This page has been archived and commenting is disabled.
Who is Ben Bernanke?
I have spent many years prowling the marbled halls of the capital building in Washington, ambushing politicians in the underground passageway connecting the House and the Senate for off-the-cuff comments, sitting in on off-the-record, deep background interviews, and even occasionally offering some congressional testimony.
One thing I learned about the harsh realpolitiks of our chief governing body is that when one party shows the least amount of weakness, the other launches a vicious, coordinated, all out assault across many fronts. So the alarm bells rang big time for me when the Democratic candidate lost the Massachusetts Senate race, redefining the concept of incompetence and complacency to convert a 31 point lead into a 4 point loss. The “black swan” has landed.
Of course, Ben Bernanke will suddenly face the battle of his career over his Senate confirmation! Both the Republican and Democratic lynch mob are making the case that you don’t give an arsonist a medal for putting out the fire. The urge to conduct a human sacrifice to atone for the financial crisis is huge. Unsurprisingly, investors voted with their feet, trashing the Dow for 500 points, pricing in a new quantum leap in uncertainty for the global economy.
Since nothing less than the fate of the free world depends on the outcome, I thought I’d touch base with David Wessel, the Wall Street Journal economics editor, who has just published In Fed We Trust: Ben Bernanke’s War on the Great Panic.
I doubted David could tell me anything more about the former Princeton professor I didn’t already know. I couldn’t have been more wrong, as David gave me some fascinating insights into the inner soul of our much vaunted chairman of the Federal Reserve.
Bernanke was the smartest kid in rural Dillon, South Carolina, who, through a series of improbable accidents, ended up at Harvard. He built his career on studying the Great Depression, then the closest thing to paleontology economics had to offer, a field focused so distantly on the past that it was irrelevant. Bernanke took over the Fed when Greenspan was considered a rock star, inhaling his libertarian, free-market, Ayn Rand inspired philosophy in great giant gulps.
Within a year the economy had suddenly transported itself back to the Jurassic Age, and the landscape was suddenly overrun with T-Rex’s and Brontesauri. He tried to stop the panic 150 different ways, 125 of which were terrible ideas, the remaining 25 saving us from the Great Depression II. This is why unemployment is now only 10%, instead of 25%.
The Fed governor is naturally a very shy and withdrawing person, and would have been quite happy limiting his political career to the local school board. To rebuild confidence, he took his campaign to the masses, attending town hall meetings and pressing the flesh like a campaigning first term congressman.
The price tag for Ben’s success has been large, with the Fed balance sheet exploding from $800 million to $2 trillion, solely on his signature. The true cost of the financial crisis won’t be known for a decade. The biggest risk is that we grow complacent, having pulled back from the brink, and let desperately needed reforms of the financial system slide.
How Bernanke unwinds this bubble will define his legacy. Too soon, and we go back into a real depression. Too late, and hyperinflation hits. That’s when we see how smart Bernanke really is.
Oh, and by the way, there is zero chance of Bernanke losing the confirmation. The entire kerfuffle was invented by a bored, but hungry media.
For more iconoclastic and out of consensus analysis, you can always visit me at www.madhedgefundtrader.com , where the conventional wisdom is mercilessly flailed and tortured daily, and where you can also catch me on Hedge Fund Radio weekly.
- advertisements -
Well, curb, you sure that was Pedro at SOTB and not ol Bennie himself?
"He waited tables, and he wore a poncho, just like the Pedro mascot."
http://www2.journalnow.com/content/2009/mar/18/in-college-bernanke-once-had-job-at-south-of-the-b/
Chile today,
Hot Tomale
So, why can't Ben read the signs?
For all his expertise and math models, Dr. B had no clue what was going to happen to the economy and the markets. How can someone fix something they couldn't see coming, even while it was hitting him in the face?
Did any of the precious models the Fed used show that the world will need saving? If not, then we need new models, with new thinkers.
Is it really so difficult to accept that this is not about whether Bernanke was smart, dumb or ambivalent about economic policy? This is, was, and always will be (just as the Great Depression was) a manufactured event a good long time in the making. Benny is merely the current U.S. front, or face if you will, of a higher power of international bankers that have controlled an ever increasing amount of the world's finance since the late 1600's.
Arguing about Ben's competence or even breaking this argument down into a Democrat v. Republican issue is akin to winning a gold medal in the Special Olympics. Yeah, you won, but you're still retarded. (No offense to the mongoloid group - in most ways they're more pure and innocent than the rest.)
+10
OK so we have 'smart' money, and 'smart' bombs and now everthing is OK because the fiat into which we have sunk our blood sweat and tears is "managed" by a cartel run by a guy who is "smart"?
Mad indeed.
Enjoy the Kool-aide.
I have no doubt that if the existing securities laws were enforced. MHFT would be bunking with Bernie. As far as Ben goes...he is now, as we speak, having his last lingering doubts removed as to what really caused the Great Depression. (Keynes and the money machine) Soon he will only have to look in the mirror to find the cause of the second Great Depression.
