Contact Form


Email *

Message *

Friday, October 11, 2013

Spending Out Of Control--Debt to Double By End Of Obama's Term. This Is Un-Sustainable And Will Lead To The End Of The US As We Know It. Where Does The Explosion Occur--32 Trillion or 67 Trillion Or 100 Trillion

Image: National Debt Set to Double Before Obama Leaves Office

National Debt Set to Double Before Obama Leaves Office

Thursday, 10 Oct 2013 03:49 PM
By Courtney Coren
More . . .
A    A   |
   Email Us   |
   Print   |
The national debt is set to double by the time President Barack Obama leaves office, if it continues to increase at the current rate.

In January 2009, when Obama began his first term, the federal debt was $10.6 trillion. As of this week it has increased 57 percent to $16.7 trillion, The Washington Times reported.

As Congress is faced with raising the debt ceiling by Oct. 17 or letting the government default on its bills, Obama has argued that doing so "won't add a dime" the federal debt.

"It does not increase our debt," Obama said. "It does not grow our deficits. All it does is allow the Treasury Department to pay for what Congress has already spent."

These claims by the president gloss over the growing total debt, according to Alex Brill, a budget specialist of the American Enterprise Institute.

"It's certainly not the whole story," Brill told the Times. "We've seen a dramatic increase in the debt held by the public in the last four or five years, and it's projected to only get worse."

According to, the amount that the federal government owes the public is set to double as well. The government currently owes the Treasury $11.94 trillion, which is an 89.3 percent increase from the day Obama took office.

"The Obama administration has projected an annual deficit of $750 billion in the fiscal year that began Oct. 1, and $626 billion the year after," FactCheck wrote in its third quarter update. "At that rate, the debt owed to the public will more than double during the Obama presidency."

Several in the GOP say that increasing the debt ceiling should be coupled with spending cuts.

House Speaker John Boehner said Sunday that Republicans will not agree to raise the debt ceiling without addressing deficit spending.

"We're not going down that path," he told George Stephanopoulos while appearing on"This Week" on ABC. "It's about time to deal with America's problems. How can you raise the debt limit and do nothing about the underlying problem?"


Republican Sen. Tom Coburn of Oklahoma expressed a similar sentiment Tuesday.

"We are in trouble financially," Coburn said. "We are $30 trillion in the hole, plus another $17 trillion in debt. Wouldn't it be smart if we started addressing that problem before we blankly allow an increase in the level of the credit card?"

Related Stories:
Obama's 'Slippery' Claims on Obamacare, Budget
Cruz: Tie Debt-ceiling Rise to 'Obamacare' Changes
© 2013 Newsmax. All rights reserved.

Read Latest Breaking News from
Urgent: Should Obamacare Be Repealed? Vote Here Now!

