the humphrey-hawkins act require the government to follow a man did. so often, these goals conflict with one another matter how knowledgeable are well intentioned, the fed can't meet either gold very well. i am not one to blame chairman ben bernanke for this because congress is hutu plan to set up these conflicting targets 30 years ago. it is imperative we get off of this inflationary-deflationary roller coaster such as the one that we are living to right now. when it comes to managing the national currency, virtue has a central role. at the end of the day, the central bank cannot cheat or paper over problems. sooner or later, such decisions will catch up with us and the victims will be the people. long-term economic growth and rising living standards are the major purposes of government and they require a currency that holds predictable value. it is time conservatives broke through the wall of silence and started a national dialogue aimed at ending the cycle of instability and restoring the dollar standard of value. the course of our current course of

i mean, part of your responsibility under humphrey-hawkins is to try to make progress towards these goals and it seems just setting monetary policy, you know, won't necessarily solve the problems of the full employment and the growth and the production and the balance of budget and i didn't know if that was offbudget for you or them or if there is any consultation going. obviously, if you have any comments on your point of view on some of these expenditures of what's going on, i'd be interested in hearing them as well. >> the federal commission is nonpartisan. as i speak to members of congress and their staff, in terms of my policy positions, because i'm nonpartisan i don't -- i try not to get involved of the details of specific programs, fiscal programs in particular. but i have spoken to the issue of fiscal sustainability which i did again today. and the importance of when thinking about the programs that one is undertaking, the time frames and the costs is to think of the federal budget to make sure we have a trajectory that will be sustainable in the medium term. and i've made that po

. >> isn't it congress with the old humphrey hawkins act, passed back in 1978, create a dual mandate, said get inflation down, keep prices stable on the one hand, keep the unemployment low on the other hand. are those conflicting? in terms of an audit, don't you need to repeal humphrey hawkins and give the fed a clear mandate to stabilize the currency, value of money and prevent inflation. >> i don't think that would be a bad idea. i think the audit could lead to something like that. first, we want to know what they've been doing. those are impossible mandates, full employment, they haven't done very well there. they want stable prices. stable prices of money, back in the '70s, we had interest rates of 21%, not less than 1. it's a total failure, they give us inflation, recessions, give us financial crisis, given us a depression and nobody says, hey, what's going on here. this is the first time the american people -- i spoke to a bunch of high school kids and they're ecstatic about the issue of the federal reserve. i just can't believe it. young people and a lot of others are waking up

>> the law of the humphrey-hawkins law say the goals of monetary policy should be full employment and price stability. that's what we're looking to. on the issue of taking away other powers, i want to point out this is what was happening a few years ago in a number of countries, for example the uk. >> please answer my question. we know what the law is. i'm asking for your opinion. >> think that law is appropriate and i follow that law. >> you follow the law to the letter. >> to try to achieve full employment and price stability, yes. >> okay. last question then since my time is running out. yesterday you made it clear that you think that the fed has the tools to stop the coming inflation by controlling all the new money you have printed. you may be right. but do you have the will as former chairman volcker did to tighten even if the economy is still weak? >> senator, it was in 1978 that in the humphrey-hawkins bill that congress put in the exclusion for monetary policy in the gao audit bill before volcker came in. he took those decisions because congress didn't intervene although plen

i am a part of their responsibility under humphrey-hawkins is to try to make progress toward these goals and it seems to me just setting monetary policy you know will necessarily solve the problems of the full employment, the growth production in the balance of trade and budget. i did not know if that is just off balance for you and for them, or if there is any consultation going on. obviously if you have any comments about your point of view on some of these expenditures, i would be interested in hearing them as well. >> of course the federal reserve is nonpartisan an independent. i to speak to the president's advisers periodically as they speak to members of congress and their staff. in terms of my policy positions, because i am nonpartisan, i try not to get involved in the details of specific programs, fiscal programs in particular but i have spoken to the issue of fiscal sustainability which i did-- begin today and the importance of when thinking about the programs that one is undertaking, timeframes, cost in silwan to think about the implications for the federal budget, to make sure

