Now he tells us. On Wednesday Federal Reserve Chairman Ben Bernanke referred to the nation's unemployment rate as a "national crisis," an obvious if depressing fact of life to the 25 million Americans who have been unsuccessfully attempting to find full-time employment.
But to finally hear those words from the man George W. Bush and Barack Obama both appointed to lead us out of the great recession is a bracing reminder of how markedly the policies of both those presidents have failed: "We've had close to 10 percent unemployment now for a number of years, and of the people who are unemployed, about 45 percent have been unemployed for six months or more," Bernanke said. "This is unheard of."
But why is Bernanke just now discovering this after having overseen the Fed's purchase of trillions in toxic mortgage-backed securities from the too-big-to-fail banks that sacrificed people's homes in a giant Ponzi scheme? Why did he throw all of that money at the banks without getting anything back in the way of relief for the people the bankers swindled?
The housing meltdown, which has robbed Americans of a considerable portion of their net worth, has led to the continued depressed consumer confidence that is the prime cause of crisis-level unemployment. In another of his too-late-to-matter moments, Bernanke acknowledged that "strong housing policies to help the market recover" would "clearly be very useful," but he failed to suggest any.
Bernanke, along with then-New York Fed President Timothy Geithner, helped implement the Bush strategy of saving the banks in the hope that their rising tide would lift our little boats. That remained the strategy when President Obama rewarded Geithner for having saved AIG and Citigroup by naming him treasury secretary in the incoming government.
With the Geithner appointment, and the even more disturbing selection of Lawrence Summers to be his top economic adviser, Obama sealed his own fate as president. By turning to those disciples of Clinton-era Treasury Secretary Robert Rubin, a prime enabler of Wall Street greed, the new president fatally betrayed his promise of hope.
If you still need confirmation of just how decisive a betrayal those appointments were, check out Ron Suskind's new book, Confidence Men, a devastating insider account of the Obama White House that clearly identifies as the source of this president's failure "Rubin's B-Team," Summers and Geithner, "two men whose actions had contributed to the very financial disaster they were hired to solve." Suskind quotes then-Sen. Byron Dorgan, D-N.D., one of the few who dared stand up to the Wall Street lobbyists, as telling Obama, "I don't understand how you could do this; you've picked the wrong people!"
Of course the Democrats from the Clinton era don't bear all of the responsibility for the radical deregulation of the financial industry that ended the sensible restraints on greed installed by Franklin Roosevelt in response to the Great Depression. Indeed, the inspiration came from Republicans led by Phil Gramm, the then-senator from Texas who as head of the Banking Committee authored the legislation that Wall Street lobbyists had long pushed unsuccessfully.
The mayhem they wrought and the subsequent big-money rewards to Rubin and Gramm do not seem to have shocked this president or the leading contenders for the Republican presidential nomination. Rubin became chairman of Citigroup and was rewarded with $120 million while he guided the bank to the edge of bankruptcy. Gramm went to a leading position at the Swiss-based UBS, the continually troubled institution now in the midst of its latest scandal, involving fraudulent trading. In addition to a $45 billion direct TARP bailout, Citigroup got $99.5 billion, and Gramm's UBS $77.2 billion from a $1.2 trillion secret Fed loan fund.
Gramm and Rubin were partners in what should be considered the crime of the century, speaking in moral and not legal terms since, as regards the financial world, the bad guys get to write the laws. Thanks to their efforts, which allowed the creation of the "too-big-to-fail banks" and a totally unregulated derivatives market in toxic home mortgage securities, we entered the Great Recession, but neither of its authors has ever been held seriously accountable for the enormous suffering he caused.
On the contrary, Gramm and Rubin's "just free Wall Street to do its thing" ideology still dominates the economic policies of both major political parties. Rubin's acolytes have controlled the Obama administration's economic strategy of saving Wall Street by betraying Main Street, and Gramm, who recently endorsed his former student at Texas A&M, Rick Perry, for president, remains the free-market-mayhem guru for Republicans. On Election Day, whoever wins, we lose.
Bob Cesca: The Republicans Continue to Wage War Against Government Workers
Bernanke: US Unemployment a 'National Crisis'
Fed Chairman Bernanke quietly takes the heat
Politicians Are Threatening the Fed's Independence
Gov. Perry renews criticism of Fed, calls its policies ineffective and ...
Bernanke buys Treasury bonds, Geithner sells them
Fed Text: Bernanke: Emerg Mkts Have Many Yrs of Growth Ahead
That's the problem from the start. Put it all on him, without looking at ourselves. Our culture needs change from top to bottom, but the change has to begin with us, not politicians.
