Are We Missing Something?
Ben Bernanke is a dubious choice to be named "Person of the Year" by Time magazine. While Time's Managing Editor Richard Stengel credits him with recognizing early and reacting appropriately to the ongoing financial crisis, in reality, he was wrong time and again with both his predictions and his remedies. Just remember these gems:
On July 1, 2005, Bernanke stated without hesitation that we were not experiencing a housing bubble: "I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit."
November 2005, on derivatives: "With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly." And "the Federal Reserve's responsibility is to make sure that the institutions it regulates have good systems and good procedures for ensuring that their derivatives portfolios are well managed and do not create excessive risk in their institutions."
February 15, 2006: "Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise."
February 2008: "I expect there will be some failures of smaller banks" (Bear Stearns collapsed a couple of weeks later).
But then again, I guess in regards to his nomination we are talking about achievements in 2009. That was the year Bernanke said, "Currently, we don't think [the unemployment rate] will get to 10 percent."
This is the same chairman of the Federal Reserve who told us that Fannie and Freddie were "adequately capitalized" and "in no danger of failing."
Unfortunately, he has not just been wrong about housing, unemployment, banking, and derivatives -- his policies have directly contributed to all of the problems we now face.
High unemployment and the weak dollar threaten to further undermine our economy, yet his policy is to just keep borrowing. The massive debt his policies have foisted on the American taxpayer is weakening the U.S.'s position as global economic leader and hurting already tenuous relations with foreign governments. Bernanke has supported the policies of Greenspan and our current and previous administrations - the very policies that got us into this mess. He has supported the leveraging of the American economy to rescue companies long past saving and the borrowing of billions from foreign governments to line the pockets of corrupt investment bankers.
I could recommend a few alternative names for runner-up, if Time's criteria are really as dubious as they appear:
Lloyd Blankfein from Goldman Sachs for robbing taxpayers legally
Rick Wagoner of GM for taking the world's largest car maker to bankruptcy in a quarter-century
Tim Geithner for ensuring that all of our bankers prospered during the worst financial crisis since the '30s
Tiger Woods for providing the nation with great dinner conversations and helping to spur tabloid sales.
Bernanke is insistent on using inflation to make our personal debts seem small, all the while setting the country up for a much larger disaster long term. Bernanke is borrowing from Peter to pay Paul... and robbing taxpayers to pay Peter.
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