Kudlow: Helicopter Ben and the (Not So) Stable Dollar Policy of His Fed
Larry Kudlow says Ben Bernanke should withdraw if he does not have bipartisan support for a second term. Curious concept but really? Does anyone think Bernanke cares whether or not Congress likes his manic money printing ass?
Helicopter Ben Bernanke passed his reconfirmation vote in the Senate Banking Committee last week.
But he passed by 16 to 7. Most of the Republicans voted against Bernanke, as did one Democrat, Sen. Jeff Merkley of Oregon. The reconfirmation now goes to the floor of the Senate, where it’s going to be held up for a while. (Sen. Jim DeMint and others are insisting that a vote on the Government Accounting Office’s audit of the Fed occur first.) But when the final vote happens, I think Bernanke could be in trouble.
Mirroring the Banking Committee vote, most of the 40 Senate Republicans may vote against Bernanke, and they will be joined by a number of Democrats. If Bernanke were to be opposed by as many as 35 or 40 votes, it would substantially undermine his credibility.
Whether it’s his past inflationary-bubble monetary performance, or the bank bailouts, or the AIG bailout, or the end to secrecy at the Fed, senators on both sides of the aisle are blaming Bernanke, fingering him as the wrong guy at the wrong time. And somewhere in that mix of opposition — led by senators Richard Shelby, Jim DeMint, Jim Bunning, and others — Republicans are gradually moving back to a Ronald Reagan–type, King Dollar, hard-money position that is in strong contrast to Bernanke’s dollar declinism.
Aside from the fact that Bernanke doesn’t look at gold or the dollar as price signals to guide his policy, we have witnessed a complete reversal of the Fed’s intellectual framework. By that I mean, for 20 years or so, first under Paul Volcker and then during Alan Greenspan’s first three terms, the Fed argued that the tax-cut effects of low inflation would spur economic growth and low unemployment. This period lasted roughly from the early 1980s until the end of the century. But since Bernanke came on the scene, the sound-money, stable-dollar argument has disappeared.
I recommend Kudlow's article in its entirety, it's an articulate and completely reasonable take on Bernanke's failures in his tenure as Chairman of the Fed. There are many, of course, and there aren't enough words on the Internet to express the full failure of Bernanke's last four years.
In Bernanke's defense (shit, I must be getting the flu or something, what the hell am I thinking defending the dude?), he inherited the largest and most toxic bubble in the history of monetary bubbles. Add to that the fact that he was never really cut out to be the second most powerful man in the world and you have an impotent, book-smart central banker who couldn't print his way out of a paper bag and will not be able to print his way out of the disaster he and his Fed are now in. Plain and simple.
Bernanke never had an ounce of Greenspan in him and as much as I loathe the old troll, I have to admit that Greenspan's central bankerness was what made him one hell of a Fed Chairman. No, I'm not tooting his horn, I'm saying the fucker did what he was supposed to do and did so with flair and scandalousness. If the Chairman of the Fed's main job is to fuck with markets' heads and throw elusive hints at monetary policy to keep markets guessing, well he certainly had a way about him. But Zimbabwe Ben? The guy is a hack and a pretty piss poor one at that.
Ben Bernanke doesn't have the support of Congress at large not because he failed in his duties, he doesn't have their support because Congress is pissed off and Bernanke is the lucky bastard who gets to be the face of the Fed. It doesn't matter that it's him, what matters is that for the very first time Congress actually has to babysit the brat from Jekyll Island and they have no idea how or why. That's it. It could be any hack, the fact is that Congress is just as confused as America as a whole and angry in a general sense.
Does Congress even know who this guy is? Do they care? Doubtful.
I'm not saying he deserves a second term but I am saying it would be nice if our lawmakers didn't have their heads shoved so far up their asses that they can see their own tonsils and knew what sort of beast they were playing with when it comes to the Fed.
Oh well. I'll keep yelling, hopefully they'll get their asses cleaned out before it's too late. Or was it too late in 1913?