drdent

Decoding the Bernanke Fed's Agenda

Well, I dunno about the rest of this post but one thing rings as false as a mustache on Paris Hilton (or pick your favorite female model/actress/whatever... You say, in part, "Well said. $13 trillion is too big to fail!" This may or may not be true but either way the Fed has been hugely inconsistent in this regard since the US housing bubble created about $8 trillion in bubble wealth. This is in the same ballpark and the root cause of the current problems. If this amount of money is "too big" then why didn't the Fed do something years ago (like, oh, say, publicly admit there _was_ a bubble developing) to deflate it? On the other hand, if the Fed figured an $8 trillion housing bubble wasn't that big a deal then why worry about $13 trillion in bad bets at one investment bank? Sorry, you just can't have it both ways.

Personally, I think both Greenspan and Bernanke were/are inept and failed to recognize either bubble. Then when the schtuff hit the fan they hurry in to rescue Wall Street rather than the economy. Witness the fact that inflation is up, unemployment is rising, wages are well behind inflation, and GDP is at a virtual standstill ... but we just had a remarkably nice rally on Wall Street. _Perhaps_ when Bernanke _speaks_ it "jinxes the market", but when he _acts_ it's another story altogether. Never mind the fact that the Fed's approach will most likely leave the bumbling idiots that ran their bank(s) into the ground still earning multi-million dollar salaries while helping people who got sucked into buying houses at bubble inflated prices not one whit. I think it's pretty clear where the Fed's loyalties lie.