Bernanke: For Good or For Ill

This week, Time magazine named Federal Reserve Chairman Ben Bernanke “Person of the Year 2009.” CNBC’s panel of experts gave Bernanke the “Man of the Year” title (no misogynists there!) in 2008. And well they should since their sponsors are among the biggest recipients of the Paulson-Bernanke-Geithner bailout. As I select the link from their website to imbed in this story, an ad from Wells Fargo (NYSE: WFC) is displayed in the right half of the screen. Click on “home” and it’s an ad from General Motors (OTC: MTLQQ).

I imagine Bernanke is quite embarrassed this holiday season as a result of the many, many less than flattering comparisons he is receiving. CNBC’s sister network, MSNBC, took exception to anything flattering in the designation by reminding everyone that being named Person of the Year is not an honor. Time’s definition, according to MSNBC, is: “The person or persons who most affected the news and our lives, for good or for ill…” They list a few of the previous winners, including Adolf Hitler (1938), Joseph Stalin (1939), and Ayatollah Khomeini (1979). One writer likened Bernanke receiving the award to “celebrating an arsonist for his heroics in putting out a fire that he set.”

Regardless of Time managing editor Rick Stengel’s qualifying statements, the tone of the write-up suggests, to Charles Scaliger at The New American at least, that Bernanke has a “cult of personality” within the Washington, D.C. Beltway. If you’ve never met Bernanke, which I never have, it’s hard to imagine there is the kind of personality there that one could be cult-ish about. Former Federal Reserve Chairman Alan Greenspan, who I also never met, regardless of his other shortcomings had the ability to say what it took to get the economy to do what he wanted it to do – he didn’t always pick the best things to get it to do, but he was able to get a message across. Bernanke, on the other hand, never seems quite comfortable in front of Congress the way Greenspan used to appear. A nervous central banker is very bad for the economy.

The designation – whether or not it is an honor – came the day before the Senate Banking Committee approved President Obama’s nomination of Bernanke to four more years as Chairman of the Federal Reserve. That nomination and approval represent further steps in what Rolling Stone writer Matt Taibbi calls “Obama’s Big Sellout.” The President, and 16 out of 23 Senators on the Banking Committee, seem to hold the mistaken impression that those who got us into this mess are going to be able to get us out. Republican Senator Jim DeMint of South Carolina was among the dissenters: "We can't have a Federal Reserve that the majority of Americans no longer trust, and that's what we have today." Bernanke himself told Congress less than ten months ago that he didn’t know what to do about the economy. Maybe the eventual good that will come from Bernanke’s 2009 affect on our lives will be the demise of the Federal Reserve system in the United States and an end to the mountains of fiat money that it produced in vain efforts to solve the financial crisis that will forever be linked to Ben Bernanke’s name: Person of the Year “for good or for ill.”

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RE: Keynesian Voodo

No one political party has a monopoly on this kind of craziness, unfortunately. You are spot on about what is taught. I was enthusiastic about teaching economics until I got my PhD and found out that general equilibrium is all a lie. In grad school, we joked about warming ourselves on cold winter nights by indulging the cozy idea of market prices magically appearing in order to balance supply and demand. Sadly, though, because politicians are not PhD economists, they only get as far as the models without learning the unrealistic assumptions they are accepting when they implement them.

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Keynesian Voodoo

Keynesian economics is a perfect example of the detached reality that academics live in. It was invented to justify government spending beyond its means. Its Achilles Heel, unfortunately, is its presumption that the decision-makers are benevolent, rational, incorruptible decision-makers. They don't mention that key ingredient in Econ 101 though.

Of course, this nonsense is taught ASAP in college. Forget consumer contract law or real estate and tax law. No, no, no. Just make sure the robots understand that its OK for Democrats to keep spending. Yeah!

Hmmm, let's see. Government-funded professors and economists conveniently spread the child-like nonsense that government "experts" know what's best. So, tax and borrow like there's no tomorrow.

The Keynesian Myth has enabled Democrats and big-government RINOs to spend, spend, spend on the promise that all their spending will eventually sow seeds of abundance. The last car factory in CA is closing April 1. Probably 50,000 jobs will be directly impacted in the state. Unless the economy turns around PDQ, California WILL be declaring bankruptcy.
The Austrian Oaf and state legislators act like nothing's wrong. They are home right now, all cuddly in front of a roaring fire. I guess their pensions are safe. Thank goodness.