I'm just about ready to sign on to the, "Abolish the Fed" movement. Seriously.

It's bad enough that we put our economy and economic well being into the hands of overpaid, aloof, out-of-paradigm ideologues, but when they say stuff like this what do we need them for?

"...the Fed is not as well-equipped with regulatory powers to rein in housing and other asset bubbles as some other central banks. We won’t know until it’s very late." Read here.

That comment was from Stanley Fischer, who I believe is Vice Chair, just under Yellen.

Not well-equipped in its regulatory role?? Seriously??? That's the thing that it has absolute control over.

These people are useless. I say fire them all and close the Fed down. I will take my chances under the old system. Can't do any worse, that's for sure.

Stanley Fischer — The transmission of exchange rate changes to output and inflation

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Stanley Fischer: The transmission of exchange rate changes to output and inflation
Speech by Mr Stanley Fischer, Vice Chair of the Board of Governors of the Federal Reserve System, at the research conference “Monetary Policy Implementation and Transmission in the Post-Crisis Period”, sponsored by the Board of Governors of the Federal Reserve System, Washington DC, 12 November 2015

Brad DeLong — **Must-Read: What did Alan Greenspan do in 1987 when the stock market suddenly dropped by 25%? He reduced short-term safe nominal interest rates by 200 basis points.

The problem is that the global economy is on the cusp of the second leg down in the GFC. Central banks have already shot off their bazookas and it hasn't resulted in the expected recovery other than a very tepid one in the US, assisted by fiscal policy.

By and large neoliberal conservative forces are in power in most of the economies that count, which either means a preference for austerity or a bridle on stimulative fiscal policies. Conservatives now argue that austerity has not really been tried effectively and central banks need to tighten, fiscal policy needs to be more austere to become expansionary by forcing greater wage flexibility to get investment going — and everyone needs to export, export, export, even though that is impossible in a closed global economy. 

So we are standing on the brink of 1937, and while history doesn't repeat, we all know what happened after that. Let's hope history doesn't rhyme in this case.

Think fiscal, fiscal, fiscal. "It's the demand, stupid."

This is serious. If it is not handled correctly in a prompt way, a global debt deflationary spiral is in the cards and things begin to unravel. Which will be just fine with the liquidationists.

Grasping Reality
**Must-Read: What did Alan Greenspan do in 1987 when the stock market suddenly dropped by 25%? He reduced short-term safe nominal interest rates by 200 basis points.
Brad DeLong | Professor of Economics, UCAL Berkeley

Also

If the effects of the crash cannot be reversed with monetary policy, that leaves fiscal policy — that old, neglected, unpopular tool — to fight any breakouts of deflation or mass unemployment.

Or it leaves central banks to try really radical policies that emulate the directness of fiscal policy, like literally throwing money out of helicopters or OMFG. [Overt Money Financing]

Azizonomics
Correction or Crisis?

John Aziz

Stanley Fischer — The Great Recession: Moving Ahead

The recession that began in the United States in December 2007 ended in June 2009. But the Great Recession is a near-worldwide phenomenon, with the consequences of which many advanced economies--among them Sweden--continue to struggle. Its depth and breadth appear to have changed the economic environment in many ways and to have left the road ahead unclear. 

Today I will discuss three key aspects of the challenges policymakers face as they seek to move ahead. These are: (1) The impact of the Great Recession and the associated Global Financial Crisis on the growth of output, both in the short term and over the longer term. (2) The reform of the financial sector--in other words, how much progress have we made in creating a safer and more stable post-crisis financial environment? (3) The impact of the crisis on the conduct of monetary policy--in particular, how to balance the goals of achieving stable inflation and full employment while also taking into account the need to maintain financial stability. I will leave it to others to address the important challenges facing fiscal policymakers as they determine the appropriate roles and paths for fiscal policy at both the macro- and micro-levels. 

To keep the focus sharp, I will deal primarily with the economy of the United States. But policymakers around the world confront related challenges and I will draw also on the post-crisis experiences of other economies. And I should make it clear that my comments today are mine alone and do not necessarily represent the views of other members of the Board of Governors of the Federal Reserve System or the Federal Open Market Committee.1 

Board of Governors of the Federal Reserve System
The Great Recession: Moving Ahead
Vice Chairman Stanley Fischer
At the "The Great Recession – Moving Ahead," a Conference Sponsored by the Swedish Ministry of Finance, Stockholm, Sweden, August 11, 2014