27 January 2010

Hold the Line

We all know my personal thoughts on Federal Reserve Chairman, Ben Bernanke. And now that he's up for a vote to take on another term as chairman, a lot of folks are chiming in. There's some great and varied opinions in the New York Times today, but Yves Smith from Naked Capitalism said some of the most understated, yet most important facts about Bernanke and the reason he should not be in charge any longer. Here's Smith's take:

Ben Bernanke, a major architect of the financial crisis, bears significant responsibility for our economic woes. He provided the intellectual justification for the Greenspan Fed’s bubble-stoking, dot-bomb era super-low interest rates.

He also embraced the Greenspan policy of letting the inmates run the financial system. For instance, even the bank-friendly Office of the Comptroller of the Currency took its responsibilities to monitor and restrain subprime lending far more seriously than the Fed did.

Mr. Bernanke’s “defense” is that having helped produce the worst meltdown since the Great Depression, his actions kept it from being as awful as it could have been. But he was slow to recognize the severity of the crisis, then engaged in emergency, ad hoc measures of dubious legality. We now have a financial system running on subsidies so extensive that it’s the equivalent of a patient attached to an oxygen supply, with 24/7 nursing to make sure nothing further goes amiss. Yet the Fed and the banksters stand united in proclaiming the industry to be healthy, a “diagnosis” based on ludicrously lax “stress tests.”

A “no” vote will rightfully challenge the Fed’s and the administration’s allegiance to Wall Street over Main Street.

All opinions are valid in many different ways, but it's refreshing to hear someone come out and and state so clearly that Bernanke has been nothing short of a true failure in protecting this country and its people.



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