Let's be honest, most of us have only a vague notion of what the Federal Reserve actually does. When Alan Greenspan started doing mea culpa's on television, however, I got a stronger sensation that the Federal Reserve Chairman really is an important guy. Since then, I have greatly appreciated Ben Bernanke's stoic anti-charisma. I can't tell if what he's saying makes any sense, but he seems so calm and competent when he speaks that I feel like a real adult is on the case.
So I was a little taken aback today to watch him get testy with the Senate Budget Committee. He said, "AIG exploited a huge gap in the regulatory system; there was no oversight of the financial products division. This was a hedge fund basically that was attached to a large and stable insurance company, made huge numbers of irresponsible bets, took huge losses." He seemed almost emotional as he spoke. And then it occurred to me that he was trying to remind Congress that a lot of the fault for this could be placed squarely placed at their feet.
Democrats, you inherited a mess from the Republicans, but you also didn't do much between in the time that you regained control of the Senate and the financial crisis erupted. Then, you passed TARP with insufficient oversight criteria in cooperation with a lame-duck president. So please be aware that the "not my fault" card will only take you so far.
Republicans, you made a lot of this possible while you controlled both houses of Congress for over a decade. That "huge gap in the regulatory system" is one that you allowed to be made in the name of libertarianism and fiscal conservatism. Of course, your motives are somewhat suspect since you also okayed the largest deficit in US history (just prior to this current mess) and managed to roll back more civil liberties then the left-leaning boogey men of your own political rhetoric. So, Senator Jim Bunning don't act like the new sheriff in town: you've been in the Senate since 1998 and no doubt voted for much of the relaxed financial posture that helped make this fiasco possible.
Of course, Bernanke might also just be angry at an administration that would allow $30 billion of taxpayer money to be dispersed to unnamed "counter parties." This is simply wrong and an abuse of the public trust more fitting of the Bush administration than the Obama era. The other option, of course, is that there was simply no choice, because the economy is FUBAR. (For those of you who are not familiar with the term, I'll give you a hint. It's an acronym ending in "..."Up Beyond All Repair.)
Under any circumstance, let's all try to be a little nicer to Chairman Bernanke who appears to be we earnestly bent on trying to save all our butts, blue and red alike.