What Obama still hasn't figured out about being president

[L.T. Fan]

I never said the President has control over those bodies. In fact, after you said "The President has no direct control over them" I said "But he does appoint the Chair [and the Board of Governors]."

This is a source of power even if he can't directly control them. Again, it's like the Supreme Court in a way. Many Presidents have appointed Justices who then turn out completely different than the President wanted when he appointed them, but it's still generally considered a very powerful position and a huge source of power for the President to be able to appoint them.

You then said I am "absolutely wrong" which, no, I'm not. I would be wrong if I said the President directly controls the policy, but I didn't say that. He does appoint the majority of the decision makers, and even if they span multiple presidencies, the ability to pick those people is perhaps one of the most important things a President does.

Would you not agree that our monetary policy is nearly as important, if not more important, as a regime's political policy?

If the President cannot control them then how is he a source of power regarding monetary policy?

 

[Smitty]

If the President cannot control them then how is he a source of power regarding monetary policy?

He picks people who agree with his views to the Chair and the Board, which compromise the majority of the votes on whether to raise or lower interest rates, contract the money supply, etc. Correct me if I'm wrong, but with the FOMC, doesn't the Board vote along with only 4 or 5 Presidents of the Fed Banks? Not all 12 vote, so the board can outvote them.

It's the same as the appointment of Supreme Court Justices. They are not bound to follow him, but the parties each want to have their man in the White House whenever a Supreme Court justice retires. Why? Because they want to be the side doing the picking. Because the decisions that will be handed down over the years will be made by a guy THEY pick.

I'm not saying it's direct control, but if people are voting thinking "The President has no influence on the economy" that is not correct, because he appoints people who have very direct control over the economy, even though they aren't bound to listen to him moving forward.

 

[NoDak]

And like I said, that's nice, now go sit in the corner while the grownups talk.

Am I supposed to be upset over these stupid little so-called insults? Ok

I have something to say to people who know what they are talking about like LT or Plan9. You? Not so much. Your main function here is to name-call and be a douche.

Towards you? Absolutely.

 

[Smitty]

Am I supposed to be upset over these stupid little so-called insults? Ok

Am I?

 

[L.T. Fan]

He picks people who agree with his views to the Chair and the Board, which compromise the majority of the votes on whether to raise or lower interest rates, contract the money supply, etc. Correct me if I'm wrong, but with the FOMC, doesn't the Board vote along with only 4 or 5 Presidents of the Fed Banks? Not all 12 vote, so the board can outvote them.

It's the same as the appointment of Supreme Court Justices. They are not bound to follow him, but the parties each want to have their man in the White House whenever a Supreme Court justice retires. Why? Because they want to be the side doing the picking. Because the decisions that will be handed down over the years will be made by a guy THEY pick.

There are too many people in the Districts serving as Directors andBoard Presidents that are in place and have been in place for years for any control shift to take place. I have a very good friend who sat on the board in the Kansas City District for years before Obama and he is definitely not influenced by what the US president thinks. There are dozens just like him across the country who have been making monetary poliicy for years as Fed Chairman have come and gone. The core does come and go but it is not radically changes as to economic philosophies. The Fed policies and implementations are fairly consistent regardless of Administrative or Agency head changes.

 

[Plan9Misfit]

Schmitty has read many articles and knows without question that the Fed Chairman, along with the also President-appointed Board of Governors, are very powerful people when it comes to setting monetary policy. Just because they can't do it unilaterally doesn't mean they don't have power.

Here's a brief summation.... http://www.usatoday.com/story/money/business/2013/10/09/what-the-fed-chairman-really-does/2950999/

What it doesn't mean, however, is that the President is in charge of the economy. Which was my point.

 

[fortsbest]

So back to my post, the billions that are being pumped into the market; how exactly is that being done? I thought through the Fed, but apparently I'm wrong.

 

[L.T. Fan]

So back to my post, the billions that are being pumped into the market; how exactly is that being done? I thought through the Fed, but apparently I'm wrong.

