Sen. Bunning Tells Bernanke: "You Are The Definition Of A Moral Hazard; The AIG Bailout Alone Is Reason Enough To Send You Back To Princeton" (Video & Transcript)
PLEASE email, facebook, re-tweet, share and take our stories with you when you leave. Our only weapon against the madness is GREATER AWARENESS. Thank you.
----------
Video: Senator Jim Bunning Opening Remarks And Response From Federal Reserve Chairman Bernanke -- Senate Confirmation Hearings -- December 3, 2009
This is one of the best speeches (and without a doubt the most impressive Fed emasculation) I've ever heard in a Senate hearing. We have the video and transcript. Do not miss.
----------
From the WSJ
It’s highly unusual for us to find a lawmaker’s statement at a hearing to be particularly informative, even rarer for it to be entertaining. At Senate Banking Committee hearings, Sen. Jim Bunning has at times proved the exception on the latter. The Kentucky Republican has firmly staked out his spot on the field as the primary attack dog against the Federal Reserve, its leadership and much of how it operates.
We’ll leave you to grade his statement for content at today’s confirmation hearing for Fed Chairman Ben Bernanke. But we’ll gladly give him an A for effort. He’s got zinger after zinger, a citation from prior hearings and even a reference to his baseball career (before he became a Hall of Famer). Some members of his party have tried to quietly nudge Sen. Bunning out of office — he won’t run for reelection next year — so this was his last opportunity to oppose a Fed chairman’s nomination. As a sort of parting gift to him, and to you, we offer his full statement from today’s hearing, as prepared for delivery. (Just remember that one of the leading candidates to replace him is Rand Paul, the son of Texas Republican Ron Paul, the House’s leading Fed hater.)
---------
(Please read the entire thing not simply the portions I have highlighted)
Prepared remarks from Senator Jim Bunning (R-KY)
Four years ago when you came before the Senate for confirmation to be Chairman of the Federal Reserve, I was the only Senator to vote against you. In fact, I was the only Senator to even raise serious concerns about you. I opposed you because I knew you would continue the legacy of Alan Greenspan, and I was right. But I did not know how right I would be and could not begin to imagine how wrong you would be in the following four years.
The Greenspan legacy on monetary policy was breaking from the Taylor Rule to provide easy money, and thus inflate bubbles. Not only did you continue that policy when you took control of the Fed, but you supported every Greenspan rate decision when you were on the Fed earlier this decade. Sometimes you even wanted to go further and provide even more easy money than Chairman Greenspan. As recently as a letter you sent me two weeks ago, you still refuse to admit Fed actions played any role in inflating the housing bubble despite overwhelming evidence and the consensus of economists to the contrary. And in your efforts to keep filling the punch bowl, you cranked up the printing press to buy mortgage securities, Treasury securities, commercial paper, and other assets from Wall Street. Those purchases, by the way, led to some nice profits for the Wall Street banks and dealers who sold them to you, and the G.S.E. purchases seem to be illegal since the Federal Reserve Act only allows the purchase of securities backed by the government.
On consumer protection, the Greenspan policy was don’t do it. You went along with his policy before you were Chairman, and continued it after you were promoted. The most glaring example is it took you two years to finally regulate subprime mortgages after Chairman Greenspan did nothing for 12 years. Even then, you only acted after pressure from Congress and after it was clear subprime mortgages were at the heart of the economic meltdown. On other consumer protection issues you only acted as the time approached for your re-nomination to be Fed Chairman.
Alan Greenspan refused to look for bubbles or try to do anything other than create them. Likewise, it is clear from your statements over the last four years that you failed to spot the housing bubble despite many warnings.
Chairman Greenspan’s attitude toward regulating banks was much like his attitude toward consumer protection. Instead of close supervision of the biggest and most dangerous banks, he ignored the growing balance sheets and increasing risk. You did no better. In fact, under your watch every one of the major banks failed or would have failed if you did not bail them out.
