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What could the Fed do? How could they do it?

Neil Irwin explains it all.

By Ezra Klein  | September 29, 2010; 2:31 PM ET
 
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Ezra,

Here are two big questions that perhaps you could answer. For some reason I've never seen these questions really asked, let alone really answered well, with a lot of reading in the econ and politics blogosphere:

1) Can Obama just do recess appointments for the three empty Board of Governors Chairs? The Senate has recesses all the time, including one that just occurred, August 9th – September 12th. Their schedule is here:

http://www.thecapitol.net/FAQ/cong_schedule.html

I have never heard anyone, anyone, ever explain a good reason why Obama didn't do recess appointments for these seats a long time ago. Do you know, or could you perhaps find out, what Obama's reasoning could possibly be for not doing this? Oh please don't let it be he's worried about the one day of headlines, that will be forgotten a week later, making him look un- post partisan fairy land, so he's sacrificing the economy that's about a million times more important in future elections, let alone for the country.

2) If Bernanke really is pro-stimulus (perhaps a big if) why would he want to let the desire for consensus stop him from powering by the opponents on the FOMC? Why wouldn't he push Obama to make the appointments, recess if necessary, to get him the votes on the FOMC, and if the bank presidents stand in the way (if they still did have enough votes) why wouldn't he threaten to not confirm them when all of their tenures come up in 2011 (and follow through on this threat if necessary). All Federal Reserve Bank Presidents need confirmation by majority vote of the Federal Reserve Board when their terms all come up in 2011 (unless I'm mistaken).

What wouldn't Bernanke do this (if he is pro stimulus)? No one has ever outlined plausible reasoning why he wouldn't do this.

I have never seen good answers to these questions in the blogosphere, or anywhere, and I read a lot, and it's not that they aren't important enough to write answers to, not by a long shot.

Posted by: RichardHSerlin | September 29, 2010 4:29 PM | Report abuse

The Fed is already out there buying stocks and buying back debt....they couldn't be doing more to help Obama (and trap the nation on a path to bankruptcy) than they are doing!

Enough already!

Posted by: FastEddieO007 | September 29, 2010 5:17 PM | Report abuse

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