Tags: Whalen | Fed | job | rates

Carrington's Whalen: White House, Fed 'Stifling Job Creation'

Monday, 13 Jan 2014 11:28 AM

By Dan Weil

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The policies of the Federal Reserve and Obama administration are utterly inadequate to boost economic growth and stave off deflation, says Chris Whalen, managing director of residential real estate firm Carrington Holding Co.

"The policies being followed at the Fed and White House are stifling job creation, even as they encourage moral hazard and the growth of new bubbles in the financial sector," Whalen writes on Breitbart.

The economy added only 74,000 jobs in December.

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"The slew of new regulations put in place in Washington since 2008 makes it virtually impossible for more than half of all adult Americans to qualify for a home mortgage," Whalen explains.

"The fact of a weak jobs market and a net exodus of adults from the work force also implies a smaller market for homes."

Meanwhile, the Fed is keeping short-term interest rates near record lows. That policy is "actually encouraging deflation in the U.S. economy by robbing savers of badly needed income," he writes.

"The neo-Keynesian, demand-side mindset of Chairman [Janet] Yellen and the rest of the FOMC [Federal Open Market Committee] does not allow them to see or accept that low rates are actually hurting employment, credit, and capital formation."

Star investor Jim Rogers, chairman of Rogers Holdings, is just as critical of the Fed, if not more so.

He tells British financial website Mineweb that outgoing Fed Chairman Ben Bernanke has set the stage for the collapse of the central bank within the next decade, and has turned the nation's balance sheet into "garbage."

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