NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

A Look at Who's Poised to Become No.2 at the Fed


Gerald Epstein: Former Bank of Israel Chief Stanley Fischer will likely become the Vice Chairman of the Federal Reserve, but his record shows consistent catering to Wall Street rather than bringing the country to full employment -   December 23, 2013
Members don't see ads. If you are a member, and you're seeing this appeal, click here

Audio

Share to Facebook Share to Twitter



I support the real news because they deal with real issues, not meaningless articles and sound bites - Gary
Log in and tell us why you support TRNN

Bio

Gerald Epstein is codirector of the Political Economy Research Institute (PERI) and Professor of Economics. He received his Ph.D. in economics from Princeton University. He has published widely on a variety of progressive economic policy issues, especially in the areas of central banking and international finance, and is the editor or co-editor of six volumes.

Transcript

A Look at Who's Poised to Become No.2 at the FedJESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I'm Jessica Desvarieux in Baltimore. And welcome to this edition of The Epstein Report.

Now joining us is Professor Gerry Epstein. He is the codirector of the Political Economy Research Institute, otherwise known as PERI, and a professor of economics at UMass Amherst.

Thanks for joining us, Gerry.

GERALD EPSTEIN, CODIRECTOR, PERI: Thanks for having me.

DESVARIEUX: So, Gerry, what are you tracking in the world of economics this week?

EPSTEIN: Well, I'm tracking word that came out that President Obama is likely to name Stanley Fischer to be the vice chair of the Federal Reserve. As you know, Janet Yellen was nominated to be chair, and her--it looks like she's going to make it through the process, and so she'll soon be the chair. She was the vice chair, and now there has to be somebody to replace her, and President Obama has let it be known that he's likely to nominate Stanley Fischer.

Now, who's Stanley Fischer? Stanley Fischer is a very well known economist from MIT who was also the first deputy managing director of the IMF from 1994 to 2001. Most recently, he has been the governor of the central bank of Israel. And in between, he did a stint with Robert Rubin at Citibank.

And the business press is salivating. They think this is a great appointment, that he will be--he's kind of a central banker's banker. But I have some serious doubts about whether this is actually a very good appointment as the vice chair.

The problem is that Stanley Fischer, as much as anybody else, is responsible for the kinds of economics that led us into the great depression--or quasi great depression, if you want to call it that--that we are experiencing at the moment. He is a mainstream economist who is a strong believer in the efficiency of financial markets, a strong believer in the usefulness of capital flows from one country to another. And at the IMF he oversaw the conditionality and the restructuring during the Asian financial crisis. He took South Korea, which was a pretty well functioning economy that had a financial crisis, and used the--he and the other members of the IMF and the Treasury Department under Larry Summers, and used their power to restructure the Korean economy as a neoliberal type of economy.

Generally speaking, he's very much in favor of mostly free market economics. Of course, he's not stupid. He's very smart. And he's learned over time. But basically he's one of the architects of the Washington Consensus, which is has gotten us into this mess to begin with.

But on top of that, he was a vice president at Citibank from 2002 to 2005, during the time when Citibank was developing enormous leverage, new risky products, essentially getting insolvent and helping to drive the U.S. and the global economy into the tank in the process. He was sitting there at Citibank under Robert Rubin, and as far as anybody can tell, did very little to try to stop that kind of policy, and probably profited quite handsomely from it.

Now, as head of the central bank in Israel, he did apparently a very good job of keeping the economy afloat, controlling inflation, etc. But Israel is a very different country than the United States. It's a very small country. It's highly constrained by the global financial markets. It has a lot of constraints that the U.S. economy does not have.

The U.S. economy, at the Federal Reserve, at the U.S. economy, should be promoting high employment, full employment, using all the tools that it can to promote more employment. That's what Janet Yellen wants to do. But now with Stanley Fischer sitting at her side, possibly questioning what she does, trying to be more hawkish on inflation, trying to be less tough on the banks, it will make it harder for Janet Yellen, rather than easier, for her to undertake the kinds of policies that we need to get the economy going.

So I hope that the Congress looks quite closely at Stanley Fischer's record. I think he's probably kind of a Larry Summers in sheep's clothing, and it's not clear that he's the best person for this job.

DESVARIEUX: Alright. Professor Gerry Epstein, always interesting analysis. Thank you so much for joining us.

EPSTEIN: Thank you.

DESVARIEUX: And thank you for joining us on The Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


Comments

Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

Comments


Latest Stories


Fury in the Streets of Baltimore
At Freddie Gray's Funeral, A Call for Real Change
Freddie Gray Laid to Rest, Baltimore Youth Rise Up
Why Saudis Derailed Imminent Yemen Deal With Airstrikes
Not Fit to Rule
Freddie Gray and the Legacy of Slavery in Baltimore Policing
Hundreds Protest in Baltimore, No Police Yet Charged in Freddie Gray's Death
In Freddie Gray's Neighborhood, Residents Say Police Harassment is Constant
Police Violence Not Merely the Product of Police with Racist Attitudes
Michelle Alexander: Baltimore Must Organize to Stop Police Brutality
In Their Own Voices: Protestors Speak Out as Feds Start Probe of Freddie Gray's Death
Town Hall Recap: Should the Community Control the Police?
Ratner Report: The Palestine Exception to the First Amendment
Civil Disobedience Necessary to Protect Victims of Police Brutality, Says Activist
The Pendulum Shifts Left in UK Elections
Brazil Analysis: Upper Middle Class Demonstrations Against President Dilma Rousseff (2/2)
Iraq's Financial Crisis Amid War on ISIS
New Reforms in California Will Reduce its Prison Population
Brazil Analysis: Upper Middle Class Demonstrations Against President Dilma Rousseff (1/2)
Houthi Arms Came from Saleh, not Iran
Washington State Teachers On Strike
2016 Presidential Candidates Test the Waters in New Hampshire
How a Protest Against Money in Politics was Spun as a Story on Terrorism
A Look at Failed Police Reform Efforts in the Wake of Freddie Gray's Death
The True Toll of Policing in Baltimore - The Arrest of a 7-Year-Old
Why Didn't Bush/Cheney Prevent 9/11? - John Kiriakou on Reality Asserts Itself (5/8)
Investigative Report Finds World Bank Displaced 3.4 Million People (1/2)
President Obama Makes Earth Day Proclamation in the Everglades
Analysts say Wall Street Fees Costing Baltimore Water Bureau Millions
Chevron Back in Court for Worst Case of Oil Pollution on the Planet

RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

All original content on this site is copyright of The Real News Network.  Click here for more

Problems with this site? Please let us know

Linux VPS Hosting by Star Dot Hosting