Yes folks, believe it or not, this is what our distinguished FED chairman said in a speech this very day. These nuggets of wisdom would seem to be a tad late, given the approximately $20 TRILLION of net household worth destroyed THUS FAR during this so-called "recession." The chairman also noted that the uncontrolled creation and dissemination of derivative products, complex securities, and securitized loans have not proven to be "all they were cracked up to be." Well, DUH? Do you have to be a Princeton economics professor to be 2, 3, 10 years BEHIND THE CURVE? It would seem to be the case, if Mr. Bernanke is the benchmark. We must note sadly that Bernanke took absolutely NO RESPONSIBILITY for the calamitous failure of the Federal Reserve, of which he was a Governor for a number of years, to exercise its statutory supervisory responsibility vis-a-vis the banking system. Indeed, if the Congress had intended for the banks to do as they pleased, why did they establish the Federal Reserve and other regulatory agencies in the first place? These institutions have cost countless billions, tens of billions, hundreds of billions to fund over the decades. And for what? The business cycle proceeded with less destructiveness BEFORE THE FED was established. JP Morgan, who single-handedly ended the Panic of 1907, knew a thing or two about how to contain and end a panic; it would seem that Bernanke and Company possess no such wisdom, no such skill, no such ability DESPITE their ownership of the printing press and their vast power, which far exceeds that which Morgan possessed. Moreover, we are constrained to point out, yet once again, that the good Dr. Bernanke WAS NOT THE MERE SPECTATOR HE IMPLIES HE WAS. He was not a grocery store owner or the driver of a Good Humor truck at the time the FEDERAL RESERVE authorized Greenspan's desire to allow the banks to run amuck, and to create an ocean of cheap credit and a consequent MONSTER BUBBLE. No indeedy! At such time he was a GOVERNOR of the aforementioned FED. At the time when the decision was made to allow Lehman to fail -- probably the single most catastrophic decision ever made by a central bank -- he was not lecturing classes at Princeton, but was CHAIRMAN of the FED. He saved Bear Stearns, a far less important institution; he saved AIG; he saved innumerable banks. Why not Lehman? He persists in denying responsibility, in refusing to accept blame. As for our new president, it seems to us that the guiding theme of his administration is a "principle" of which this man of many principles never speaks. The principle we have in mind is: The PETER PRINCIPLE. If the truth of this prinicple -- that every man rises to the level of his own incompetency -- was ever at doubt, this president has laid all doubt to rest. He has rewarded the grossly incompetent with trillions of taxpayer money and guarantees and potential losses, and has chosen as his key advisors the same incompetents who have amplified the credit contraction and the economic collapse BY ORDERS OF MAGNITUDE. The only major change that this Administration has brought re. the great economic and financial catastrophe is a CHANGE IN THE IDENTITY OF THE OCCUPANT OF THE OVAL OFFICE. The basic policy, and the key personnel, remain the same. Moneysage 2009 - copyright |
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