Friday, January 1, 2010
Ben Bernanke: TIME's Person Of The Year
Happy New Year everyone! Now, let us get back to work. Oh, I forgot today is a holiday. OK, don't work, just read my blog. How's that?
TIME magazine has selected Federal Reserve Chairman Ben Bernanke as its Person Of The Year, and I think everyone in the United States should read the article about Ben Bernanke and the following articles on "How the Fed Works" and "Money In Motion". The latter two are also illustrated to help explain these two very important points. TIME would be doing the country a favor if it sent every member of Congress, both House and Senate, a copy of these articles. They could learn a lot, as I am sure there a many in Congress that do not know what is written on the pages of this issue of TIME magazine.
TIME has done a good job with this issue. The part on Bernanke himself and his rise to be Chairman of the Fed is well written. I agree that he was the right man at the right time and in the right position. I am not sure that anyone, except Paul Volcker, could have handled the financial crisis as well as Ben Bernanke did. That he admits that he did not see it coming is no surprise, few realized what had taken place in the mortgaged-backed bond market.
The three large credit rating agencies had slapped their triple-A credit rating on mortgage-backed bonds that should have never received that rating in the first place. What they did was to create billions of dollars in phony triple-A bonds. This then lead to the credit default swaps, which lead to the downfall of AIG. There were many safety devices that were eliminated over the years, or made weaker by a government that believed that regulation of the markets had no place. Alan Greenspan, the idiot savant that ran the Fed before Ben Bernanke, was locked in to the belief that the markets could run themselves. Big surprise. They can not.
I disagree with the purpose of the Fed as it has evolved today. In my economic system, the central bank is that, a central bank. It is not responsible for cleaning up after the Congress shits the bed. Getting rid of Glass-Steagall and other needed regulations lead to the financial crisis which lead to the economic crisis. Phil Gramm is the other idiot in the story. The job of the Fed is to protect the integrity of the currency - the US dollar, and, to see to it that there is enough money in the money supply to carry on the economic growth of the country. What the Fed has become over the years since its formation in 1913, is the repairman of the Congress and stupid Presidents. Now, after Bernanke has saved the country and possibly the world from another Great Depression, he is being attacked by members of Congress that don't know shit about monetary policy. Ron Paul and Jim Bunning don't know shit about what Bernanke knows, and has spent his life studying, but these two assholes think they need to replace the man that just saved this country from going over the cliff. Can we make a better comedy than this?
Even worse, Congress wants to politicize the Fed. If our Congress really wants to fuck up our currency, then they should go a head and politicize the Fed. The other central banks around the world will not sit by while our Congress screws with the US Dollar. Hopefully, when push comes to shove, the Congress will come to its senses. Ben Bernanke did a great job during this economic crisis, period.