Boston Fed chief Rosengren: Austerity hurts
By 
Eric Rosengren, president of the Boston Federal Reserve Bank, has rarely shied away from controversial issues, and he’s showing no sign of stopping now. In a speech today at a banking conference in Italy, Rosengren criticized federal spending cuts and tax increases. He said moving too aggressively to cut the budget could have a “dampening effect” on the economic recovery.
Rosengren acknowledged that he is wading into areas that are outside the strict purview of the Fed. “Fiscal policy is obviously the jurisdiction of the legislative and executive branches of government,” he said in his speech. “But given the economic realities, I would urge policymakers to consider scenarios where some elements of fiscal rebalancing take effect only after the economy has more fully improved, and the possibility of a less restrictive fiscal stance until that time.”
Rosengren has developed a reputation as an activist Fed chief, someone who has ranged well beyond the narrow bounds of monetary policy to speak out on real-world issues of housing, poverty, and the shortage of skilled workers in certain sectors.
In his speech today in Milan, he pointed out that cuts in US government spending over the last three years in percentage terms have been greater than those in the United Kingdom or in countries using the euro, places where he said austerity policies have received more attention. In speaking out on government spending, Rosengren is wading into an area that has been a flashpoint for debate among political leaders in Washington and in the halls of academia, where a study by noted Harvard economists has come in for sharp criticism.
–MICHAEL JONAS
BEACON HILL
A Democratic source tells the Chicago Sun Times that Gov. Deval Patrick is under consideration to head the Justice Department after the furor over Eric Holder cools down a bit. Yesterday’s Download explored this possibility.
The Massachusetts Senate unveils its budget proposal, which closely resembles the version passed by the House, WBUR reports.
A legislative committee hears bills that would close the “Lantigua loophole,” the Eagle-Tribune reports.
The Cape Cod TImes questions the role of clerk magistrates in the court system after the state judicial system took five years to remove Barnstable District Clerk Magistrate Robert Powers after a series of complaints about his tenure. In our Spring 2011 issue, CommonWealth took a deep look at clerk-magistrates, who are appointed for life and many of whom get their posts through political connections.
MARATHON BOMBINGS
CBS News reports that Dzhokhar Tsarnaev left a note written on the inside of the boat where he was seized.
The One Fund Boston will distribute payments to bombing victims who received outpatient care in addition to compensating those who were hospitalized and the families of those killed.
MUNICIPAL MATTERS
An accounting expert brought in to review Westport’s finances said the town needs to work on its ethics compliance.
The attorney general has rejected an appeal by the Patriot Ledger charging that Scituate selectmen violated the Open Meeting law when it met in private to negotiate the resignation of former state rep. Maryanne Lewis from the town’s housing authority.
NATIONAL POLITICS/WASHINGTON
President Obama sacks the IRS chief after the agency admits its agents improperly singled out conservative nonprofits for review, Talking Points Memo reports. Time’s Joe Klein sorts out the Obama scandals. The woman who heads the IRS nonprofit screening division in Cincinnati that is at the center of the growing scandal donated at least $2,000 to Obama’s first presidential campaign.
The federal historic tax credit, a key to Gateway City revitalization, may be in trouble in Washington, suggests a column in Governing that offers little evidence.
The Globe, in an installment of its “Broken City” series on dysfunction in Washington, says congressional Republicans have submitted more than 1,000 questions to Gina McCarthy, President Obama’s nominee to head the Environmental Protection Agency.
US Rep. John Tierney files a bill that would require that gun manufacturers design weapons so that only the owner could fire them, the Salem News reports.
The AP scandal threatens freedom of the press and democracy, writes Carol Rose, the executive director of the ACLU of Massachusetts.
Minnesota becomes the 12th state to allow same-sex marriage, Governing reports.
Mitt Romney is building a home in Utah.
ELECTIONS
In a new wrinkle in the saga of the big tax credit GOP Senate candidate Gabriel Gomez secured for not altering his Cohasset manse, the Globe says he stiffed an appraiser on a $1,000 bill related to the tax credit.
The Globe reports that Gomez’s views remain murky on several issues related to abortion.
BUSINESS/ECONOMY
Bedford-based iRobot has been selected to provide $7.2 million in defense and security robots to the government of Brazil, which is hosting a papal visit in July as well as the 2014 World Cup and the 2016 Summer Olympics.
A casino bill is rejected on a 23-22 vote by a special House panel in New Hampshire, but the full House is still expected to take the measure up next week. The bill has already passed the Senate, the Eagle-Tribune reports.
EDUCATION
Roxbury Community College aims to name a new president by June.
John McEwan, president of Cardinal Spellman High School in Brockton and a well-known educator in the area, died yesterday after a four-year battle with cancer just a little more than a month before he was set to retire.
HEALTH CARE
Daniela Drake, a physician, explains why she’s not having a preventive mastectomy.
The House voted for the 37th time to repeal the Affordable Care Act, aka Obamacare.
ENERGY/ENVIRONMENT
Two men in a lobster boat bearing a sign that read “Coal is Stupid” attempted to block a giant tanker delivery of coal to the Brayton Point Power Station in Somerset.
Fish and other ocean animals are migrating in search of cooler waters as the Earth warms, which is causing havoc for associated fishing industries in New England and the Mid-Atlantic.
MEDIA
CommonWealth’s Michael Jonas, who is serving as ombudsman for the Dorchester Reporter during the special election for the First Suffolk state Senate seat, praises the paper’s coverage of primary election night, but wonders whether it was hamstrung in its ability to report every aspect of the campaign leading up to it.