On derivatives, Chairman Greenspan and other Clinton Administration officials attacked Brooksley Born when she dared to raise concerns about the growing risks. They succeeded in changing the law to prevent her or anyone else from effectively regulating derivatives. After taking over the Fed, you did not see any need for more substantial regulation of derivatives until it was clear that we were headed to a financial meltdown thanks in part to those products.
The Greenspan policy on transparency was talk a lot, use plenty of numbers, but say nothing. Things were so bad one TV network even tried to guess his thoughts by looking at the briefcase he carried to work. You promised Congress more transparency when you came to the job, and you promised us more transparency when you came begging for TARP. To be fair, you have published some more information than before, but those efforts are inadequate and you still refuse to provide details on the Fed’s bailouts last year and on all the toxic waste you have bought.
And Chairman Greenspan sold the Fed’s independence to Wall Street through the so-called “Greenspan Put”. Whenever Wall Street needed a boost, Alan was there. But you went far beyond that when you bowed to the political pressures of the Bush and Obama administrations and turned the Fed into an arm of the Treasury. Under your watch, the Bernanke Put became a bailout for all large financial institutions, including many foreign banks. And you put the printing presses into overdrive to fund the government’s spending and hand out cheap money to your masters on Wall Street, which they use to rake in record profits while ordinary Americans and small businesses can’t even get loans for their everyday needs.
Now, I want to read you a quote: “I believe that the tools available to the banking agencies, including the ability to require adequate capital and an effective bank receivership process are sufficient to allow the agencies to minimize the systemic risks associated with large banks. Moreover, the agencies have made clear that no bank is too-big-too-fail, so that bank management, shareholders, and un-insured debt holders understand that they will not escape the consequences of excessive risk-taking. In short, although vigilance is necessary, I believe the systemic risk inherent in the banking system is well-managed and well-controlled.”
That should sound familiar, since it was part of your response to a question I asked about the systemic risk of large financial institutions at your last confirmation hearing. I’m going to ask that the full question and answer be included in today’s hearing record.
Now, if that statement was true and you had acted according to it, I might be supporting your nomination today. But since then, you have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.
Instead of taking that money and lending to consumers and cleaning up their balance sheets, the banks started to pocket record profits and pay out billions of dollars in bonuses. Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives. You are repeating the mistakes of Japan in the 1990s on a much larger scale, while sowing the seeds for the next bubble. In the same letter where you refused to admit any responsibility for inflating the housing bubble, you also admitted that you do not have an exit strategy for all the money you have printed and securities you have bought. That sounds to me like you intend to keep propping up the banks for as long as they want.
Even if all that were not true, the A.I.G. bailout alone is reason enough to send you back to Princeton. First you told us A.I.G. and its creditors had to be bailed out because they posed a systemic risk, largely because of the credit default swaps portfolio. Those credit default swaps, by the way, are over the counter derivatives that the Fed did not want regulated. Well, according to the TARP Inspector General, it turns out the Fed was not concerned about the financial condition of the credit default swaps partners when you decided to pay them off at par. In fact, the Inspector General makes it clear that no serious efforts were made to get the partners to take haircuts, and one bank’s offer to take a haircut was declined. I can only think of two possible reasons you would not make then-New York Fed President Geithner try to save the taxpayers some money by seriously negotiating or at least take up U.B.S. on their offer of a haircut. Sadly, those two reasons are incompetence or a desire to secretly funnel more money to a few select firms, most notably Goldman Sachs, Merrill Lynch, and a handful of large European banks. I also cannot understand why you did not seek European government contributions to this bailout of their banking system.
From monetary policy to regulation, consumer protection, transparency, and independence, your time as Fed Chairman has been a failure. You stated time and again during the housing bubble that there was no bubble. After the bubble burst, you repeatedly claimed the fallout would be small. And you clearly did not spot the systemic risks that you claim the Fed was supposed to be looking out for.
