Only ONE Democrat (Merkley (D-OR)) Says No to Bernanke
by fairleft2, Wed Dec 16, 2009 at 11:48:21 AM EST
Unbelievable. Et tu Sherrod Brown? Why would any reality-based person reconfirm such a catastrophically terrible economic manager? I mean, look at that unemployment rate, the flatulent economy, or just read about his and other conventional thinkers' gigantic MISS on the real estate bubble. The whole corrupt financial sector takeover of the political system is responsible for our deep recession, of course, but why shouldn't Bernanke take a fall for his ostrichy lack of foresight? Why shouldn't somebody take a fall for the catastrophically bad economic forecasting, the record-breaking giveaway to incompetent financial institutions? And then there is pwoggieland's utter silence (except for David Sirota and, I guess, Jane Hamsher) and worse (see Dean Baker below on 'liberal' NPR 'reporters' openly ridiculing Senator Jim Bunning, a Republican Senator willing to criticize Bernanke, giving him an F- on his management of and responsibility for the worst financial crisis since the Great Depression). This is why common sense people say there is no left in the U.S., and why we so desperately need one. Here's Merkley:
Tomorrow, I will vote against confirming Ben Bernanke as Chairman of the Federal Reserve. The reason, in short, is that as Chairman, Dr. Bernanke failed to recognize or remedy the factors that paved the road to this dark and difficult recession. Following our economic collapse, it is also apparent that he has not changed his overall approach to prioritizing Wall Street over American families. . . .
Our nation is just beginning to emerge from the greatest financial crisis since the Great Depression, and there is no guarantee we will continue on the road to recovery over the long or short terms. Unemployment remains far too high, credit is unavailable to too many businesses, and families are plagued by falling home prices and high foreclosure rates. Even as we move forward with our efforts to get our economy back on track, it is critical we carefully examine what led us to this point.
For too many years, federal regulators turned a blind eye to signs of an impending financial crisis. Tricks and traps proliferated in the credit card and consumer lending industries. Predatory mortgage loans exploded, fueling an unsustainable housing bubble. Regulators lifted rules requiring banks to keep adequate capital, and a laissez-faire approach to securitization, derivatives, and proprietary trading encouraged excessive risk-taking on Wall Street. As a member of the Board of Governors, Chair of the Council of Economic Advisers, and then ultimately as Chairman of the Board of Governors, Dr. Bernanke supported each of these decisions, failing to take the necessary precautionary steps that could have averted or mitigated financial collapse.
These failures are very relevant to the future. We need economic leaders who understand that the ultimate goal of economic policies and the key to meaningful economic recovery should be financially successful families, not oversized Wall Street profits.
Indeed, it should be recognized that although Wall Street prospered in the short-term from reduced leverage requirements, securitization of faulty mortgages, and the explosion of derivatives, Americans did not. The expansion that occurred from 2002 to 2007 became the first economic expansion in which working families were worse off at the end than at the beginning. This is not a path that we can afford to travel again.
The following are three short posts from Dean Baker on December 4, after an appearance by Bernanke before the Senate banking committee:
NPR Covers Up for Bernanke Big Time: Still Has Not Noticed Housing Bubble
Morning Edition did a great effort to cover up for Ben Bernanke's responsibility for the Great Recession telling listeners that the public doesn't want to engage in the blame game. (This is reminiscent of the great line from Monty Python: "let's not argue about who killed who.") The reporters actively ridiculed Senator Bunning who blamed the Fed for the crisis.
Of course, Mr. Bunning is exactly right. Bernanke chose to ignore an $8 trillion housing bubble that was easy for any competent economist to recognize. It was inevitable that the collapse of this huge bubble would lead to a severe downturn. The bubble was driving the economy, creating more than a $1 trillion in annual demand through its impact on residential construction and consumption. There is no easy way to replace this amount of demand, which evaporated when the bubble collapsed.
All of this should have been evident to Bernanke years ago. He and his colleagues at the Fed should have taken steps to prick the bubble before it grew to such dangerous levels. The failure of the Fed to act has had disastrous consequences for the country.
It would be difficult to imagine how someone could fail more completely in their job than Bernanke did. Yet, NPR thinks it is ridiculous to question whether Bernanke should be reappointed. This is an excellent display of the different standards of accountability in Washington and the world where most people live and work.
Foreign Policy Honors the Captain of the Titanic for Getting Most Passengers Safely Into Lifeboats
Yes, you may have thought it was impossible, but the painfully absurd is the reality here in Washington Policy Land. Foreign Policy picked Ben Bernanke, the man's whose inept management at the Fed (second only to Greenspan) brought us the Great Recession as the greatest thinker of 2009.
While Bernanke certainly deserves some credit for preventing his failure from leading to a complete collapse of the financial system, a greater thinker might have thought of a way to preserve the financial system that didn't leave the Wall Street boys richer than ever and 15 million people out of work.
If Bernanke Did Not Know the Fed's Mission, Would That Be News?
Not at the WSJ, nor it seems anywhere else. Yesterday, Federal Reserve Board Chairman Ben Bernanke referred to the "our dual mandate, which is growth and inflation." In fact, the dual mandate is full employment (defined as 4.0 percent unemployment) and price stability. Presumably Bernanke had unemployment in mind when he said "growth," but it striking that he would not use the right term. The two are of course not synonymous.