Gun Debate From Another Angle

The Dollar  
Thursday,October 10, 2013
Why Dear Slavey Embraces Gun Culture
Dear Slavey, 
There was yet another mass shooting in the US this week. Should I just lock and load and forget all the moral and constitutional arguments for and against? Are we heading toward a fully armed society where it's completely normal for everyone to be packing?
Seth in Louisville, KY
Dear Seth,
Yes and  yes. I've given up on this issue. We not only live in a Police State; we also live in the Wild West. My acceptance of US gun culture was cemented by an incident in my neighborhood last week. It's an upper middle class kind of place - nowhere near a 'bad' neighborhood, but an elderly neighbor was walking late at night and someone stuck a gun in his face. He was saved by someone driving by who shouted, "I have a gun too and if you dont't leave him alone, I'm going to use it."
So enjoy your firepower, but learn how to use your weapon safely and keep the damn thing locked and away from children with the ammunition stored away from the gun until you plan to use it. If you have kids, get something they can relate to, like an Elmo doll, and shoot its puffy little head off in front of them so they understand what a gun is capable of doing to them or their friends. And PLEASE don't leave it loaded under you bed if you want to see your kids graduate grade school. Your kid will find it and play with it and he or she will die. 
Oh, and if you're depressed after a crisis, remember that having a gun around will make it really easy for you to find a permanent solution to your temporary problem - so store it at a neighbor's house for a few days. 
Good luck, Slaveys
Slavey makes his middle class living on a contract basis in Southern California. He's not poor but definitely not rich - and plans to stay in California for the duration of the economic collapse. The opinions and advice in Dear Slavey should always be checked by your own experts, but has guerrilla style street-smart advice for middle class people on how to negotiate their way through the Police State of America. For more check out TDV Homegrown where Slavey is a regular contributor.
Have a question for Dear Slavey? Email to
Thanks to a real world experience Dear Slavey has accepted an unassailable fact of life: If only cops and criminals have guns, then innocent people will die while waiting in vain for the cops to arrive. 
I have to add that there is no gun problem. There is a mental health problem as some of the stressed out subjects of the most expansive and powerful police state empire ever break down after being force fed dangerous concoctions from the government-backed corporate pharmaceutical cartel. 
If you think it's a little "out there" to suggest that the government would happily push dangerous drugs instead of making sure we had access to safe ones, just remember: alcohol is perfectly legal while marijuana possession will get your home invaded, your pets killed and you tossed in a rape room for a few years. 
While I believe that you can buy whatever you want from air rifles to nukes, I understand the fear that so many people have about every man, woman and child being armed to the teeth at all times. First of all, I'd much rather weapons be disseminated throughout the population instead of all in the hands of governments which use them to brutalize their subjects or kill thousands of foreigners. 
But in a free world, there'd be much less need to be armed with deadly force because there would be virtually no crime. There'd be no prohibition and no involuntary poverty without the government thwarting wealth creation and price deflation and entrenching an underclass with stolen funds. And the market in a free world would undoubtedly devise non-lethal personal protection devices that were at least as effective as firearms in thwarting an attacker. 
All this talk of drugs and firearms brings to mind the recently and dearly departed Silk Road which we just began to cover in TDV Homegrown just days before its demise. Woe was we. But the market and its adherents never rest (which is why the state will eventually go down) and we're already looking forward to covering Silk Road's replacements as well as ways to profit from the grey and black market (i.e. free market) exchanges. Also in the upcoming issue Justin O'Connell will reveal how to exchange bitcoins for both fun and profit. Make sure you sign up in time. Click here to learn more. 
Gary Gibson
Editor, The Dollar Vigilante

Democrats Prove They Are Not For The Common Man/Woman

John Hawkins
Recommend this article 
