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.
Stay tuned.
Posts
6 comments:
Who could say it any better - or anything more?
General Re, the insurance company, was just fined $90 million for helping AIG "cook" the books. It is known who specifically was involved...why is no one going to prison? What the hell is wrong with our system. The thieves KNOW there is no consequences for their actions. Maybe we really need the Chinese-type of government...these individuals would have been executed.
Winslow, I agree with you. When a person causes so much pain as Bernie Madoff caused for so many people and institutions, I think life imprisonment is far too easy. Some might disagree, but if people in finance knew going in that the penalties could be severe, then I believe there would be far less white collar crime as it relates to fraud in the securities industry.
Excellent analogy, Fred. Even I understood about the football.
I think congress is looking for answers from the F.R. as we look to them for answers. Especially when one or two of the top dogs were in a conflict of interest position, ie Paulson and Geithner. Both fed workers and one the better part of his career in GS.
I believe the F.R. needs questioned. More so before Bernacke but he too has answers to some of his statments prior to the collapse.
The question is, who's watching big brother? Evidentally no one or himself because he is surely getting away with a lot.
Wow, sounds like you had quite an ordeal while I was off in the land of the sick (she's still sick now, but slightly less so). Glad to hear you finally got your bag back, hopefully intact. So did it play the slots? And more importantly, did it win?
Post a Comment