i am a part of their responsibility under humphrey-hawkins is to try to make progress toward these goalsand it seems to me just setting monetary policy you know will necessarily solve the problems of the full employment, the growth production in the balance of trade and budget. i did not know if that is just off balance for you and for them, or if there is any consultation going on. obviously if you have any comments about your point of view on some of these expenditures, i would be interested in hearing them as well. >> of course the federal reserve is nonpartisan an independent. i to speak to the president's advisers periodically as they speak to members of congress and their staff. in terms of my policy positions, because i am nonpartisan, i try not to get involved in the details of specific programs, fiscal programs in particular but i have spoken to the issue of fiscal sustainability which i did-- begin today and the importance of when thinking about the programs that one is undertaking, timeframes, cost in silwan to think about the implications for the federal budget, to make sure

. >> this humphreys hawkins, do we take it live both days? >> i'm sure we will. usually 10 a.m.: lely 10:00 a.m. >> do we get a break here? >> i thought he was going to say does he pave a path out of quantitative easing? >> i saw the notes. they did request us for the top of the 9:00 and 10:00. i don't know about the 11:00. >> i wasn't interested in what he was going to say. will he preempt -- >> it never gets old. >> a quarterly survey of forecasters finds the recession's grip on the economy appears to be easying but has not ended. it suggests a profitability remains weak in q2. 45% say the worst is over for the economy. while the other 55% argue the low point has not been hit. >> speaking of the economy, the white house sees economic growth, showing signs of progress. the white house budget director said second quarter gdp numbers are likely to look a lot better than first quarter. you saw paulson with the trade balance. even if it's negative, you add it into the gdp. you see who else came around last week? roubini. >> he later said his comments were taken out

. >> the other big news, of course, is ben bernanke testifying day two for the humphrey hawkins testimony. he is back for the senate banking committee. let's return to that and listen. >> i would further and say, if you had the systemic risk resolution authority, that the fed's ability to lend to a failing systemic institution ought to be curtailed, so that it could be invoked only at the request of the resolution authority as a support of their operations. so i would make our interventions of the sort we did with aig, i would make them illegal. >> well, i -- appreciate the fact that you could envision, even going beyond the -- what we have now. because we've got to address successfully this issue of moral hazard, where we're perpetually in a cycle that doesn't serve our financial system or citizens, and so i'll look forward to being in attendance when that speech occurs, and i thank you very much for your testimony. >> thank you. >> thank you, senator murphy. senator? >> thank you very much, mr. chairman. chairman bernanke. welcome to the committee. it's always good to be in touch with y

after all, today we meet to receive the semi annual monetary policy report mandated by the 1978 humphrey hawkinsmployment act. if the xwoel goal is still employment, the news today is rather grim. unemployment in june was 9.5%, highest level in 26 years. most economists from the fed itself believe that it could top 10% before the end of this year. meanwhile, americans who have lost or are worried about losing their jobs, their homes, retirement security have watched while others wreep the benefits of our government's response. they hear about a stock market rally and wonder if it will ever be enough to make up the retirement savings that have been wiped out. some cases almost within minutes. they hear about million dollar bonuses going to ceos whose firms caused the melt down in the first place while rank and file workers have lost a nation, laid off or forced to accept pay cuts. they hear about large financial institutions, large banks bailed out with billions of taxpayer dollars and government-backed credit and now reporting billions of dollars in profits but they still can't get a loan themse

this is the old humphrey hawkins.ore the house financial services committee today, starting at 10:00 a.m. eastern time. >>> california governor arnold schwarzenegger and the state's legislative leaders reaching a deal to close california's $26 billion budget shortfall. >> this should make government more efficient and also be cutting the waste, fraud and abuse in some of the programs. and so all around, i think this is a really great accomplishment. >> the agreement is not a done deal. it still has to make it through both houses of the legislature. but it would be be the first step toward ending the ious california has been issuing. it includes billions of dollars in cuts, a combination of borrowing, shifting money from other government accounts and speeding up the collection of certain taxes. tonight on cnbc we have a special report. it's "california in crisis: how the golden state plans to lift itself up and shine again." we'll be speaking to two leaders of the state's push to get back in control. you can tune in he