« The Top 10 Failures Of Federal Reserve Chairman Helicopter Ben Bernanke (Compendium) »
Proving that job performance is irrelevant in Washington, Obama today reappointed Bernanke to a new 7-year term as Fed Chairman.
Can't say that this is surprising news, given the signals of late. But still it is remarkable in the context of Bernanke's massive failure as the architect of the U.S. financial collapse. On a day when most are praising the Fed chairman, we will look at his many and massive failures instead.
As you will hear in the collection of videos and stories linked below:
- B-52 failed to recognize asset bubbles of all types, and even encouraged irresponsible 2/28 mortgages and low teaser rates in 2007 at the start of the sub-prime implosion.
- Failed to shut off the free-money spigot still gushing from the Greenspan years.
- Failed to provide a framework for adequate regulatory oversight of Wall Street (yet Obama now wants to give the Fed more oversight and regulatory authority).
- Failed to control or even understand the build-up of risk within the system caused by derivatives and securitization.
- Failed to reform the inherently conflicted credit-rating structure that perpetuated the risk and securitization build-up.
- Failed to understand the nature of the crisis when it first broke in the Spring of 2007 (Bear Stearns sub-prime, hedge fund implosion). The famous meltdown clip from Cramer on Bernanke sums this failure up rather nicely.
- Failed to understand that housing prices might actually decline in value after such a dramatic rise (seriously, even my mother knew that banks providing new mortgages on massively-inflated housing was not going to turn out well)
- Failed to negotiate with AIG counterparties; instead choosing to pay all claims at 100 cents on the dollar without asking for any compensation (preferred shares) in return.
- Failed the American people with his decision to support and reward the failed banks and the bankers for their malfeasance, excessive risk-taking and criminality.
- Failed to protect taxpayer's interests in deals with AIG, JPM, and Bear Stearns, (with Maiden Lane I, II and III) and the still un-detailed asset guarantees given to Citigroup and Bank of America.
- Ultimately Benjamin Bernanke, the Chairman of the Federal Reserve failed by choosing to reward failure in others.
And fittingly, today he was rewarded for his failures by President Obama with a bright, shiny, new 7-year term as chief architect of the debt-bubble re-inflation already underway. Bravo!
Editor's note: Still attempting to confirm the rumor that when Larry Summers was awakened from his nap and told the news, he went back to sleep and asked to not to be disturbed until Bernanke's term expires in 2017.
The best video clips I could find are embedded inside plus some additonal reading.
Bernanke's failures in his own words.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Eliot Spitzer: "The Federal Reserve is a Ponzi scheme."
Visit msnbc.com for Breaking News, World News, and News about the Economy
"You want a triple AAA rating? Just give me some more money."
Nassim Taleb: "Bernanke should be removed from office."
Nassim Taleb: "My friend Roubini has a problem...he likes Bernanke too much!"
Cramer's complete on-air meltdown on Bernanke's failure.
Additional reading:
What An Audit Of The Fed Might Reveal About Maiden Lane I, II and III
Dean Baker: To Get A Real Systemic Risk Regulator, Fire Bernanke
Did Bernanke Save The World From Economic Ruin? (Bob McTeer and Dean Baker)
Dr. William K. Black: The Great American Bank Robbery
Nassim Taleb On Geithner, Bernanke And Generational Theft
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Tuesday, August 25, 2009 at 6:48PM
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Reader Comments (14)
It is just a simple case of people not wanting to live in the real world, and paying a high price to avoid reality as long as possible. Printing money will not ever solve this problem. It only destroys the middle class. That is EXACTLY what is happening, and it is ALL that is happening. You have to really step back and look at this scam from a true outside perspective. All the jawboniong is meaningless. You have to look at what is really going on. The middle class is being looted and sacked. That's all this is. All the talk is merely a distraction. I cant emphasize that point enough -- all the talk is merely a distraction. It is no different than a cold blooded killer stabbing you in the back as he whispers sweet nothings in your ear.
