March 29, 2024

Fed Chairman Reaffirms Economic Plan

Mr. Bernanke said that the Fed expected the economy to gain strength in the coming months, potentially allowing the Fed to decelerate its stimulus campaign not because it has changed its goals but because it has begun to achieve them.

But he warned that Congress itself remains the greatest obstacle to faster growth. Federal spending cuts are reducing growth this year by about 1.5 percentage points, he said. While the Fed expects the impact to diminish next year, he said there was a risk Congress would create new problems for the economy.

“The risks remain that tight federal fiscal policy will restrain economic growth over the next few quarters by more than we currently expect, or that the debate concerning other fiscal policy issues, such as the status of the debt ceiling, will evolve in a way that could hamper the recovery,” Mr. Bernanke said during a biannual appearance before the House Financial Services Committee.

Wednesday may have marked the last time that Mr. Bernanke will appear before the committee to report on the Fed’s conduct of monetary policy. He will conclude his second term as chairman at the end of January and is widely expected to step down. Members of both parties took the opportunity to praise him, although Republicans generally added that they opposed the Fed’s recent efforts.

“You acted boldly and decisively and creatively – very creatively, I might add,” said the committee’s chairman, Texas Republican Jeb Hensarling.

“You have never been boring,” said New York Democrat Carolyn Maloney.

Mr. Bernanke then did his very best to be boring, sending the message to markets that had been roiled by his comments last month that it was much ado about nothing.

The shabby condition of the economy has become the constant background for Mr. Bernanke’s public appearances. Unemployment remains stubbornly common, inflation has sagged to the lowest pace on record and growth is tepid.

Mr. Bernanke’s message Wednesday was that the Fed will begin to decelerate only if those problems continue to diminish. If unemployment stays high, the Fed will keep buying bonds. If inflation stays low, the Fed will keep buying bonds. If growth weakens, the Fed will keep buying bonds. Indeed, he revived a talking point from earlier this year in insisting that the Fed was willing to increase the volume of its monthly purchases if it decided that more stimulus was necessary.

“Because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Mr. Bernanke told the committee.

Mr. Bernanke has adopted a stronger tone in particular on the subject of inflation. Fed officials insisted for much of the year that they were not concerned about the sagging pace of inflation, which has fallen to the lowest pace on record. Prices increased by just 1 percent during the 12 months that ended in May, well below the 2 percent pace that the Fed considers most healthy. In recent weeks, the Fed has shifted its tone, emphasizing that it wants prices to rise more quickly.

On Wednesday Mr. Bernanke put inflation alongside unemployment as the reasons for the Fed’s commitment to its stimulus campaign: “Our intention is to keep monetary policy highly accommodative for the foreseeable future,” he said, “because inflation is below our target and unemployment is quite high.”

The central bank says it plans to hold short-term interest rates near zero at least as long as the unemployment rate remains above 6.5 percent. It also is expanding its holdings of mortgage-backed and Treasury securities by $85 billion a month in an effort to accelerate the pace of employment growth.

Article source: http://www.nytimes.com/2013/07/18/business/economy/fed-chairman-points-finger-at-congress.html?partner=rss&emc=rss

Economix Blog: Four Years Later, 28,000 More Jobs

For jobs, the past four years have been a wash.

FLOYD NORRIS

FLOYD NORRIS

Notions on high and low finance.

The December jobs figures out today indicate that there were 725,000 more jobs in the private sector than at the end of 2008 — and 697,000 fewer government jobs. That works into a private-sector gain of 0.6 percent, and a government sector decline of 3.1 percent.

In total, the number of people with jobs is up by 28,000, or 0.02 percent.

How does that compare? It is by far the largest four-year decline in government employment since the 1944-48 term. That decline was caused by the end of World War II; this one was caused largely by budget limitations. The only other post-1948 four-year drop was during Ronald Reagan’s first term, when government employment fell 0.6 percent.

Going back to Dwight Eisenhower, there have been only two administrations that turned in a worse performance in private-sector job growth. There were small declines in Eisenhower’s first term and in George W. Bush’s first term. Mr. Bush’s second term posted a scant 1.1 percent gain in private-sector employment — a gain that was wiped out during the first two months of 2009.

Over all, Mr. Obama’s first four years narrowly — and preliminarily — escaped being the second four-year presidential term since World War II to suffer net job losses. The first was George W. Bush’s first term.

The New York Times


A note on methodology. A month from now the Bureau of Labor Statistics will announce the final benchmark revision for the 12 months through March 2012. The preliminary estimate for that revision was that the economy gained 453,000 more private-sector jobs during the period than was previously reported, and lost 67,000 more government jobs. The calculations in this post incorporate those estimates.

The December figure will of course be revised for the next two months, and then will get a final revision in February 2014. Only then will it be clear whether the past four years had a net gain or loss in jobs.

