Congress Needs To Sober Up Because They May Take US Down

"The Fed, as I see it, has taken a leap of faith that our political leaders will forge a sensible budgetary and regulatory path that incentivizes businesses to put to work the money the Fed is printing to invest in creating jobs for American workers..," Richard W. Fisher, CEO of the Federal Reserve Bank of Dallas, 11/08/10,

by J John Swanko


11/16/10 (People Port) "We need for the Congress to move quickly, beginning in its lame-duck session," The Dallas Fed's Chief speaking to the Association For Financial Professionals. Those listening to both sides are not in a
pro-active mood. Unemployment is the underlying problem, the banks, capital markets, large firms, majority of midsize and small, firms have credit available.

He points out the manufacturing world (low end) is working to increase employees wages. The Chinese government is
-encouraging- their manufacturers to put in place wage increases. China knows that will encourage consumer spending in China. They took steps to knock down their inflation this week.

Some could see this as a shift to lower cost governments (e.g, Mexico), from China, Vietnam, India and the like, however, firms using the traditional manufacturers margins will be squeezed from the higher rates, dollar, US Tax Code.

Without this pricing power, large, small, publicly traded, private, will continue working to protect margins. This means fewer US based, foreign based workers because of productivity enhancements made possible by today's
cheap money.

Congress, The Media, has throughout this election cycle ignored unemployment, underemployment. Some have written editorials lamenting this.

Most firms with cash reservoirs overseas, however, point to the same Tax Code that originally encouraged their move overseas from preventing them from returning capital here. Firms supporting this candidate or that bill are reminded, This is market allowed them to grow into that large firm.

Congress, this Administration, rarely mentions unemployment, underemployment, in the debate about this upcoming session. Unless you believe the current tax policy in place now, will somehow prove all these business leaders, governments -wrong.

You may want to read his speech here. Plenty of ammunition for all three partys's talkers. You will come to understand why the Fed must remain independent, non-partisan.

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