Today President Obama gave Ben Bernanke four more years as Chairman of the Federal Reserve Bank. I, like a lot of people, think this was a good idea. Why change guys in the middle of an economic recovery?
My problem with the way we run monetary policy in this country is that too much responsibility is placed on our central bank for economic growth. That is not, in my opinion, a responsibility of the central bank. The bank should concentrate its energies on running monetary policy and protecting the integrity of the U.S. dollar.
Congress and the Obama administration should develop policies to encourage economic growth, not the Fed. But Congress enjoys having a whipping boy should their policies cause a financial crisis. Most people in the United States do not understand a word I am writing, and so Congress is free to play these games.
The Fed did not cause the financial crisis. I can fault them for playing politics with the integrity of the U.S. dollar, but the era of deregulation and the tearing down of those protections for the consumer of investment products must be put square at the door of the Congress. Reagan, Bush 41, Clinton and Bush 43 simply signed away the protections by pen or other means. The financial crisis was man made and the people that made it were in Washington, D.C.
The argument that government is the problem and not the solution is, in my opinion, a sick joke. Regulation of the economy is as necessary as the NFL officials that take the field every Sunday to control the game. We need regulation with real teeth and we need enforcement that is for real. We can fill a book or two with the stories of greed and dishonesty on Wall Street. Our problem is to get a Congress and President that will protect the consumer of investment products. The large pension funds around the country should find their voice, but the governors and trustees of these pension funds do not know which end is up either.
In the final analysis, it is the people that will have to find the muscle and the influence to make change happen. It can happen, we just need to get a few million people thinking the right way.
Stay tuned.
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3 comments:
What about inflation Moneythoughts? You forgot to mention inflation. My cost of living is going up and I am retired. Whose is going to keep inflation from destroying my purchasing power? Bernanke? Obama? Congress? Why don't you answer the hard questions? Anyone can take on the easy ones.
Yep, as usual, you are right again. The Fed didn't make this happen, however, they allowed it to happen. I put a ton of blame on the FED, after all, they are the ones that took the protection away from us and gave the high powered financial individuals the right to steal. They lobbied and got what they wanted as they went from president to president, from era to era. Whatever fit the times was what they went for and we ultimately paid and will be paying for it for a long long time. NOT one of these individuals has stoodup and said, you know what, we were wrong. No, instead they point fingers in the other direction saying "Billy did it". No, they aren't to be blamed because our FED's gave them the right to steal, swindle and cheat in anyway possible. On top of that they get to recieve and keep their bonuses for doing such a bang up job.
If a company goes bankrupt who is to be blamed, the buying public because they didn't buy enough. No, the CEO, the board of directors and anyone under the CEO. Should they get compensation for a poor job, hell no. They should be held responsible and no bonuses paid.
Same goes for the FEDs. All those on the oversight committees that failed us should be held accountable. Let's put them on the hot seat like they did the auto exec's and brow beat them in the publics eye.
I too am retired and find my cost of living going up with a fixed income. My health care went up 1045% this year after a judge decided that the CEO's of a company that failed had the right to backout of a committement, to offer me healthcare after retirement. No one asked, will you be willing to pay more of the monthly premium. Now, my pension is going to be reduced because it has gone into the PBGC. I'll be a true socialist when I turn 65 and collect Medicare. My pension and Social Security + Medicare covers all bases.
I don't believe on President can be blamed but as a group of individuals in the Federal Governmenet, I can and will blame Congress and its committees for the failure to act properly in this situation. They too have not said, "I'm sorry".
Butch, very well said, and I agree with much of what you wrote.
We need to educate a lot of people out there. If we can make a start it is better than doing nothing.
The bottom line, we, the people, need to hold Congress accountable. And, we have a long way to go.
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