Marshall Appears on Fox Business

NEP’s Marshall Auerback appears on Fox Business News weighing in on QE and Markets. You can view the segment here.


17 responses to “Marshall Appears on Fox Business

  1. Well that anchor was certainly terribly uneducated…having said that I’m glad Marshall treated her with respect.

  2. Two weeks ago I posted a request for comment/analysis of David Stockman’s NYT oped
    by the staff of NEP (Black, Hudson et al). Was this clip of Marshall on Fox Business it?
    I’m sure there are many readers of this web site who would appreciate your insight on Stockman’s opinions. I know I would. Any chance that’s going to happen?

  3. Here’s the confusion, one I think MMT and Marshall here are nebulous on, the interviewer thinks QE is required for low interests rates – true or not?

    • My question as well.. for some reason it didn’t get posted here?

    • The Fed first decides where to set the interest rate; QE is how they effect this policy. They want to keep interest rates low (either to improve employment or to facilitate continuing financial fraud, depending on who you ask) and they do this by ensuring that there are plenty of excess reserves in the system. Rather than just give the money to the banks, they trade the new reserves for T-bills or other assets (recently RMBS). That is why Marshall calls QE an asset swap. As he points out, this does nothing for the economy since the banks’ reason for not making loans is a lack of credit-worthy people seeking loans, not a lack of reserves to loan out.

      I think what the excited interviewer was trying to say was that if the Fed raised interest rates, Treasury would not be able to borrow as much money to fund fiscal spending, since the cost of that financing would be increased. She errors in thinking that the USG (Treasury and Fed together) faces a financial constraint on spending. The USG will always be able to borrow to cover its debt obligations because T-bills are the safest investment possible and many institutions and investment funds are required by law to hold them. Also, the Fed provides a guaranteed secondary market for Treasury notes, so buyers of USG debt know that they will always be able to convert them into cash, either through the repo market or by selling them to the Fed. So there is no reason why the USG should be worried about debt or deficits right now, or what the interest rate is, just on creating jobs and thereby increasing effective demand. (Or, of course, we could do the more rational thing and just directly fund large stimulus programs. I would vote for elder care, education, renewable energy tech. development and infrastructure repair, funded directly by the creation of new reserves.)

      IMO, the problem with QE and low interest rates is that they allow for increased leverage to be used by hedge funds, traders, people designing CDOs etc., which tends to exacerbate the problems of speculative bubbles and the fraud that goes along with them. Higher interest rates don’t affect the USG’s ability to borrow, but they do make profitting from accounting-control fraud more difficult.

  4. Haha Marshall is ever the gentleman, politely disagreeing with the Fox lady who doesn’t understand the difference between QE and deficit spending.. I guess you’ve got to keep your cool if you want to keep coming back on TV.

  5. Regarding this same point.. can rates be brought any lower? Is the continued QE necessary to keep rates where they are or is this just above and beyond to push investors into different asset classes?

  6. My first thought was that anyone who agrees to an interview on Fox News has to be a masochist. However, Marshall kept his cool and sense of humor. He came out well ahead in confronting the female professional heckler, who completely lost it in a frenzy of ranting towards the end of the show.

    Well done Marshall Auerback.

  7. Well, Mr. Auerback, you are much too polite talking to people who don’t listen to your answers to their questions.

  8. WOW. A less cynical person might wonder how a people so clueless could get jobs hosting business shows, but I think the actual answer is that if they knew what they were talking about, then they wouldn’t have a show. How’d they even let Marshall on to begin with? If Marshall lets the cat out of the bag too many times, reality might start to hold.

  9. Wow! Is she awful, or what?

  10. Marshall, with all due respect, that wasn’t one of your best performances. The lady asked you 3 or 4 times to explain why the Fed wasn’t accommodating a larger deficit. You should have said: “quite the opposite!” Low interesting rates are actually contributing to a deficit that is too SMALL. The Fed should really be raising rates if they want to help create a larger deficit. Granted, you did begin to touch in it near the end, and you did seem to be finally getting into a groove, but by then it was too late.

    It would also have been nice if you had told them that the big scary debt clock that was shown prominantly on screen was actually a private sector savings clock 😉

  11. Man! That chick is like fingernails on a blackboard!!

    Bravo to Marshall for not just looking at her and saying “Just shut the f*ck up!!”

  12. Looking at the other comments here, I think a word or two in defense of the hosts is in order. I didn’t catch her name from the clip, the female host raised a nuanced point about Fed low-rate policy being accommodate of an expansive fiscal stance. Auerbach countered that such monetary accommodation isn’t strictly required in order for fiscal stimulus to happen. She wasn’t exactly wrong and Auerbach was right. The Fed is scattering rose petals before Congress practically begging for fiscal stimulus and Congress could adopt a more aggressive stance even if the Fed weren’t doing that.

    The host, McShane at the end, I think, was largely correct in observing that it was two people mostly saying the same thing arguing with each other.

  13. Can someone tell me what Auerback said around 1:25 min? He said the “March high ?????? orders are very poor.” What’s the missing word?

    Also, what’s the name of the female anchor?

  14. Great interview. I got a kick out of how shocked they were that Marshall didn’t agree with David Stockman. They didn’t seem quite prepared for that, lol.