Where I come from we punish failure, not reward it. That is certainly the way it was when I played baseball, and the way it is all across America. Judging by the current Treasury Secretary, some may think Washington does reward failure, but that should not be the case. I will do everything I can to stop your nomination and drag out the process as long as possible. We must put an end to your and the Fed’s failures, and there is no better time than now.
----------
Watch (don't click unless you're coming from our email newsletter or RSS)
----------
Dec 5, 2009 at 12:28 AM
Reader Comments (32)
Later this morning, Ben Bernanke begins the uncomfortable process of trying to convince lawmakers that he deserves a second term as Fed chairman. He is widely expected to be confirmed. But the hurdle got a little higher yesterday, when Vermont Sen. Bernie Sanders (I., Vt.) threatened to hold up a vote on the Senate floor of the confirmation. If Mr. Sanders follows-through with his threat, Mr. Bernanke would need 60 votes to overcome the block and be confirmed. It’s not clear Mr. Sanders will carry out the threat, and it looks like Mr. Bernanke will get the votes he needs even if Mr. Sanders does carry out the threat. But nothing is certain these days. A year ago, very few political observers would have imagined that Rep. Ron Paul (R., Texas) could have generated a powerful majority of support for a bill to audit Fed policy.
Bernanke
Tom Gallagher, a savvy economic policy analyst with the ISI Group, notes that the other magic number for Mr. Bernanke is 16. That’s how many ‘no’ votes were tallied against Paul Volcker when he was up for a second term at the Fed in 1983, the most in any confirmation vote for a Fed chairman in the Senate in the past 30 years. Alan Greenspan — who was largely pampered by lawmakers when he was Fed chairman but is now the object of growing ridicule for low-interest rate and hands-off regulatory policies, never got more than seven ‘no’ votes.
http://blogs.wsj.com/economics/2009/12/03/bernankes-two-magic-numbers-60-and-16/
Stock trading tax pushed again by Pelosi...
Unemployment Extension Adds Up to 99 Weeks of Benefits
I think this is the most powerful clip ever posted here (maybe anywhere)!!!! Thanks for the transcript.
Please God, let this one go viral...
"I will also object to floor consideration of Mr. Bernanke’s nomination until the Senate votes up-or-down on the Federal Reserve Sunshine Act. This bipartisan legislation, sponsored by Senator Bernie Sanders of Vermont, has over thirty cosponsors and would allow the Government Accountability Office to conduct a full audit of the Federal Reserve. Americans deserve to know how their money is being managed so these mistakes never happen again."
OBAMA CROOK spins scam lectures now on TV
and NATION being looted ..PENSION BUST NEXT
NO one screaming and protesting ?Lol
Scream and cheer on Internet ?
Fuck it all
Cowards here any one posted any rants at WHITEHOUSE.GOV?
Financial Committee?
Banking committee?
Justice Department?
DB SHIT JOKE
Matt Tabbi my Hero
Matt Taibbi: Obama Baited And Switched Us, And Let Wall Street Take Over The White House
http://www.businessinsider.com/matt-taibb-obama-baited-and-switched-us-and-let-wall-street-take-over-the-white-house-2009-12
http://www.youtube.com/watch?v=G4it-Fs8RLw&feature=player_embedded#at=158
Here's the link to Matt Taibbi blog:
http://trueslant.com/matttaibbi/
Maybe you should post your cranial diarrhea there.
http://www.mcclatchydc.com/215/gallery/79615.html
I have stayed away from the forums for a while.
One of my first posts was mention Bhopal.
Dear Americans this week is the 25 th anniversary of Bhopal.
Bhopal a reminder of what happens when Corporate America goes bad.
Now, you are wondering what some dead brown people has to do with you?
Well what is happening now in your country, is just an extension of the Union Carbide nothingness that did not happen after an American multi-national killed 25,000 people.