Democrats thought shutting down the government was going to be the smartest decision they ever made, but it's looking more like Napoleon's march into Russia every day. For the first time in years, the Republicans sound like reasonable, principled adults who are willing to compromise to help the country. Meanwhile, Democrats are coming across like arrogant Lords telling the rest of the rabble in flyover country what rights they're willing to allow them to have. Just look at what the public has already learned about the Democrats from the shutdown.
1) Harry Reid doesn't care about kids with cancer: It's no secret that Harry Reid isn't a very nice guy. After all, this is a man who once complained about the stench of tourists visiting Capitol Hill. However, Reid apparently isn't a big fan of little kids with cancer either.
 “But if you can help one child who has cancer, why wouldn’t you do it?” (CNN's Dana Bash) asked. ...“Why would we want to do that?” Reid asked. “I have 1,100 people at Nellis Air Force Base that are sitting home. They have a few problems of their own.”
Did you catch that? Republicans want to fund existing programs to help kids with cancer while the Senate Majority Leader wants to hold those children hostage in an effort to force the GOP to give in to his other demands. Maybe we can interview the parents of some of those kids and see how they feel about Harry Reid using their dying children as bargaining chips in his political poker game.
2) Barack Obama is willing to deliberately tank the stock market for political reasons: In an interview with CNBC, Barack Obama tried to frighten Wall Street into selling stocks.
 Told by CNBC’s John Harwood that Wall Street is “pretty calm” about the government shutdown and political infighting, Obama said: “…I think this time they [Wall Street] should be concerned.” During the first two hours of trading, the Dow fell by more than 100 points. This is what Obama wanted, except that he likely wishes it had fallen more.
Barack Obama knows that a lot of Americans would be hurt by a big sell-off, but as long as it doesn't affect his lavish golf outings and opulent vacations, he doesn't care.
3) Democrats don't care if Obamacare works or not:
The Republicans have been pushing for a one year delay of Obamacare and if your ultimate goal is to repeal the law, that would be a mixed blessing. Yes, the law wouldn't go fully into effect for another year, but the law isn't ready to go live. People are losing their jobs and their insurance left and right, there are massive software glitches that are apparently months away from being fixed, and there are students facing 300% increases in premiums to get on the exchanges. It's funny to hear Democrats compare Obamacare to Apple. That would be a fair comparison if Apple's products were crap, if the public were forced to buy Apple’s iPhones, and if the company’s own employees wouldn't use an iPad unless someone else paid for it.
4) The Democrats absolutely, positively will not compromise: Barack Obama is terrible at governing, but great at shifting blame. Despite the fact that everything he touches turns into a steaming pile of....uhm, Harry Reid....he has still spent years pointing the finger of blame at Republicans for not compromising with him. Yet, the central message from the Democrats for the entire shutdown has been, "We will not compromise under any circumstances." Barack Obama is behaving like a child threatening to hold his breath until he turns blue unless he gets his way and he's doing it so publicly that even the mainstream media can't cover it up for him.
5) Democrats don't care about veterans: The way Democrats have treated our WWII veterans during the shutdown has been absolutely shameful. They blocked off an open air monument out of spite towards WWII vets. They even threatened to arrest these men for going to see the monument. If Republicans like Steve King hadn't gotten involved and the public hadn't raised a stink about their despicable behavior, some of these old veterans, who aren't in the best of health, might have died without ever getting to see a monument built to honor their incredible contributions to this country.
6) Democrats in Congress believe they should be exempt from Obamacare: When the Democrats were selling Obamacare to the public, they proudly said they'd be using the plan, too. However, Obama broke the law to make sure that the rest of us would pay 75% of the Obamacare bill for members of Congress and their aides. There was a lot of talk that Republicans were secretly in favor of this as well. However, when it came time to vote, the House voted to get rid of the Obamacare exemption and every Republican in the Senate went the same way while Democrats in the Senate unanimously went on the record demanding an exemption for themselves and their staffs. In other words, Obamacare isn’t good enough for Democrats in Congress, but they’re going to force you to take it whether you want it or not

