic Advisers. Alan B. Krueger would become an assistant secretary of the Treasury within a few months.

In the last four years, all of these men have gone on to higher jobs within the Obama administration, and Mr. Lew is expected to be named Treasury secretary soon. Mr. Sperling is the top economic adviser inside the West Wing, while Mr. Krueger is the chairman of the Council of Economic Advisers. Mr. Goolsbee preceded him at the council before returning to the University of Chicago.

As a picture on Wednesday’s front page of The New York Times makes clear, Mr. Obama’s economic team is made up almost entirely of people who have been with the administration from the very beginning. This approach has benefits, especially because many of the budget battles of the second term will be extensions of the battles of the first.

“We’ve got a weird negotiation — let’s call it a multiyear negotiation,” Mr. Goolsbee said this week on the Charlie Rose show. In 2011, the Obama administration and Congressional Republicans agreed to spending cuts with no new tax revenue, Mr. Goolsbee noted. Last month, the two sides agreed to new tax revenue with no spending cuts. In coming talks, the parties will discuss more of each, with Democrats pushing for more tax revenue and Republicans for more spending cuts.

“After a year and a half of negotiating, we may have a grand bargain; it’s just not a grand bargain they actually struck all at once at the same table,” Mr. Goolsbee added.

But if Mr. Obama’s personnel strategy brings the benefit of consistency, it also has downsides. “Can it really be the case,” Ezra Klein of The Washington Post asked, “that after four very difficult years, there is nothing the White House would gain in its second term by bringing in outsiders with fresh experience, different relationships and a new perspective?”

For more on Mr. Lew, currently the White House chief of staff, see this recent profile by Sheryl Gay Stolberg or this 2010 profile by Jackie Calmes. In May, Annie Lowrey noted that his name seemed logical to include in any list of potential nominees. A 2009 article by Eric Lipton described the significant salary Mr. Lew made while working at Citigroup.

In January, Noah Rosenberg noted that Mr. Lew, who grew up in Queens, continued to live in the Riverdale section of the Bronx. In 1999, when Mr. Lew was the Clinton administration’s budget director, Tim Weiner dug into his New York roots.

Washington Jewish Week profiled Mr. Lew last year, describing him as a “‘regular guy’ who values the importance of friendship.” National Journal described him this way: “Tall and thin, with Harry Potter-like glasses and salt-and-pepper hair, he looks like a typical Washington technocrat, an image that belies his talent for combat.”

The Hill contrasted his speaking style with that of Rahm Emanuel, a former chief of staff. In 2001, The Washington Post noted Mr. Lew’s long history as a budget negotiator, including in the 1980’s debate over Social Security.

Article source: http://economix.blogs.nytimes.com/2013/01/09/continuity-on-obamas-economic-team/?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

At ABC, CBS and NBC News, Accentuating the Differences

January 9, 2012 by Leave a Comment

Influenced by cable and the Internet, the nightly newscasts are shaking up conventions that stretch back 50 years, seeking to distinguish themselves by picking different stories and placing them in different orders.

On any given night, one might lead with the Republican campaign, another with extreme weather and the third with an exclusive interview.

“The three evening newscasts have become more different from one another than at any time I can remember,” said Bill Wheatley, who worked at NBC News for 30 years and now teaches at Columbia.

The differences provide a stark illustration of the state of the news media — much more fragmented than ever, but also arguably more creative.

Viewers these days “make their own choices,” said Ben Sherwood, the president of ABC News. “They pick what matters most to them, and we are trying to be adaptive and responsive to those sweeping changes.”

In the mornings, too, the networks are highlighting their differences. On Monday, CBS, which has been stuck in last place for decades, will introduce a new morning show featuring Charlie Rose that promises more hard news than NBC and ABC and no cooking segments or couch chit-chat.

Steve Capus of NBC, the longest-serving of the three current network news chiefs, called the “different tacks” taken by the networks in the last year a positive development. “What is going to rule the day, in this age, is unique content,” he said.

On some days, the differences at 6:30 p.m. are substantive; on a Thursday in December, CBS led with Iran’s capture of a United States drone surveillance aircraft, NBC opened with an investigation into the mishandling of soldiers’ remains, and ABC with the mysterious shooting of a police officer at Virginia Tech.

On other days, they are stylistic; on Tuesday, as the Iowa caucus commenced, ABC led with a piece on Rick Santorum’s surge, CBS led with a news-making interview of Newt Gingrich, and NBC with a recap of the day’s campaigning.

There are differences in tone, as well. Scott Pelley of CBS evokes anchors of yesteryear while ABC’s Diane Sawyer radiates empathy for her subjects. These are “eye of the beholder” factors, as Brian Williams of NBC put it. “We are different people,” he said, “so naturally we all bring a different ‘voice’ to our on-air writing and our delivery style.”

The main public TV nightly newscast, “PBS NewsHour,” also differs from the three commercial newscasts; it tends to have more coverage about government and international events and much less about crime and disasters, according to the Project for Excellence in Journalism, an arm of the Pew Research Center that studies the nation’s news output.

For decades, there were only “marginal differences” between NBC, ABC and CBS, said Tom Rosenstiel, who directs the project. “When one tried something new that viewers apparently liked, the others would assimilate it.”

Now, instead, they are counterprogramming. The biggest changes are apparent on CBS and ABC, which have long trailed NBC in the news ratings.

ABC’s new push to humanize the news and CBS’s heavily promoted emphasis on hard news may make NBC News the Goldilocks news division — not too hot, not too cold, just right.

Then again, some people have different tastes.

“I think it’s a great sign of the times that everybody’s not in lockstep on the first story every night,” Ms. Sawyer said. Her staff members, she said, start each day by discussing “the questions that we think people at home are going to be asking.”

Some staff members at ABC’s competitors privately criticize “World News” for bending too far toward human interest stories; on Wednesday, for instance, the broadcast talked about the tax code by highlighting a California union’s ad that compares the millionaire Kim Kardashian’s tax bill to that of a middle-class Californian.

Is that hard news or soft? ABC would say that question is outdated.

Article source: http://feeds.nytimes.com/click.phdo?i=18b0e8e54424244d48ce85cf3afdca25

Filed Under: Business News Tagged With: , ,