Subject: Bernanke, Glass-Steagall 2.

0, and housing reform (AEI Economics Ledger) If you have trouble reading this message, click here to view it as a web page.

IN ONE PLACE -- AEIs best work on the Fed, Bernanke, and quantitative easing

Bernanke fly-around
Chairman Bernanke told Congress that easy money would continue for the foreseeable future during his biannual Humphrey-Hawkins testimony. Time for the Fed to go dark. Steve Oliner: Now that Bernanke has had some success in conveying this message, it might be best to just stop talking. . . . Nothing more can be revealed now that will clarify the situation. The market craves certainty about the future, but Bernanke cant provide that. The end of taper talk, for now. John Makin: There are no good alternatives facing Bernanke for now. The best he can do is admit to the slowing economy and return to the original QE 3 messaging plan: monetary policy will remain highly accommodative until unemployment comes down to 6.5% or below and/or inflation gets above 2.5%. But QE will end eventually. John Makin: When it ends is what matters. If, as is currently the case, the economy is slowing, inflation is falling, and fiscal drag is heavy, ending QE, say in September, as some have said the FOMC will do, surely is an unwarranted reduction in stimulus. If you are starting up a steeper hill, you dont lift off of the accelerator. You push down harder. 10 questions Congress should have asked Bernanke. Abby McCloskey: Mr. Chairman, what does success for QE look like? Is the US at a risk of another recession if we taper too quickly? If you could offer your successor one piece of advice on QE, what would it be? IN CASE YOU MISSED IT -- Four key takeaways from Bernankes testimony

Housing reform
There are now three bills before Congress on housing reform. But only one, the Hensarling bill, eliminates the government guarantee. TESTIMONY BEFORE HOUSE FINANCIAL SERVICES -- Peter Wallison: History should tell all of us that the [Hensarling] bill now before this committee is the way to go. It would take the government out of most of the housing finance market, although it would provide for a new and more prudent FHA for firsttime low-income home buyers. NEW RESEARCH -- Edward Pinto: [Hensarlings] Protecting American Taxpayers and Homeowners Act of 2013encompasses the most significant and common-sense Federal Housing Administration (FHA) reform legislation in memoryUnfortunately, [the Senates FHA Solvency Act of 2013] is deeply flawed and does not address the need for fundamental reform of the FHA. The White House sits out. Phillip Swagel: The Hensarling bill provides a comprehensive and thoughtful proposal for a fully private system that serves as a benchmark in the policy debate. The Obama

administration has not yet weighed in with its preferences for reform. Engagement from the administration would be the natural next step.

Its back
The too-big-to-fail debate rages on, with Senators John McCain and Elizabeth Warren introducing the st 21 Century Glass-Steagall Act. Is Glass-Steagall the answer? James Pethokoukis: While Glass-Steagall was law, the U.S. financial system faced several severe shocks. . . . Then came the 20072009 meltdown, but its hardly obvious the Glass-Steagall repeal was to blame.

Spotlight on crony capitalism

Former Consumer Finance Protection Bureau employee makes money off rules he helped create. Stan Veuger: Mr. Date had started his own firm . . . which will become the leading originator of nonqualified mortgages. . . . His new colleagues include quite a few of his old colleagues, including the CFPBs chief of staff, its senior advisor for mortgage servicing and securitization, and its regulatory senior council.

In other news
How much is a public pension worth? Andrew Biggs: The National Income and Product Accounts will adopt a market approach for valuing both pension liabilities and the implicit compensation that public employees receive through their pensions. Jefferson wouldnt recognize us. Stan Veuger: The U.S. economy bears little resemblance to the Jeffersonian ideal populists on both left and right sometimes appear to strive towards. VIDEO -- Jeffrey Eisenach discusses bringing the Internet to American classrooms. VIDEO -- Aparna Mathur looks at the prescription drug trade in India.

Mark your calendar

7.21 The three-year anniversary of the Dodd-Frank Act 7.25 Jobless claims data released 7.31 AEI Event: International conference on collateral risk: Moderating housing cycles and their systemic impact

Until we meet again

Get up-to-the-minute updates @AEIecon Read more from the American Enterprise Institute economic policy team at www.aei.org/economics. Contact Abby at abby.mccloskey@aei.org if you have questions for the economics team. Sign up for a weekly copy of the LEDGER here. If you were forwarded this message, click here to subscribe to AEI newsletters. Click here to unsubscribe or manage your subscriptions. American Enterprise Institute for Public Policy Research | 1150 Seventeenth Street, NW, Washington, DC 20036 | 202.862.5800 | www.aei.org