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No need for more stimulus, says Minneapolis Fed chief

MORNING EDITION

There will be no “QE3” if the local Fed president has his way. Bloomberg’s Joshua Zumbrun reports: “Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the U.S. economy didn’t need additional stimulus in August and probably won’t require more easing this month. ‘The data in August did not justify the additional accommodation provided’ by the central bank on Aug. 9, Kocherlakota said [Tuesday] in a speech in Minneapolis. ‘It is unlikely that the data in September will warrant adding still more accommodation.’ Kocherlakota signaled reluctance to back more stimulus even after the Labor Department reported last week that the economy added no jobs in August and the unemployment rate remained unchanged at 9.1 percent. His speech is similar to remarks he delivered last week in Bismarck, North Dakota.”

Eventually even the Vatican has to start running low on cash. Amy Forliti of the AP reports on the latest sexual abuse pay-out: “A woman who says she was sexually abused by a former priest in northern Minnesota when she was 14 has reached a $750,000 settlement that requires the Diocese of Crookston to warn parishioners about the abuse and take steps to protect kids in the future. Megan Peterson, now 21, of Thief River Falls, appeared at a news conference Tuesday in St. Paul to announce the settlement. … Peterson says she was a teenager with aspirations of becoming a nun when she was raped multiple times by the Rev. Joseph Jeyapaul, a priest from India who had been appointed to serve at three parishes in northwest Minnesota. Peterson says she told the diocese about the abuse, but a person there hung up on her.”

The effects of tick-borne disease linger a very long time. Lorna Benson of MPR writes: “A new government-led study has found that the nation’s blood supply is vulnerable to a tick-transmitted parasite that is widespread in parts of Minnesota and Wisconsin and seven Northeast states. The report reviewed 159 cases of babesiosis that have been traced to blood transfusions during a 30-year period from 1979 to 2009. At least seven of the cases occurred in Minnesota, and two of those patients died. Researchers say a rapid test is needed to screen donor blood for the parasite.”

What can I say? Even the best miss one now and then. And I missed this one. CNN’s Ed Hornick reports on Our Favorite Congresswoman proving her Tea Party bona fides by asking, “Why is there a Department of Education?” Says Hornick: “Bachmann told Sen. Jim DeMint’s forum Monday that if elected president she would look to get rid of the Department of Education, among other things. ‘Because the Constitution does not specifically enumerate nor does it give to the federal government the role and duty to superintend over education that historically has been held by the parents and by local communities and by state governments’, she said.”

Rachel Stassen-Berger and Baird Helgeson of the Strib set up Our Gal’s situation in advance of tonight’s debate in L.A.: “Wednesday’s nationally televised debate, at the Ronald Reagan Presidential Library in Simi Valley, now becomes a test of whether she can take on the two newly dominant figures in the race: former Massachusetts Gov. Mitt Romney and the man whose late entry into the race has deflated Bachmann’s post-Iowa momentum and captured the hearts of many conservatives, Texas Gov. Rick Perry. ‘This debate is really important for her because she got a little bit of momentum coming out of Iowa, but clearly that has dissipated,’ said Norman Ornstein, a congressional watcher with the American Enterprise Institute for Public Policy Research.”

Maybe Rick Perry will stop by Minnesota and lead a prayer for rain. The AP says: “In its weekly crop weather report for Minnesota, the U.S. Department of Agriculture said Tuesday that topsoil moisture supplies were rated 7 percent very short and 23 percent short. Sixty-five percent were rated adequate and 5 percent surplus. That’s a slight decline from the previous week. Average temperatures were 3 degrees above normal, continuing a pattern of above-average temperatures and below-average rainfall.”

Mike Kaszuba of the Strib reports that Senate Majority Leader Amy Koch can’t remember ever meeting Zygi Wilf: “In April, with the Legislature in session, Wilf … made a widely reported visit to the State Capitol to meet with legislators and held a news conference with Sen. Doug Magnus, R-Slayton, a co-author of the Vikings’ stadium legislation. Koch said she didn’t meet with him that day because the state’s budget deficit was more pressing. … She now wants a countywide voter referendum for any Vikings stadium plan. Requiring a public vote, with public opinion polls showing widespread opposition to using taxpayer money for a stadium, could jeopardize the project. Koch said she remains opposed to using direct tax dollars for the project and would examine closely any plan that proposed user fees or other indirect taxes as part of the state’s $300 million contribution to the stadium.” But Amy, Zygi’s a “jobs provider.” I assumed you had had him over for breakfast and a complimentary manicure.

Have you applied an “orthogonal perspective” lately? In a Strib commentary,  St. Thomas prof Fred Zimmerman is unimpressed with the quality of the average American worker: “[W]e can wonder if today’s high unemployment can be influenced by stimulus, or by quantitative easing, or lower taxes, or higher spending, or any other public policy.
We may have to deal with the reality that with our high costs, expensive health care, feeble education and marginal work and personal habits, the American worker may not be as valuable in the world marketplace.”