The problem is that the master on the history of the Great Depression and the Fed's role in the Depression in the 1920s and 1930s was Murray Rothbard, not Ben Bernanke. Bernanke was placed in this position because of his misinterpretation of history. Those appointing him knew that when negative event happened, Bernanke would not hesitate to turn on the printing presses. If Greenspan had his put, Bernanke has his helicopter.
He may be reappointed, but it only leads to the inevitibility of what will transpire. Bernanke just adds the certainty to this.
The real history of the Great Depression I is quite different from what we were told.
FDR has done everything he could interfering with natural economic processes. His endless "New Deals" did not cure the Depression and then he together with the Soviet dictator Stalin initiated the WWII. It did end the Depression, transformed the USA into an economic and military superpower bringing prosperity to America but at a cost of just 65+ millions people dead.
It is of interest that Obama is trying to imitate FDR but, unfortunately, he is not even close. Obama and his gang are just "street-smart" crooks.gang
Yeah, I remember reading about that in school. It was great when Stalin and FDR annexed Austria, bullied Western Europe into giving Germany the Sudetenland, and invaded China.
Perhaps you ought to provide some support for your revisionist history?
If Bernanke loses the confirmation, will you promise to stop posting on this site?
Amen brotha'!
Tyler can we please dispense with the MadSmugAssFucker?
+1000
Scott Brown won 52/47 vs an opponent who was unlikeable. She made gaff after gaff and came off as remote and incompetent.
Dont read too much into it.
Who is "congress" to dk Bernanke? Howabout they take some responsibility?
You might want to look at the margin Ted Boyo Kennedy won by in his elections.
That might be a better clue as to how manhy have turned againt TheBamster's ideas of tackling the problems first by choosing something that 75% of americans are at least not
terribly anxious about: health insurance, as opposed to the first thing he did for the wealthy Tribe of Wall Street.
He built his career on studying the Great Depression, then the closest thing to paleontology economics had to offer, a field focused so distantly on the past that it was irrelevant.
It could not have been said any better.
He's a king..no make that "mark" maker...
If the system is built on one man there's no system...
Its not a hungry media...its an outraged public...the media for the most part is captured...
This recent charade is just that...for show.
Only now are we beginning to see the true details of what happened in those days and who played pivotal roles in the act that put American taxpayers on the hook to save AIG.
The New York Fed's Real Crimes
Email disclosures by AIG, responding to subpoenas from the House Oversight Committee, have revealed that the New York Federal Reserve requested that information about the AIG bailout be kept secret as if it were connected to national security.U.S. securities regulators originally treated the New York Federal Reserve’s bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.
The request to keep the details secret were made by the New York Federal Reserve — a regulator that helped orchestrate the bailout — and by the giant insurer itself, according to the emails.
http://tinyurl.com/y8l7fzr
I am convinced, MadHedgeFundTrader, that however well you know your craft, you have no idea what is going on in the real America.
You say "This is why unemployment is now only 10%, instead of 25%."
Actually, real (U6) unemployment is closer to 17%. In many communities, you know, those places where Washington doesn't have any vested interest in showering money, it's well over 25%.
You say "That’s when we see how smart Bernanke really is."
Do you really believe he can "smart" his way through this? Seems to me luck is at least as important as smart. I understand the whole depression:hyperinflation dichotomy and if someone gave me 100 studies telling me when to push the button, it still would boil down to luck.
You say Scott Brown a black swan. Out here in the middle, he is no such thing. Scott Brown is the logical, direct line from event A to event B opening act for an electorate that is absolutely seething. The fact that you view him as a swan says a lot about how out of touch you really are. The main event is gonna blow your mind.
You need to get out more if you want to know what's going on. You need to spend time with people who are different from you. It obviously impresses you that you have access to Congressmen. Big whoop. When was the last time you were in the middle of the country? Ever been to Detroit or Flint? Ever talked to a farmer in Iowa, face to face? Ever talk to a Mexican immigrant in Texas and have him tell you what forced him to leave his home?
I'm sorry chief, but those of us who have to work for a living are not impressed with guys who ask off the cuff comments under the streets of Washington. We know how Congress works. You'd have to be a fool not to know. What we know that guys like you never will is what honest, hardworking Americans are thinking and worrying about and going through. That gives us a perspective you will never have.
Steve Keen takes down Bernanke......
http://www.nakedcapitalism.com/2010/01/steve-keen-the-economic-case-agai...
Beautifully said... +1 The halls of Congress are not big enough for the egos that ply its floors. Kings and queens were just as insulated from reality and often ended up with their heads in a basket.
While I appreciate your sentiment, I can count on one hand the number of kings and queens who lost their heads due to popular uprising (Even giving you a couple gimmes like including the czars and counting Louis and Marie Antoinette separately). The typical playbook was for the king to piss off the elites and be replaced by a different member of the elite.