Excerpts from: CNNMoney – May 8, 2014 : “There are two economic trends that Federal Reserve chair Janet Yellen told Congress this week she finds “very disturbing.”
Unfortunately, the Fed has very little power to fix either of them – Or so they believe…
‘Very disturbing’ trend #1: Long-term unemployment
About 3.5 million Americans have been out of a job for at least six months.
This group accounts for 35% of all the unemployed.
“That’s a very disturbing trend, and something that we would like to be able to do something about,” Yellen said to the Senate Budget Committee Thursday.
‘Very disturbing’ trend #2: Income inequality
“We have seen a trend toward rising inequality in income and also in wealth. And I personally view this as a very disturbing trend that policymakers should be looking at and considering what is the appropriate response,” she said.
There are important perspectives that are not being fairly considered in the Fed’s statements. Their policies provided massive liquidity benefits for the banking system, but little, or no, liquidity benefits for “main street” America. Hence the problems with long-term unemployment.
In regard to ‘income inequality,’ the end goal should be economic liberty and greater disposable income at the family level.
We should never trust government to be entrusted with determining and managing ‘income inequality.’ Rather, provide citizens, accross the board, with the same resources that you provided to the ‘big dogs’ of banking during the crisis period – to help them get (in your own words) “healthy.”
The Fed can easily fix these two “very disturbing” economic trends – with the same tools they used to ‘fix’ the banking crisis:
As the banking crisis intensified in the Fall of 2008, with major banking institutions assuming (or on the verge of assuming) ‘underwater’ status, the Federal Reserve ran quickly to the rescue with secret liquidity lifelines” (Bloomberg 8-22-11).
The Fed substantially eased some important collateral rules for banks, “meaning that banks that could once borrow only against sound collateral, like Treasury bills or AAA-rated corporate bonds, could now borrow against pretty much anything – including some of the mortgage-backed sewage that got us into this mess in the first place…. ‘All of a sudden, banks were allowed to post absolute [expletive deleted] to the Fed’s balance sheet,’ [according to] the manager of the prominent hedge fund.” (Source: Bailout Hustle, Matt Taibbi).
The Federal Reserve invented various “facilities” to fire-hose liquidity out to the big banks and big brokerage firms, including these: Primary Dealers’ Credit Facility (PDCF) Term Securities Lending Facility (TLCF) Temporary Liquidity Guarantee Program (TLGP) Commercial Paper Funding Facility (CPFF) Term Auction Facility (TAF) Public Private Investment Program (PPIP)
And now it is time for the Fed to create one final ‘facility’ that will eliminate vast swaths of debt at ‘ground level’ in America and create a dynamic employment environment that will, at the same time, substantially resolve the “income inequality” dilemma:
A Citizens Credit Facility – for direct credit extensions to U.S. citizens.
The Leviticus 25 Plan.