Sad that there are so few political figures of either party on all levels that inspire one to exercise the right to vote.
I don't think Obama is a bad man, I just don't consider him presidential material. Not enough experience. Then or now.
So now Obama, via Clinton-era advisors, is responsible for "Wall Street greed"?
"On Election Day, whoever wins, we lose."
This article is defeatist propaganda and conjecture. What exactly is this author's point? Give up on government altogether? Just don't bother voting?
Upshot of all this is that to elite economists, most people are just numbers on a graph, abstractions for calculation. Most of us who live inside the graph think and feel differently.
I've often wondered how Obama responds to people when he's asked this, and I have no Eartly idea why so many pundits let him off the hook and do not elaborate to ask him this question, or at least ask him what's his response and in his mind when people DO ask him this, because anyone who asks this is asking more then just "Why did you pick these morons - Whoops, I mean these people? -What they're actually alluding to is what is stemming to be the biggest failure of his presidency..... Opposing forces like the GOPers will never take him to task on this, because they're actually even more bought by the banks then any Dem is..
DESTROYING the WORLD
Which the Workers, Engineers, Architects
HAD BUILT
It's not just socialism, but a kind of socialism that encourages companies to take increasingly dangerous risks because they know that the taxpayer will bail them out no matter what.
. . . but extremely misguided fools calling for attacks on the Federal Reserve
People who have ANYTHING BAD to say about the Federal Reserve should have their heads examined.
Go study US Economic HIstory Before/After the Federal Reserve
Even poor Federal Reserve Chairmen were much better than any imaginable alternative
(including Alan "The Maestro" Greenspan, who was very good early in his tenure)
SEE MY TAKE:
http://www.huffingtonpost.com/social/Zip_Zinzel/alan-greenspan-fiscal-economy_n_960583_107760315.html
_
THE BIGGEST PROBLEM WITH "THE FED" IS
. . . that they are too politically influenced to perform one of their most vital functions:
"to take away the punchbowl just when the party starts getting good"
THIS WAS THE PROBLEM DURING THE CLINTON BUBBLE
When the economy starts to overheat, THEY SHOULD APPLY SOME BREAKS
. . . but it is difficult for them to do this- since they will be accused of
Killing jobs & GROWTH
(Besides the Clinton Bubble, this also applied to the Housing Bubble under GWB)
----------------------------------------------
ALSO, all the calls to Audit-the-FED, are nothing more than fishing expeditions
looking for ammunition to launch phoney political attacks
--------------------------
HE WAS AGAINST IT- BEFORE HE WAS FOR IT
Herman Cain in the debates supported Fed Audits, earlier he said different
http://www.youtube.com/watch?v=caeNXivEGEg
The primary purpose of the Federal Reserve was to allow the US Government to maintain a more orderly economy. Prior to its adoption, the US economy was subjected to frequent & unpredictable Booms & Busts, orchestrated by giant financial interests for their profit. THE CLASSIC APPROACH IS THIS:
Thru financial manipulation they run up the economy,
sell out near the top,
Selloff creates a bust, and
When the economy is in the tank, they come in and scoop up assets for pennies on the dollar
This was facilitated by the bulk of the money supply being in the hands of private bankers like JP Morgan.
The idea of the Fed was to create a PUBLIC Central Bank with no interest in financial manipulation for special-interest gain.
================
MONEY SUPPLY
Obviously the supply of money in the economy, which is defined by various “M”s. Generally M1 = Cash & Checking Accts;
M2 = M1 + Savings Accts.
MONEY SUPPLY ELASTICITY = Money supply should roughly grow/shrink in relation to overall national economic output.
If the economy grows by 10%, the money supply should grow by 10%.
If money supply grows faster than economy=inflation,
. . . if it grows slower than economy = deflation
PROBLEM WITH GOLD/SILVER STANDARDS is that the supply of precious metals has no correlation with the growth of the economy.
ie economy grows 10% & Gold only 2% = deflation
& viceversa.
Wikipedia has a number of great articles
Rebuttal- The Fed never purchased trillions of toxic mortgage -backed securities. It had a max of "secret loans" of $1.2 trillion (Sept 2008) during the Bush Admin not the alleged "trillions" during Obama Admin .
W used "executive authority" on Dec 19, 2008 to authorized Sec of Treasurey, Paulson, to bypass Congressional overview of the $700 Billion TARP for Paulson's Treasury, not FED, to "purchase" toxic mortgages at Banks' desired "mark to model" (FASB Rule 157) value.
Get your facts straight. FED does not purchase, it loans, Paulson used TARP to purchase at mark to model rather than mark to market during Bush Admin.
http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html
WE must find patriots and get rid of the politicians. This is our last chance !