Oh, Good: The Fed Urges More Government Housing Aid

Erika Johnsen

1/8/2012 3:15:00 PM - Erika Johnsen

Hey, I have an idea: how about, instead of searching for new, expanded ways to further the role of the federal government in individuals' and businesses' private financial lives and deepen the rut that caused and is keeping us in the economic doldrums, we instead think of ways to scale back the federal government's power and free people, businesses, and banks up to engage in free enterprise and innovation without interference? Anyone? Ugh, these big-government types just never learn! If Bernanke gets his way, the Fed is going to gum up the works of the housing market even more with their uncertainty-creating 'interventions.' Easing, schmeasing:

Three Federal Reserve policy makers said the U.S. government should try new ways to spur the housing market without agreeing about how much more the central bank needs to do to bring down interest rates.

New York Fed President William C. Dudley said in New Jersey yesterday that “additional housing policy interventions” can help boost growth, even as the Fed should consider further easing. Boston Fed President Eric Rosengren, speaking in Connecticut, took the more-aggressive position of supporting the purchase of mortgage-backed securities, while Fed Governor Elizabeth Duke said in Virginia that the central bank’s current monetary stance is “appropriate.”

The comments underscore concerns by Fed officials that they may be reaching the limits of their power to boost growth and lower unemployment through three years of near-zero interest rates and unconventional policy tools. Chairman Ben S. Bernanke this week urged lawmakers to do more to revive the housing market, calling it an impediment to the economic recovery. He delivered a 26-page staff report to Congress outlining possible solutions.

Ron Paul would not be pleased.