Thursday, January 21, 2010
A Congress Too Stupid to Understand Their Actions
It is unfortunate that the Federal Reserve is taking the beating from Congress. To me it is almost like blaming the little company in Ohio that makes the NFL footballs for the excesses of the players on the field. People do not understand what a central bank is or does and so when Wall Street and the economy went into free fall, just about everyone turned to the Federal Reserve for some answers. Quite simply, it doesn't work that way.
The Congress in their infinite wisdom removed the boundaries of the game, modified the rules and generally believed that markets in the 21st century did not need to be regulated as in the past. Remember Senator Gramm saying that big boys didn't need to wear little boys pants? Well, Congress passed deregulation, President Clinton signed the legislation, and Fed Chairman Alan Greenspan smiled his idiot smile.
The financial crisis, bond market meltdown and housing market collapse were engineered by some of the dumbest legislation in the history of the United States. And, now that the banking system, which in the 21st century, we could not hope to come out of a recession without, has been saved, everyone is turning to the Fed for answers. Go ask the women that make the footballs that will be used in the Super Bowl why one team will win and the other will lose, makes as much sense.
Bernanke did more than he was allowed to do, but he had no choice. The downward spiral, of a lack of confidence in the monetary system, would have driven our economy and perhaps the whole world's economies into a depression. Making cash available to mutual funds and others that were not technically banks prevented one huge panic here at home and around the world.
It is time that people begin to understand that this man made financial disaster was manufactured on Capitol Hill by a Congress that is too stupid to understand the gravity of their actions.