Unintended Consequences of ObamaCrapCare

Dr. Ben Carson: Obamacare Hurts Just as Healthcare 'Golden Age' Emerges

Sunday, 06 Oct 2013 07:32 PM
By Greg Richter
More . . .
A    A   |
   Email Us   |
   Print   |
Just as healthcare enters a "golden age," Obamacare threatens to reverse course, warn Dr. Ben Carson and Rep. Michael Burgess, R-Texas in a guest editorial for Forbes.

"The full promise of genomic medicine informing diagnosis and treatment beckons from just over the horizon," the two write. Young doctors just starting out "have the ability to alleviate human suffering that no generation of doctors has ever previously known," they say.

Carson retired in May as a professor of neurosurgery, oncology, plastic surgery, and pediatrics at the Johns Hopkins School of Medicine. He has become a tea party favoriteafter criticizing the Affordable Care Act at this year's National Prayer Breakfast as President Barack Obama sat on the dais.

Burgess, part of the House's tea party caucus, was a practicing physician before winning Dick Armey's former seat in 2003.

Obamacare was not the product of careful study by a learned group, the two say, but "a hastily contrived political farce that was literally cobbled together at the last possible minute."

The writers are critical that successful state models were not looked at. The Healthy Indiana program, they note, cut healthcare prices by 10 percent during a two-year period.

The Affordable Care Act was never intended to actually become law, they argue "— except that it did." In the past 3 1/2 years since its passage, Obamacare has been "pushed and prodded" by officials "to give it the appearance of workability."

America is on the threshold, they write, of finding out whether it will be a success. Americans without insurance from their employers could begin signing up for state-run exchanges on Oct. 1, but the first week has been bugged with problems with rampant reports of failures to log in.

The government hasn't released numbers of those who have successfully signed up for insurance, but the site was taken down over the weekend to fix the problems.

Tea party Republicans in the House and Senate have led the effort to tie a budget bill to funding for Obamacare, and the government has been shut down since Oct. 1 over the impasse.

"In medicine, we sometimes talk about the compression of morbidities, how the ravages of time and multiple maladies may overwhelm the patient at the end of life," Carson and Burgess say. "That compression sequence also seems to describe afflictions of the Affordable Care Act as it careens towards implementation."

