• Federal Reserve Arrogance

      Government's desire to do more is spilling into the stock market. The new NY Fed director says that he should be allowed to identify and speculate against market "bubbles." What arrogance. Donald Luskin sums it up in today's WSJ:

      William C. Dudley, the ex-Goldman Sachs economist just appointed president of the New York Federal Reserve, has upped the ante. He thinks the Fed should be responsible for identifying and preventing asset-price bubbles. Considering that the Fed’s track record reveals more skill at causing bubbles than preventing them, this is a very dangerous idea. ...

      Mr. Dudley claims that “Asset bubbles may not be that hard to identify—especially large ones” and suggests “additional policy instruments”—that is, new regulatory powers for the Fed to “more directly influence risk premia.” Because risk premia are a key element in determining asset prices, Mr. Dudley is effectively asking for the power to control asset prices. ...

      He notes confidently, by way of example, that “the housing bubble in the United States had been identified by many by 2005.” Well, that’s true. But it is only true in retrospect. It offers no justification for a leap toward government control of asset prices. ...

      Consider Mr. Dudley himself. In a 2006 speech at a conference of the National Bureau of Economic Research, when he was still with Goldman Sachs, Mr. Dudley listed “five bubbles that one could reasonably have identified in real time.” He said that he’d “tried to speculate against three of the five bubbles” but confessed his speculations met only “with limited success.”

      Even if Dudley had a stellar track record, I would say: Investors should feel free to give him their own money to invest against stock bubbles, but he shouldn't be able to use government force to take the public’s money to try to set asset prices.

      Pre-October 2009
  • This Week's Show -- July 10, 2014

    MEDIA BIAS: When I began my career as a consumer reporter, I had an obvious agenda: Businesses cheat consumers! Government must regulate them! But when I wised up about the problems with government, my bosses resisted, and I stopped receiving Emmy Awards. Emmys reward liberal reporting.

    CENSORSHIP AT CBS: Investigative reporter Sharyl Attkisson has a similar story. She explains why she left CBS after it became "harder and harder to get stories on television" that criticized this government and "any powers that be."

    IS STOSSEL BIASED?: Years ago, journalist Howard Kurtz criticized me for not being objective. I said it's impossible for any journalist to be completely objective. Now that Howard Kurtz is on Fox, we debate again.

    THE OBJECTIVITY MYTH: Andrew Kirell of Mediaite.com says, "every journalist has a point of view and they don't just magically check it the minute they walk in the newsroom door."

    NEW MEDIA: Reason TV's Remy Munasifi uses music videos and parodies to complain about things like politicians' spending. One of his latest parodies highlights the scandal surrounding the VA hospitals. Munasifi discusses his videos, which have gone viral on YouTube.

    RETRO REPORT: It's great there's a new media organization called Retro Report, which reveals media hype of the past ("crack babies," America's landfill "crisis," the "superpredator," etc.) and corrects stories everyone in the media got wrong. I discuss the new show with its executive producer, Kyra Darnton.

    REAL OR FAKE?: Sometimes people in the media say things that are so bizarre, you'd think they were made up. Kennedy of The Independents quizzes FoxBusiness.com's Kate Rogers, Fox Business host Charles Payne and me to see if any of us can tell which quotes are real, and which were made up by my staff.

    MY TAKE: I used to report on lots of scares. CBS even ran an ad for me where someone called me a "guardian angel."

    That's bunk. The only guardian angel is a free and open society. That's what allows innovation, gives people longer lives, and lifts billions out of poverty. But these gradual improvements aren't newsworthy. Scares and disaster make the news.

    News is broken not just because we're biased but because most good and important news happens slowly.

    9PM ET on Fox Business Network