Friday, February 26, 2010

Bernanke as Luddite

Ben Bernanke spends too much time worrying about the political winds. One reason that many of us so admire Paul Volcker is that, unlike Ben Bernanke, Paul Volcker did what he thought was the right thing to do and stayed away from the politics. Not so, with Bernanke.

More than any other single person, Bernanke was the father of the 2008-2009 bailouts and, very specifically, Bernanke was the father of the AIG bailout that is still at the center of the public's anger over the financial service industry bailouts of the Bush-Obama era. Bernanke is the person who gave Geithner the reins in the fall of 2008 that allowed Geithner to behave in a dictatorial and capricious fashion while ruling over the New York division of the Federal Reserve.

Bernanke is obsessed with surviving as Fed Chairman. He has fawned over Obama after first fawning over Bush. He took the US over the cliff and now pretends to want to bring us back from the prospect of fiscal bankruptcy.

Now, Bernanke is busy investigating the CDS and derivatives market to see if they are the true cause of Greece's fiscal problems. What a joke? As if regulating the derivatives market can save countries from their own bad behavior. Bernanke has now joined the Luddites who believe that bad economic consequences are always the result of evil speculators.

It is always some outside force that causes companies and nations to collapse, according to the Bernanke Luddites. Bernanke has added his voice to those who think that reckless behavior is not the cause of financial collapse. Instead, the cause of trouble is a group of bad guy speculators. Once more Bernanke checks his economics education at the door and proceeds down the political path to try to protect his survival as a public figure. He should be ashamed.