Thursday, October 10, 2013

Even A Stopped Clock Is Correct Two Times A Day. Taliban Nails It Even Though Their Intent Is Not Honorable

Topsy-Turvy World: The Truth In The Taliban’s Mockery Of Government Shutdown

October 9, 2013 by  
Reports that Taliban troops in Afghanistan are mocking the U.S. over the ongoing government shutdown indicate the terrorist group is as despicable as ever. The sad part is that their taunts are filled with true observations. It’s a very messed up state of affairs in Washington, D.C. when our greatest enemies have to exercise almost no imagination to mine our elected leaders’ behavior for propagandist fodder.
The Al Arabiya English-language news website reported Wednesday on a Taliban statement that made its way into foreign media outlets, featuring comments from an unspecified source within the Afghani militants who derided American politicians for “sucking the blood of their own people.”
The statement also contained the following remarks:
The American people should realize that their politicians play with their destinies as well as the destinies of other oppressed nations for the sake of their personal vested interests.
The insurgents blamed “selfish and empty-minded American leaders” and claimed they were guilty of taking U.S. citizens’ money “earned with great difficulty” and then “lavishly spending the same money in shedding the blood of the innocent and oppressed people.”
“Instead of sucking the blood of their own people… this money should be utilized for the sake of peace,” the statement adds.
If someone attributed those words to an American newspaper columnist criticizing the policies of any of our last four Presidents, no one would blink. And let’s be clear on this point: the Taliban deserves no sympathy for being right about anything. As the saying goes, even a broken clock is right twice a day. Statements like these are tailor-made to foster dissent back in the land of the Great Satan, and so they necessarily ratchet the terror rhetoric to a pitch that Western ears can discern. The “peace” remark is particularly risible.
But it’s an outright shame that Congress and the President, by their behavior, play into the hands of those who would cheer America’s utter undoing.

ObamaCrapCare Loses Another Supporter--Wolf Blitzer! It Is So Bad That Even Liberals Want It Stopped!

You Know It’s Bad When Wolf Blitzer Wants To Delay Obamacare…

October 9, 2013 by  
Pigs flew Wednesday as CNN’s Wolf Blitzer said – on television – that President Barack Obama should listen to the criticisms of Obamacare websites coming from Republican opponents, as well as the American people, and delay the entire undercooked plan.

“If they weren’t fully ready, they should accept the advice that a lot of Republicans are giving them — delay it another year, get it ready, and make sure it works,” said Blitzer.
“They know how to do it, but if they didn’t get it ready on time, then maybe fix the problem and make sure people don’t have to worry about it.”
Hey, the White House has already ignored its Constitutional task of enforcing the laws, in their entirety,  that Congress passes. So why not give individuals the same one-year break that companies are receiving? It’s not too late – even Wolf Blitzer can see that.
H/T: National Review

Who Is Caring For Closed Memorials? No One! Man Tries And Is Asked To Leave.

Man Mowing Grass At Lincoln Memorial Reminds Us That America Is Elbow Grease, Not Bureaucracy And Handouts… Feds Tell Him To Get Lost

October 9, 2013 by  
Early Wednesday an unidentified man took his lawnmower and a few tools to the Lincoln Memorial to provide free groundskeeping work to the closed Federal monument. Multiple Park Police officers promptly asked him to leave.
Via Twitter:

It’s unclear how much of the expansive lawn behind the memorial was mowed, but Park Police were alerted and three cruisers with multiple officers showed up.
THE WEEKLY STANDARD watched the officers observing the mystery mower from a distance, as he appeared to be packing it up for the day, carefully placing his blue South Carolina flag in a tube attached to his tool-toting dolly.
According to Park Police public information officer Sergeant Paul Brooks, there was no arrest made. “He was asked to leave, and he complied,” said Brooks.
The lawnmower-wielding patriot was later identified as South Carolina native Chris Cox, who said that he decided to clean up the National Mall not for political reasons, but out of respect for veterans preparing to descend on the Nation’s capital for this weekend’s Million Vet March.
“These are our memorials. Do they think that we’re just going to let them go to hell? No,” Cox told All-News 99.1 reporter John Domen. “If they shut down our memorials, we’re still going to take the trash out, we’re going to clean the windows, we’re going to cut the grass, we’re going to pull the weeds, we’re going to do the tree work.”
Armed with a push mower and a chainsaw, Cox set about clearing a branch which had fallen onto a path near the reflecting pool and mowing the lawn around the Lincoln Memorial on Wednesday. He said that he hoped more volunteers would join in what he dubbed the Memorial Militia.
Park Police reportedly initially left the bastion of citizenship alone– but he was later asked to stop providing the Federal government with free landscaping services for “liability reasons.”
He said, however, that he will do the best he can to clean up the area between the Lincoln and World War II memorials before veterans arrive Sunday.
Representative Mark Sanford (R-S.C.), upon learning of Cox’s endeavor, said Cox should be honored for his effort.
“Chris embodies what it means to be not just a South Carolinian, but an American,” said Sanford. “He saw a job that wasn’t getting done and decided to take care of it.”
Below is a video of Cox being interviewed:
While the man’s mowing is a small gesture, do you think more acts of similar civil disobedience by Americans throughout the Nation could send a powerful message to the Federal government?

