Bernanke Makes Like a Squid, Sprays Clouds of Ink Hoping to Confuse
Fed chairman Ben Bernanke is pouring it on with nonsense on top of nonsense. Please consider Bernanke makes case for Fed keeping banking powers.
Federal Reserve Chairman Ben Bernanke waged a fresh battle against Senate efforts to strip the Fed from banking supervision.
Bernanke, in a paper to Congress released Thursday, argued that stripping the Fed of such power would deprive the central bank of information that factors into the setting of interest rates to influence overall economic activity.
"Elimination of the Federal Reserve's role in supervision would severely undermine the Federal Reserve's ability to obtain in a timely way and to evaluate the information it needs to conduct its central banking functions effectively," according to the paper.
Information on the health of banks will factor into Fed decisions about when to start boosting interest rates and reeling in other stimulus to prevent inflation from taking off, the paper noted.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., wants to rein in the Fed's power and remove it from overseeing banks as part of a broader legislative revamp of the nation's financial structure. That conflicts with the Obama administration's stance as well as the approach taken by House lawmakers in their financial overhaul bill.
Dodd wants to curtail the Fed's banking powers because he blames the central bank for lax regulation and failing to spot problems-- mistakes that contributed to the worst financial crisis since the 1930s.
Bernanke Sprays Clouds of Ink
Pray tell what does access to information have to do with supervision? The answer of course is nothing.
Bernanke is fighting a strawman that does not even exist, on purpose, I might add. If it is information Bernanke wants, give it to him the moment it comes out. No one has proposed taking away the Fed's access to information. If the Fed wants more information than it has, all it has to do is ask.
Bernanke's tactics are much like that of a squid, spraying clouds of ink, hoping to hide the real issues and confuse the inept.
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