The Fairgoer vote on the gay marriage referendum got most of the attention, but other questions were put to the lumbering masses. Bill Salisbury of the PiPress writes:
• “Fifty-two percent of House poll respondents favored expanding gambling to provide additional state revenue.
• In the Senate survey, 48 percent said the state should not be involved in building a new Vikings stadium, 26 percent said the state should only provide roads and ‘infrastructure,’ 12 percent would allow cities or counties to increase taxes and only 8 percent supported having the state pick up one-third of the cost, which is roughly the proposal that lawmakers are considering.
• By a 49-39 percent margin, Senate polltakers oppose constitutional limits on state spending growth.
• By a 62-26 percent margin, those survey respondents favor changing teacher tenure so teachers are retained for performance, not seniority.
• When projected spending growth exceeds revenue, 57 percent of Senate survey respondents favor a mix of tax increases and spending cuts to balance the budget, while 30 percent favored cuts only and 12 percent called for tax increases.”

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Comments (6)

  1. Submitted by Greg Kapphahn on 09/07/2011 - 09:24 am.

    It seems to me that Mr. Zimmerman is looking at the wrong side of the management desk for the source of America’s economic problems.

    Currently a huge portion of American Business is busy trying to wring the last few years of profit out of manufacturing the equivalent of buggy whips.

    Perhaps it would be worth the while of America’s corporate boards and shareholders, as they work so diligently to “maximize shareholder value,”

    to consider outsourcing their management and CEOs, or at least importing foreign management and CEOs to run their companies.

    After all, it seems clear that it is the failure of the American manager/CEO class that is the true source of our country’s economic difficulties,

    A bit of checking clearly reveals that foreign-born (even when they’re US trained) CEOs and managers are often willing and happy to work for far lower salary/benefit packages than the American variety.

    (Lacking typical American upper class psychological dysfunctions, they don’t base their entire sense of self worth, nor the satisfactions of their lives solely on the level of compensation they receive from their work.)

    Furthermore, bringing in CEO/manager types from rapidly-developing countries where growth is rampant often means those folks are open to and likely to put into place the kinds of innovative policies, processes and management procedures that would bring about the rebirth of the companies they manage.

    This would be an important change from our current crop of American managers and executives who largely seem to be hunkered down trying to figure out how to prevent change, lest they be disenfranchised by it, and are, instead, trying to squeeze more and more out of their workers and customers (whether on American or foreign soil) in order to raise profits and, thereby, their own compensation,…

    while, at the same time, allowing and even demanding that the communities around them and the infrastructures necessary to support their business concerns crumble to dust.

  2. Submitted by RB Holbrook on 09/07/2011 - 10:50 am.

    Professor Zimmerman, I’m unimpressed with the quality of American academics who write bromides blaming the lower-orders for the problems of the American economy. Lord knows that predatory finance or management focused on the next quarterly return to the exclusion of all future palnning couldn’t be to blame. No, it’s all those little people who wnat some material advantages in life, who maybe want to be treated with–wait for it–“dignity” who have messed everything up. Buck up, proles, and maybe you’ll get your reward.

  3. Submitted by Bernice Vetsch on 09/07/2011 - 12:20 pm.

    Mr. Kocherlakota’s opinions about economic stimulus (we don’t need anymore!?!?!?)were apparently formed by earning his Ph.D. at the University of Chicago where, apparently, Keynes was written out of the History of Economic Theory texts and replaced by Ayn Rand and Milton Friedman.

    It’s the only explanation I can see that would explain why U of Chicago graduates cannot see that Keynes’ theory was responsible for the great economy we had for the decades prior to Ronald Reagan’s debut AND for the Marshall Plan that allowed Europe to build the most successful– and at the same time most socially responsible and generous– economies in the world.

    We do really need a massive stimulus, Mr. K., in the form of building a new energy infrastructure based in renewables, of repairing and improving our transit/transportation infrastructure, providing grants or low-interest loans to start-up companies instead of tax breaks to polluting corporate giants, and making higher ed free.

  4. Submitted by greg copeland on 09/07/2011 - 12:46 pm.

    I hope Metro-Dome Chairman Ted Mondale has time in his busy schedule, given his new full time job, to tell his part-time boss, Governor Mark Dayton, that ONLY 8% of MN Senate State Fair Poll respondents support giving Zygis’ Vikings up to(approximately $300 million)one-third of the costs of a new stadium from our near empty State accounts.

    Good thing Ted fixed the roof and bought new turf looks like Zygi may want to sign a new lease on the Dome after all.

  5. Submitted by Randy Allar on 09/07/2011 - 01:00 pm.

    Maybe Governor Perry should forget about praying for rain in Minnesota. Look how well that turned out in Texas.

  6. Submitted by Jim Roth on 09/07/2011 - 06:19 pm.

    Bernice, I have read many of your comments and this one, among many, is spot on. It’s disappointing to me that so few are interested in learning from the past.

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