The people in charge were not punished. NADA. Nothing. So the follow on is that "wall Street" found out that it can do what it wants. See Iraq.
America used 9/11 as a reason to invade Iraq. That attackers were Saudi. Where your oil comes from.
How many died on 9/11. How many died in Bhopal?
You still don't see the link?
You country has no moral compass. Your leaders are amoral. (That is amoral not immoral.)
Your nation is not heading for a disaster. You nation IS a disaster.
Your country is run on greed.
Not ability. Not grace, wit or charm but greed, brute force and ignorance.
Which of you presidents warned you about the military industrial complex?
Still not see it?
You are about to lose your middle class. That is you!
The people who read this site. You think millionaires read this site? No. the average American reads this site. That is YOU. The people who have a house a computer and the internet. People who are literate.
People who care. (sort of)
You are being had, by a corporate elite. And a system that rewards greed and not hard work.
And now for the bad news.
You think that those people in charge are going to give up gracefully?
"Oh gee, shucks. You guys are right! I am not going to accept my multi million dollar bonus. that's just plain wrong! Look at all the homeless poor people! Oh I feel so bad!"
Nope.It ain't going to be that way.
You are going to have to stand up and fight.
You have to start to choose what kind of world you want to live in. It is all well and good, mouthing the words freedom and Democracy. But, at the end of the day when you have none?
What are you going to do about it?
I will answer that question myself.
Probably nothing.
Here's mine: Destruction is an easy trick.
America is what it is because we didn't spend the last 200 years killing each other every time someone got their toes stepped on. No doubt we've got gigantic problems right now, but we are light years ahead of every other country on the planet in understanding how to solve them.
Consider this: Thanks to the efforts of people like DB, who've worked tirelessly to raise awareness on this cancer of corruption in America, every politician is beginning to realize that reappointing Bernanke is political suicide. That's how we roll.
What most of the world hasn't figured out yet is that running down the street with your AK-47 a-blazing, murdering your own countrymen is both cowardly and counter-productive. You can teach a five year old to aim and pull a trigger. It's not a special skill.
America's enemies would love nothing more than to see us waist-deep in each other's blood.
--------
Ken...we are doing everything we can...ranting on whitehouse.gov day after day will get you nothing besides placement on a few "watch lists"...
the goal is to raise awareness among the general population all the way from teenagers to seniors...as mark points out we have already had victories...75% favor an audit of teh FED and only 21% favor B-52's reappointment...those are victories of awareness...
----------
James...nice cartoons...thx...
What most of the world hasn't figured out yet is that running down the street with your AK-47 a-blazing, murdering your own countrymen is both cowardly and counter-productive. You can teach a five year old to aim and pull a trigger. It's not a special skill.
---------
progress...steady progress
-----------------
thought this was interesting...
http://washingtonindependent.com/69704/birtherism-as-a-fundraising-tool
http://blog.retailtrafficmag.com/retail_traffic_court/2009/12/03/november-same-store-sales-disappoint/
Not good news for the green shoots crowd...
Pelosi Backs Using TARP Money for Job-Creation Bill
Bernanke Says Fed ‘Should Have Done More’
Move to Repay Aid Helps Bank of America Shed Stigma
Bernanke defends tenure in quest for 2nd term
Fed chief tells lawmakers that central bank steered economy out of danger
Will Reid and Dodd Ignore Bipartisan Hold on Bernanke And Shield the Banks?
Ben Bernanke defends Fed's decisions
Bernanke Says Fed ‘Should Have Done More’
I am frustrated like Ken and I am not going to take it anymore.
Fed Needs To 'Start Giving A Red Hot Damn About The American Public,' Says Sen. Whitehouse
How about this video DB, it's a right wing conspiracy all over again.
http://www.youtube.com/watch?v=zGi1r87-Apg&feature=ytn%3Amptnews
Well, because he is a member of the club...
funny video DB, ssshhhhhhhhhh