The most powerful people - Assignment Example

The Most Powerful People The Most Powerful People Explain why these three men (the 3 bankers who are listed as the 4th, 5th, and 6th most powerful people in the world) might be considered more powerful than most countries leaders. The Newsweek Magazine of December 2008 listed central bankers Ben Bernanke of the U.S. Federal Reserve; Jean-Claude Trichet of the European Central Bank (ECB); Masaaki Shirakawa of the Bank of Japan, as the fourth, fifth and sixth powerful people in the world respectively (Samuelson, 2008).

These central bankers play major roles in addressing the global financial crisis. They are the ones who take part in designing the country’s monetary and fiscal policies which dictate the path the economy is going to take. The policies that they implement do not only affect their countries but it also impacts the global economy. Time Magazine in 2009 described Bernanke as a visionary who “conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero.

He didnt just reshape U.S. monetary policy; he led an effort to save the world economy” (Edroso, 2009). Trichet is known as the “Euro fighter” who defended the low inflation on the euro (Stock Market Today, 2011). The Stock Market Today states that “Trichet’s every move affects the euro zone countries” (2011). On the other hand, Shirakawa has a vital role in influencing Japan’s future economic prospects. He is also known for devising an unconventional monetary policy which was later on adopted in modified forms by the US and UK (Chung, 2011).2. Explain how or why, during the recession of 2008–09, banks of the world seemed to unite on cue to lower interest rates worldwide.

During the recession of 2008 to 2009, banks of the world lowered their interest rates. This move was done to make borrowing cheaper and encourage businesses and consumers to borrow to spur or increase economic activity. More goods will be produced by businesses and bought by consumers. If there is a demand to produce more, then it will also create jobs which will positively affect the economy and eventually rise out of the recession.3. Provide 2-paragraph policy on how you would improve U.S. monetary policy.

Use APA style to cite any references that may support your policy or a current policy that you are refuting. One of the reforms adopted by the Fed to improve the U.S. monetary policy is the quantitative easing whereby the government injects billions of dollars of fresh cash in the economy to pump up economic growth (Sanati, 2011). However, this policy is not proven effective as pointed out by Sanati since the economy is still not performing well as shown by the negative economic indicators, including a very low job growth (2011).

Bernanke though is still convinced that quantitative easing would help the economy to recover. One is of the opinion that Bernanke is right in instituting this policy because it will result in banks having access to cheap cash which they can lend out to borrowers at a lower interest rate. This can greatly help the economy because it can heighten business activity and eventually lower the unemployment rate (Sanati, 2011). Another reform that may be done to improve the monetary policy of the government is to reduce the subsidies given to agriculture, real estate and the oil and gas industry (Wien, 2011).

Wien goes on further to say that reducing the subsidies in these sectors can redirect government spending to infrastructure which can create more jobs, which is a boost to the economy. Wien asserts that tapping domestic sources of energy will also create employment and reduce the dependency to foreign suppliers; thus, saving billions of dollars for the government (2011).ReferencesChung, H. S. (2011, February 7). Masaaki Shirakawa, Governor of The Bank of Japan. Retrieved September 21, 2011, from The Foreign Correspondents Club of Japan Web site: http://www.fccj.or.

jp/node/6349Edroso, R. (2009, December 16). Ben Bernanke named Time Man of the Year, in honor of achievements TBD. Retrieved September 21, 2011, from Village Voice, LLC Web site: http://blogs.villagevoice.com/runninscared/2009/12/bern_bernake_na.phpSamuelson, R. J. (2008, December 19). Economic Triumvirate. Retrieved September 21, 2011, from The Daily Beast Web site: http://www.thedailybeast.com/newsweek/2008/12/19/economic-triumvirate.htmlSanati, C. (2011, June 8). Sizing up the Feds few options.

Retrieved September 21, 2011, from CNN Money website: http://finance.fortune.cnn.com/2011/06/08/sizing-up-the-feds-few- options/Stock Market Today. (2011, September 18). The "euro fighter" Trichet. Retrieved September 21, 2011, from Stock Market Today Web site: http://www.stockmarkettoday.cc/the-euro- fighter-trichet-2.htmlWien, B. (2011, September 6). End of summer dispair. Retrieved September 21, 2011, from CNN Money Web site: http://finance.fortune.cnn.com/2011/09/06/end-of-summer- despair/