My statement to the banksters:
First let me say that I am for peace. I do not believe that citizens should take to arms because with technology being what it is, that would prove hurtful to our children and grandchildren. But I do call for the government and or military of the United States to do what is necessary, including the use of force to protect the United States citizens from the bankster cartel. The great American experiment was the result of the founding fathers determination to be free of the central bank of England, a private bank, and our independence is derived from that protection of our people by the founding fathers. As to the present state of affairs, here is my statement:
You banksters have the AUDACITY to ask us to cooperate with you in your economic recovery after you have killed the golden goose of world prosperity, we consumers right here in the USA.
There is such a thing as divine retribution for unscrupulous behavior, even a greater judgement for that which hurts many, many people! We have been deceived by your fancy Bank of International Settlements (BIS) and its tools, the Federal Reserve Bank and FASB. You have given us off balance sheet banking and ponzi loans. You robbed our treasury. You hit us with mark to market. You threaten that again in 2011. You plan to put the off balance sheet toxic assets, which you devised, back on to the bank balance sheets in 01/2010 to hurt the banks and make us buy treasury bonds out of fear even there is no intrinsic demand for that massive debt. Had you not allowed off balance sheet banking in Basel 2 you could have maybe gotten away with your evil deeds. But what is done is done.
I declare to you banksters (and plead that our government to take note) that the Bank of International Settlements is public enemy number one of the United States and should be taken down, by force if necessary. http://bank-abuse.com/TowerofBasel.html
The United States government, or military if necessary, has the duty to protect the American banks from these banksters so that our big banks, such as Bank of America, JP Morgan, Goldman Sachs, Citibank and a few others, will not feel the desperate need to take advantage of the citizens of this country with unfair loans and interest rates and fees. Woodrow Wilson said 1913 was a time of great error. That is when he allowed the arm of European Central Banking, known as the Federal Reserve, to usurp the monetary power of the congress of the United States and her citizens.
It is past time that we urge our military and civilians in power to do something about this to save our nation from years of financial ruin.
http://hubpages.com/hub/The-Abuse-of-the-Middle-Class-by-the-World-Elite
I think you failed to mention his biggest failure: not doing his job. This is the fed's mission statement:
http://www.federalreserve.gov/aboutthefed/mission.htm
Right there in the first sentence: STABLE PRICES!! I still have a standing challenge for someone to produce a chart of anything suggesting we've had stable prices since Benny showed up at the fed in 2002. He and Greenie rationalized away unstable house prices instead of doing their job.
Maybe it's just sour grapes on my part, because I've spent a lot of my working career not actually doing my job and no one ever called me "innovative" or said I "saved the system from calamity". Lucky bastard.
I think you failed to mention his biggest failure: not doing his job. This is the fed's mission statement:
http://www.federalreserve.gov/aboutthefed/mission.htm
Right there in the first sentence: STABLE PRICES!!
Maybe it's just sour grapes on my part, because I've spent a lot of my working career not actually doing my job and no one ever called me "innovative" or said I "saved the system from calamity".
Very good points that deserved repeating.
Very well-written comment. Enjoyed reading it.
http://stlouis.bizjournals.com/stlouis/stories/2009/08/24/daily19.html
I to enjoyed your post.
@
Mark
conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
Don't seem like they are doing any good at their "mission statement", thanks for the link.
t
No they're not. And it's about as simple as job descriptions get. Maybe we should be thankful he's not working at a garage doing brake work.
Mark,
I bet you never fucked up the entire system, either. As such, there's an indictment of the entire system packed into this little gem of yours.
Thank God he's not an airline pilot, no building in America would be safe.
http://latimesblogs.latimes.com/money_co/2009/08/while-much-or-most-of-wall-street-seems-to-believe-that-ben-s-bernanke-deserves-a-second-term-as-federal-reserve-chairman-2.html?ref=patrick.net
I am wondering if this might be a "smoking gun". I heard Bernanke testify that last September, there was a $500 billion drawdown of Money market funds one fateful morning...
Has anyone ever asked him to identify where those draw downs came from?
I think the clip I'm referring to is with Grayson, and wouldn't knowing who was responsible for that "run on the bank" be useful knowledge?
I have also often wondered if the drawdown was real...