Private investors who play the market. That is handled by an entirely different group called investment bankers and they are regulated by the Securities and Exchange Commission. This is what is known as the investment market place and has a direct effect on the economy. The Federal Reserve deals with monetary policy which supplies currency and determines internet rates through commercial banks. These are the ones you see that are utilized by the public. The other piece of the pie is fiscal policy which is determined by congress and where the government expenditures and taxes are derived. The final area is where the US president has direct input.

 

[Jiggyfly]

He picks people who agree with his views to the Chair and the Board, which compromise the majority of the votes on whether to raise or lower interest rates, contract the money supply, etc. Correct me if I'm wrong, but with the FOMC, doesn't the Board vote along with only 4 or 5 Presidents of the Fed Banks? Not all 12 vote, so the board can outvote them.

It's the same as the appointment of Supreme Court Justices. They are not bound to follow him, but the parties each want to have their man in the White House whenever a Supreme Court justice retires. Why? Because they want to be the side doing the picking. Because the decisions that will be handed down over the years will be made by a guy THEY pick.

I'm not saying it's direct control, but if people are voting thinking "The President has no influence on the economy" that is not correct, because he appoints people who have very direct control over the economy, even though they aren't bound to listen to him moving forward.

Question? how many appointees do think a president gets on average?

The way you are talking its as if there is a substantial change from president to president, and this is simply untrue.

Also tell us how in your mind Rand Paul could change all of this as president is going to fire everybody and replace them.

 

[L.T. Fan]

Question? how many appointees do think a president gets on average?

The way you are talking its as if there is a substantial change from president to president, and this is simply untrue.

Also tell us how in your mind Rand Paul could change all of this as president is going to fire everybody and replace them.

You may need to prepare yourself for a non response to your comment. What a pity.

 

[Plan9Misfit]

So back to my post, the billions that are being pumped into the market; how exactly is that being done? I thought through the Fed, but apparently I'm wrong.

The Fed functions to buy and sell bonds as a means of regulating and manipulating interest rates. The indirect result is an influence on consumer confidence which causes people to either put money back into the markets or pull it out. The direct result of the Fed's behavior is rooted in the interest rates of overnight loans between banks. The hope is that keeping rates low will encourage borrowing and thus heat up the economy. If banks borrow money more freely between themselves, it (theoretically) will prompt them to reduce their interest rates in other lending areas which encourages average consumers to borrow money to buy a new car, house, etc. This consumer based behavior allows the economy to heat up.

The problem that we're experiencing now is that the Fed is keeping rates low, but Congress has created very strict regulations with respect to lending, so banks can't lend out money even with those low rates, which keeps consumption at levels that are lower than expected.

 

[L.T. Fan]

The Fed functions to buy and sell bonds as a means of regulating and manipulating interest rates. The indirect result is an influence on consumer confidence which causes people to either put money back into the markets or pull it out. The direct result of the Fed's behavior is rooted in the interest rates of overnight loans between banks. The hope is that keeping rates low will encourage borrowing and thus heat up the economy. If banks borrow money more freely between themselves, it (theoretically) will prompt them to reduce their interest rates in other lending areas which encourages average consumers to borrow money to buy a new car, house, etc. This consumer based behavior allows the economy to heat up.

The problem that we're experiencing now is that the Fed is keeping rates low, but Congress has created very strict regulations with respect to lending, so banks can't lend out money even with those low rates, which keeps consumption at levels that are lower than expected.

I might add however that the Treasury,bills,notes and bonds do not actually go into the market place. The sale of these items goes directly to the U.S. government toward retiring debt or funding budgets. In addition to keeping rates low for consumer confidence and borrowing, the benefit to the government is to keep the interest rates low for their own borrowings. This is a much responsible for the extended period of low interest rates because with the current deficits the interest cost alone would exceed the money raised by the treasury issuance. Think what the deficit would be if interest rates were 6 to 7 times higher. The Fed has this private agenda that you won't hear much about because congress wants it kept under the rug and promotes low interest rates as well. This is a fairly recent development in the overall market place in the U.S. economic history.

 

[Smitty]

What it doesn't mean, however, is that the President is in charge of the economy. Which was my point.

I never said he was.