Monday, January 25, 2010

Disliking Bernanke has nothing to do with liberalism.

Timothy Geithner, in all of his wisdom, gave an interview to POLITICO describing his position on the possible dumping of Fed Head Ben Bernanke. He also saw this as the perfect opportunity to do what he's best at; lying. Here is Geithner's statement with respect to Bernanke's position:

He's done a remarkable job of helping steer this economy out of the great recession. And I think he'll play a very important role in helping in the success of our efforts to try to make sure we are bringing this economy back to durable growth.

If by "great job" you meaning failing to predict, or (more likely) choosing to ignore, an $8 trillion dollar housing bubble that took A DECADE to reach failure, then yes, he's doing a kickass job. The economist Dean Baker accurately illustrates Bernanke's job perfomance in his analogy that, "preventing the collapse of the financial system should probably seen as being comparable to a major league outfielder catching a long fly ball. It's not that easy, but major league outfielders do it." This gave me a good laugh.

Ask yourself, how would neglect/incompetence on this level in virtually any self-respecting company be resolved? It would almost certainly result in immediate termination.

Moving on, Geithner accidentally told the truth (partially) during one portion of the interview when he stated, "I think the markets would view [replacing Bernanke] as a very troubling thing for the economy as a whole." Well, Tim, you're right. Losing Bernanke absolutely could turn out to be a disaster for the markets. The thing you seemed to have left out, but what your job position demands you to recognize, is that the market and the "economy as a whole" are not the same thing! If it were otherwise, why would Glass-Steagall be an issue at all?

The fact of the matter is, no matter how well/poor their private investments perform, financial markets remain the most highly compensated employment sector in the nation. They have, beyond any reasonable doubt, shown taxpayers that their banks are exterior to the economy as a whole and are acting accordingly.


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