Wednesday, October 9, 2013

The Positive Hype On Yellen Starts--Can We Believe Any Of It?

Laurence Meyer: Yellen Faces 'One of Most Challenging Tasks the Fed Has Ever Had'

Wednesday, 09 Oct 2013 07:21 AM

More . . .
A    A   |
   Email Us   |
   Print   |
When the deadly Loma Prieta earthquake struck San Francisco in October 1989, then-professor Janet Yellen was working in her sixth-floor office at the University of California at Berkeley.
Rather than reacting with alarm, she remained at her desk until she was urged by her colleague, Andrew Rose, to join him under a door frame where they would be safer.
“I was sure the building was going to collapse and I was going to die,” said Rose, co-author of a number of research papers with Yellen, who is now vice chairman at the Federal Reserve in Washington. “But she was quite calm right through the earthquake. I don’t think she said a thing.”
That composure should serve her well now that she is about to be nominated by President Barack Obama to become the next Fed chairman and the first female leader of the central bank in its 100-year history. If approved by the Senate, she will ascend to the top of the world’s most powerful central bank for a four-year term at a time when its balance sheet has swollen to more than $3.7 trillion, even as the economy continues to struggle.
“She has one of the most challenging tasks the Federal Reserve has ever had,” said Laurence Meyer, who served with Yellen on the Fed board in 1996 and 1997 and is now senior managing director at St. Louis-based Macroeconomic Advisers LLC. Yellen will confront “very difficult decisions” on monetary policy that are going to be “controversial” inside the Fed and in financial markets.
Scale Back
Just how hard was highlighted by wide swings in the financial markets during the last four months as investors reacted first to suggestions by outgoing Fed Chairman Ben S. Bernanke that the central bank would scale back its bond-buying program and then to news on Sept. 18 that it had decided, for now, not to. Since Bernanke’s first hint of action on May 22, the yield on the Treasury’s benchmark 10-year note has swung from 2.01 percent to a two-year high of 2.99 percent on Sept. 5 before settling at 2.63 percent at 5 p.m. in New York, according to Bloomberg Bond Trader prices.
The 67-year-old Yellen brings a wealth of experience to the Fed chairman job. All told, she’s spent almost a dozen years as a policy maker at the central bank, half of that as president of the Federal Reserve Bank of San Francisco.
A meticulous macroeconomist, Yellen has a reputation as one of the Fed’s more dovish officials because of her focus on unemployment. She’s a “fierce advocate” of its dual mandate to promote price stability and full employment, Meyer said.
Leading Dove
In spite of her identification as a leading dove, Yellen has shown an ability to forge consensus with the more hawkish, anti-inflation members of the Federal Open Market Committee — a quality that could come in handy as the central bank wrestles with when and how to unwind all the stimulus it has pumped into the economy.
“She’s quite aware of her analytical polish and capabilities — but she uses it as forcefully and persistently as necessary but not more so,” said Jim Wilcox, a professor at the University of California’s Haas School of Business in Berkeley.
Wilcox, who said he fought “intellectual battles” with Yellen when they lunched together at the university, described their encounters this way: “She would smilingly disabuse me of all sorts of suppositions, implications that I might offer.”
Yellen’s resume does have some holes. She’s never been a front-line crisis fighter and lacks direct experience in the financial markets. And while she has given numerous speeches, her unscripted public appearances have been less frequent.
Confronting Turmoil
While Yellen took part in efforts to quell the 2007-2009 crisis as president of the San Francisco Fed, “she wasn’t in first seat” in confronting the turmoil, said Alan Blinder, vice chairman of the Fed from 1994 to 1996 and now a professor of economics at Princeton University in New Jersey.
Blinder, who co-authored a book with Yellen, said he isn’t sure she’ll be able to present the calming public persona that might be important in a crisis.
“You never know until people get called upon to do that,” he said. Blinder, who helped recruit Bernanke to join Princeton’s economics department in 1985, said the same observation could have been made about him before he became chairman and showed that he was up to the role.
It isn’t an idle concern. The Fed’s policy of keeping short-term interest rates pinned near zero for an extended period increases the odds another crisis could occur.
“Our fear, from a risk perspective, is you may end up generating an asset bubble somewhere,” said Michael Gapen, a senior U.S. economist at Barclays Plc in New York.
Crisis-Fighting Experience
Gapen, a former researcher in the Fed’s Division of Monetary Affairs, played down the importance of Yellen’s lack of first-hand crisis-fighting experience, arguing that the institution is well-versed in this regard.
Yellen’s ability to handle herself publicly will be tested when she has to appear before the Senate Banking Committee considering her nomination. Richard Shelby of Alabama, then the senior Republican, opposed her appointment as vice chairman in 2010, arguing she would make the Fed less worried about rising prices.
Allan Meltzer, author of a two-volume history of the Fed, echoed that concern, saying Yellen’s zeal to reduce unemployment could lead to a “replay” of the 1970s, when overly lax monetary policies led to a burst of inflation.
“She’s pretty dovish,” said Meltzer, a professor at Carnegie Mellon University’s Tepper School of Business in Pittsburgh. “She will repeat the mistake that the Fed has made many, many times — that is, delaying concern about inflation until inflation rises.”
Yellen Supporters
Her supporters take issue with that assessment.
“She knows more economic history than most economists,” said Rebecca Blank, who served with Yellen on the Council of Economic Advisers in 1998 and 1999 and is now chancellor of the University of Wisconsin-Madison. “Janet is not a one-note economist. She would adapt to the times.”
At the council, Yellen showed an ability to handle the “101 issues that come at you every day” without losing her poise, Blank recalled. “She was unflappable” and “always thoughtful and measured in her responses.”
The soft-spoken Yellen was a standout from the start. When she graduated from Fort Hamilton High School in Brooklyn, New York, in 1963, she won the Phi Beta Kappa award, the Mayor’s Committee Scholastic Award, the mathematics award, the science award and the overall English department prize, in addition to being class valedictorian.
She attended Pembroke, Brown University’s women’s college, where she was one of only a few students majoring in economics. Yellen says she choose the subject because it provides a logical way to grapple with questions related to human welfare.
