Ignore the Supreme Court: OMGObama's Real Challenge, Filling Bernanke's Shoes at the Federal Reserve
Pic credit: John Robertson
Rumor around the non-existent water cooler is that Barack Obama is eyeing Larry Summers to take over at the Fed once Ben Bernanke's term expires, not necessarily even considering extending Zimbabwe Ben another term. This troubles me beyond belief; which is saying quite a bit considering what an absolute failure Bernanke's latest QE scheme has become (on top of Bernanke's multiple other sins which shall remain nameless). Is it fair to put the Fed's failure on its Chairman? Aren't there enough Fedheads to point fingers at? The FOMC? GWB's insatiable appetite for war-mongering and wasteful spending?
The Supreme Court is important in its own right but we need to watch this one closely. As we already know, our buddy OMGObama doesn't really have the best, uh, eye when it comes to choices for his administration (TIMOTHYFUCKINGGEITHNER OMG WHATATOOL!!!) and picking the next Chairman of the Fed FAILboat is nothing like figuring out which tax cheat should go in which empty Czar slot.
But I digress. Via the Daily Star:
Sometime this summer, President Barack Obama will have to start thinking about one of the big decisions of his presidency - whether to reappoint Ben Bernanke as chairman of the Federal Reserve when his term expires next January. What complicates the choice is that the other obvious candidate is Lawrence Summers, the White House economic czar.
Bernanke has emerged as one of the few heroes of the financial crisis, widely praised for his innovative stewardship of the Fed. He's still something of a sleeper in Washington, so low-key that the frequent descriptions of his "soft-spoken" manner don't do justice to just how quiet he is. But in fixing the financial breakdown, he has been a veritable tiger. The Bernanke Fed is so much more powerful than its predecessors that it's almost a different institution.
Rewind! "Bernanke has emerged as one of the few heroes of the financial crisis, widely praised for his innovative stewardship of the Fed." Where in the hell is the Mogambo Guru when I need him? -insert bipolar cackling laughter here- OMGLOLWTFBBQ!
To say that "the Bernanke Fed is so much more powerful than its predecessors that it's almost a different institution" doesn't do the Fed's power grab scrambling to save the economy that it itself imploded justice. I assume the Daily Star intends for this statement to be a reflection of a bold, bright, and newly-strengthened Federal Reserve ready to take on the big bad economic crisis. I, being not on crack cocaine, see it as a terrible turn for the worse. Hell, even the Fed is reluctant to keep taking on more and more, lest it risk its precious independence. Where has that gone, by the way? Anyone seen it? Looks to me like the Fed is playing Tim Geithner's bitch these days. Come on, boys, I expected better out of my favorite evil cabal.
The article continues with Bernanke looking back at lessons learned these last two tumultuous years and what he hopes his successor can learn from this mess and the Fed's mistakes. His thoughts?
For all the computerized financial engineering that preceded the meltdown, he thinks it resembled a classic 19th-century bank panic. Investors thought their money was parked in securities that were as safe as bank deposits. When these securitized assets proved to be riskier than expected, investors panicked.
"We were seeing variants of classic panic behavior," Bernanke said, remembering the wild days of 2007 and 2008 when supposedly safe markets suddenly locked up as frightened investors rushed to get their money out.
Bernanke recommended studies by Gary Gorton, a Yale economist who has analyzed the ways the recent panic resembled those of the late 19th century. In his latest paper, "Slapped in the Face by the Invisible Hand," Gorton explains that the long-ago panics typically came at the height of the business cycle and involved new information that frightened depositors into withdrawing their money. Such bank panics disappeared for nearly 75 years after the enactment of federal deposit insurance in 1934.
"Slapped in the Face by the Invisible Hand" sounds like it could be the latest in a long line of OMG the sky is falling! doom-and-gloom books these days. Perhaps it should be re-written as the story of the American taxpayer?
I tried to get through this article but after the Daily Star massaged Bernanke's balls over the fabulous job he's done handling the financial crisis and had the audacity to imply that the FDIC cured the "bank panic" problem, it became apparent to me that this was little more than a propagandist fluff piece with little connection to reality whatsoever.
Sorry I had to call you out on that, DS, hopefully you try harder next time.
And you wonder why print news is a dying art? Possibly because 95% of it is swollen with deceptive and asinine pablum (case in point, above)?
My bet? Bernanke will be sent to live out his Fed days on the Board of Governors and few of his colleagues will speak poorly (at least out loud) about his absolutely treasonous and possibly criminal behavior during his Chairman days. Sure, the rest of us know better, but I guess there's something to be said for being the mousy economist.
I remind you here, dear reader, that the Columbine kids were also "quiet." I'm just sayin.