Article source: http://economix.blogs.nytimes.com/2013/01/04/four-years-later-28000-more-jobs/?partner=rss&emc=rss

Daniel Ortega Extends Control to Nicaragua’s Airwaves

Video of flag-waving Ortega supporters flooding the streets and shooting off homemade explosives filled screens. One television anchor called the election a “resounding victory” as festivities were underscored by the governing party’s rewrite of the song “Stand by Me,” despite Sony’s demand that it be pulled for copyright infringement. “Nicaragua is free and just wants jobs and peace,” so the chorus goes.

The jubilant imagery reflected one of Mr. Ortega’s biggest accomplishments in the five years since he returned to power: his tightened grip on the news media.

He has bolstered investment in traditional Sandinista Party outlets like the television station Multinoticias and Radio Ya, while cutting government advertising in non-Sandinista outlets. The former revolutionary now controls nearly half of Nicaraguan TV news stations; his children run Multinoticias and Channels 8 and 13, and Channel 6 is state-run. He has also started two news Web sites.

Political analysts say that the media power has given Mr. Ortega a tool to discredit critics, and that the positive exposure helped him finish with 63 percent of the vote, according to official returns, up from his plurality of 38 percent in 2006.

“There was a fundamental shift in Ortega’s image over five years, and one could argue that among contributing factors is his greater presence in the media,” said Arturo Cruz, a political analyst at Managua’s Incae Business School who served as Nicaragua’s ambassador to Washington in Mr. Ortega’s second term.

Mr. Ortega’s allies already run the electoral council (which oversees elections) and dominate the courts, and this month’s vote nearly doubled his party’s seats in Congress to 62, a majority big enough to rewrite the Constitution and change the limits on re-election he has challenged through the judiciary. With the media now one of the last bastions of opposition, said Robert J. Callahan, who left his post as the American ambassador to Nicaragua in July, the Ortega family’s growing influence recalls the way Anastasio Somoza used nepotism to control the economy before Mr. Ortega’s Sandinistas overthrew his dictatorship in 1979.

“Nicaraguans call this Somocismo without Somoza,” Mr. Callahan said, using a term that refers to Somoza’s style of ruling through favoritism.

Mr. Ortega’s chief spokeswoman, who is his wife, Rosario Murillo, did not respond to a request for comment.

Mr. Ortega has said right-wing “oligarchs” still have a stronghold in the media despite his advances. “The forces of savage capitalism have TV stations and a monopoly on newspapers,” he said in a speech in March.

He has had less success gaining control of newspapers, which have a smaller audience than TV and radio, especially among the half of Nicaragua’s population that lives in poverty and those who struggle with illiteracy.

That is not for a lack of trying. Mr. Ortega’s wife tried buying shares in El Nuevo Diario, one of the biggest newspapers in the country, after the government cut publicity that accounted for a quarter of the paper’s advertising revenue. Negotiations fell through when another buyer entered the fray.

Many suspect that Venezuelan aid is behind the Sandinista media conquest. The manager of Albanisa, a joint energy venture between the Nicaraguan and Venezuelan state oil companies, was sent back to Venezuela after he told reporters that the company had bought Channel 8 last year for $10 million. The company denied the comments.

Tracing the Venezuelan money is difficult because Mr. Ortega has refused to include a five-year, $1.6 billion Venezuelan aid package in the budget, where it would face congressional oversight.

The Ortega outlets cast him in a light that is benign, or at least innocuous.

When Mr. Ortega cast his vote, non-Sandinista reporters were cordoned off, while those for Multinoticias on the scene asked him about the weather.

On Sandinista-favored outlets, the first lady releases poetic communiqués and exclusive reports record debaucheries of Ortega critics. One report showed feminist opponents of an abortion ban sponsored by Mr. Ortega caught driving drunk after a “girls only” beach bash. Headlines describe Mr. Ortega’s political rivals as “parasites” and “promoters of death.”

Non-Sandinista reporters can face threats for their coverage of the government. One journalist, Silvia González, fled the country in September, saying she had received death threats after reporting for El Nuevo Diario that soldiers may have killed a rebel in northern Nicaragua who opposed Mr. Ortega’s re-election.

The Chamorro family, longtime foes of Mr. Ortega, come in for heavy scrutiny in his media.

The Chamorros run El Nuevo Diario and La Prensa, and La Prensa’s former publisher Violeta Chamorro defeated Mr. Ortega in the 1990 presidential race. Mr. Ortega’s government has investigated Ms. Chamorro’s younger son, Carlos Fernando, over money laundering accusations and last year bought the television station that had been broadcasting his newsmagazine, “Esta Semana,” which often investigated accusations of Sandinista corruption.

In seeking another channel to broadcast his show, Mr. Chamorro found that other outlets — including those owned by Ángel González, a Mexican media mogul whose stations are known for gentle treatment of the governing party — would not have him. Eventually, Channel 12 picked up the show. “There are outlets that aren’t controlled by the Ortega family but are co-opted nonetheless,” said Mr. Chamorro, a former Sandinista who became a journalist after Somoza gunmen assassinated his father, the editor of La Prensa, in 1978. “All spaces for critical journalism are shrinking dramatically in Nicaragua.”

Article source: http://www.nytimes.com/2011/11/29/world/americas/daniel-ortega-extends-control-to-nicaraguas-airwaves.html?partner=rss&emc=rss