Great Depression
“I was of a generation that still was affected by the Great Depression,” she said in an interview in 2011. “I didn’t live through it, but my parents grew up during it.”
She received her Ph.D. from Yale University in 1971 after studying under future Nobel laureate James Tobin, a forceful advocate for government intervention in the economy.
“The perspective of those who studied with Tobin at Yale was that the government has an affirmative responsibility to offset the instabilities of the private economy,” said James Galbraith, another Yale Ph.D. who worked on the Humphrey Hawkins Act of 1978, which affirmed the Fed’s obligation to pursue stable prices and maximum employment.
Tobin at the time was engaged in a public debate with another Nobel laureate, Milton Friedman at the University of Chicago, about economics, particularly monetary policy, said Richard Cooper, who was at Yale from 1963 to 1977.
Lacked Ability
Friedman argued that the Fed lacked the ability to manage the ups and downs of the economy and instead wanted the central bank to focus on controlling inflation through steady growth of the money supply, according to Cooper, who is now a professor at Harvard University in Cambridge, Massachusetts.
“They had a high degree of mutual respect, but Tobin thought Friedman, particularly in his monetary economics, was dead wrong,” Cooper said.
Yellen’s first job after leaving Yale was assistant professor at Harvard. She might never have made it to the Fed if the university had awarded her tenure. She joined the central bank in 1977 as an economist in the central bank’s division of international finance. There she met her future husband George Akerlof, who was working in the bank’s division of research and statistics and would win a Nobel Prize in 2001.
They fell in love over discussions in the cafeteria at the Fed’s Martin Building, known inside the central bank for its panoramic views of the National Mall and mediocre food.
Labor-Market Research
The two eventually ended up in Berkeley at the University of California, where they wrote more than a dozen papers, some together and some individually. They also edited a book examining how the labor market functions.
“George is more loosey-goosey, more casual, with flashes of brilliance,” said Rose, who co-wrote papers with both of them. “Janet helps to separate the wheat from the chaff. She’s incredibly sensible and allows you to think very carefully and rigorously about the ideas.”
A favorite of students, Yellen twice won the award as teacher of the year, according to Rose, a professor at the university’s Haas School of Business since 1986, who described her teaching style as “slow and methodical.”
“She’s a super clear expositor,” Rose said. “The issue with her can be that she explains something at such great length that you’re bored silly.”
Rigor, Preparation
Yellen returned to the Fed in 1994, after being nominated to the board by then-president Bill Clinton. She developed a reputation for rigor and preparation, arriving at meetings with typed-up remarks that she revised as other policy makers at the table spoke, recalled fellow board member Susan Phillips.
“It’s a demonstration of how careful she was,” said Phillips, now a professor emeritus at George Washington University in Washington. “She listened to what other people had to say and went through editing her comments to reflect and respond to it.”
Belying her later reputation as a dove, Yellen arrived at the Fed in the midst of a credit-tightening cycle and supported repeated interest-rate increases. About four months into her term, Rose said she joked that she was the most hawkish Fed governor in history, based on the amount of tightening she had backed in the short time she’d served.
Yellen again showed a willingness to tighten credit in 1996 when she and Meyer privately urged then-Chairman Alan Greenspan to boost rates, according to the Macroeconomic Advisers director. Greenspan demurred, putting off an eventual 0.25 percentage-point increase in the benchmark rate to March the following year, a month after Yellen left the central bank.
Council Chairman
Following a spell as chairman of Clinton’s Council of Economic Advisers and another round of teaching at Berkeley, Yellen came back to the Fed in 2004, this time as president of the San Francisco district bank.
While there, she “pioneered a multidisciplinary approach to banking supervision” that brought together economists and supervisors and was adopted by the Fed board in Washington during the crisis, according to Stephen Hoffman, who worked with her at the time and is now a managing director at Promontory Financial Group in Washington.
She also was quicker than many of her colleagues to recognize the danger posed by the housing market, telling the FOMC in mid-2007 that it was the “600-pound gorilla in the room,” according to meeting transcripts released by the Fed.
‘Appreciable Angst’
“The risk for further significant deterioration in the housing market, with house prices falling and mortgage delinquencies rising further, causes me appreciable angst,” she said, six months before the U.S. fell into recession.
As head of the San Francisco Fed, Yellen wasn’t at the forefront of efforts to contain the housing-led financial crisis that broke out the following year: Bernanke depended on a few key advisers in Washington and New York to do that. She was involved in plotting the monetary response to the turmoil as a member of the FOMC.
Since becoming vice chairman in 2010, Yellen has spearheaded an effort to improve the Fed’s communications with investors and the general public. As head of an FOMC subcommittee, she helped unite the sometimes fractious policy makers in support of greater openness and transparency.
She also has been influential in prodding the committee into adopting an increasingly expansionary monetary policy, from initiating a third round of quantitative easing late last year to firming up a promise to keep interest rates near zero.
‘The’ Force
“Janet was a force — perhaps ‘the’ force — behind the FOMC’s decision to move to an even more accommodative policy last December,” Meyer said. Now she must shift from being a leader of the dovish “opposition” inside the central bank to becoming chairman of the FOMC, he added.
Yellen’s calendars, obtained under the Freedom of Information Act, show more than 90 meetings by phone or in person with Fed district bank presidents in 2011 and 2012, when she visited the Boston, New York, Philadelphia, Atlanta, Cleveland, Chicago, Minneapolis and San Francisco.
“Janet is quietly but dauntingly persuasive,” Rose said. That “is pretty important on the FOMC these days,” as policy makers try to keep the expansion going while looking ahead to rolling back their economic stimulus.
© Copyright 2013 Bloomberg News. All rights reserved.