Bernie Sanders Was Just Plain Wrong In 2008

I am proud of my stands over the years concerning the bailout for the financial sector, and the one for the car companies.  I supported both measures. I am proud of my position of support for the actions of Ben Bernanke.   That is not to say there was not great angst and irritation at the foundational reasons we needed to act as a nation in 2008, but the fact is that action was required.  The financial crisis proved why we need mature members of congress who look out for the larger interests of the country.

I have been blunt about how I see these matters such as when I wrote the following in January 2010.

While many populists (I do not count myself as one) bemoan the idea that Bernanke helped save giant banks from collapse, they also  fail to recognize the potential harm that would have resulted for millions had such a thing happened.  While protecting the financial system may seem like it was designed only to help the ‘fat cats’ it should be noted by  (Russ) Feingold and others that protecting the major players also helps protect the whole economy.  While that may not fly as good rhetoric at the liberal bean curd dinners it does make sound sense for the rest of the nation.

I have always held Bernanke in high regard for his unflappable character, along with his cerebral aura which gave our nation confidence when he took the helm and steered the economy through some rugged and perilous days.  It was those like Sanders in 2008 who scared the hell out my sensibilities and they still do.

Bernie Sanders continually remains on the margins.  As the Dallas Morning News makes clear One Note Charlie is not prepared to lead our nation a president.  Proof of that is clear when he was unable to see the damage in 2008 that would have resulted by allowing our national banking system to implode.

At every step along the way, Sanders has hammered Clinton for her perceived coziness with Wall Street. He picked up on the theme once more Sunday: “When billionaires on Wall Street destroyed this economy, they went to Congress and they said, ‘Please, we’ll be good boys, bail us out,'” he said. “You know what I said? I said, ‘Let the billionaires themselves bail out Wall Street.'”

It’s a fine applause line, but it ignores the scary reality that Congress had been asked to confront in 2008. The American system of finance was on the brink of collapse. Banks had stopped lending money — for just about anything, including homes, autos and business expansion.

Had the system collapsed, as economists warned it might, the human toll would have been staggering — and most certainly not just among bankers and billionaires.

That’s the grim picture that Sanders glosses over while talking about revolution. He talks about what needs to change and how the system might be more fair. But he’s forever leaving out any mention of the pain that would be felt as revolutionary changes slid into place.

In 2008, Clinton and 73 other senators saw the risks and acted to avert them. Sanders was busy shouting about the unfairness of that system. He still is. If he’s ever to broaden his appeal, he needs to offer more than that same-old, populist saw.

Ben Bernanke Saved The Economy Yet Many Do Not Trust Him

From The Atlantic.

I like Ben Bernanke.  Perhaps I should say I trust Ben Bernanke.  His unflappable character, along with his cerebral aura gave me confidence when he took the helm and steered the economy through some rugged and perilous days.  Sadly he has taken far too many verbal punches.  I have no doubt that history will place him on the right side of events.   The following is one snippet from a balanced piece on Bernanke,  and his work at the Federal Reserve.

Bernanke has a sense of history uncommon among public officials. He insists that overall, his efforts have hewed to the Fed’s mission—to furnish an elastic currency appears in the preamble to the Federal Reserve Act of 1913—and that his improvisations have been forced on him by the extraordinary, and perilous, position of the U.S. economy. He has gone to unprecedented lengths—press conferences, town-hall meetings, appearances on 60Minutes—to communicate those ideas to the public. According to Greg Mankiw, formerly President George W. Bush’s top economist and now an adviser to Mitt Romney, Bernanke earnestly believes in the democratic process; he thinks disclosure will lead to a more responsible electorate. Perhaps this is why the public vitriol so disturbs him. Bernanke himself eschews hyperbole (he chooses his words with meticulous care) and refrains from personalizing policy differences. In December, he felt compelled to release a letter to Senate leaders in which he distinguished Federal Reserve loans, which have not cost the taxpayers anything or added to the federal deficit, from “government spending”—a simple point, perhaps, but one that is often confused in the public discourse.

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Bernanke, for the most part, has kept inflation in the range of 2 percent a year, which is where he wants it—not so high that it would threaten an inflationary spiral, but high enough to provide a cushion so that policy makers can react if inflation shows signs of ebbing and deflation looms. Krugman and others argue that the Fed should encourage faster inflation to address persistent high unemployment. This argument operates on several levels. Printing money, of course, does not create jobs. But because wages are “sticky,” higher prices for goods can make labor more affordable to employers. When times are tough, McDonald’s, for example, has no qualms about cutting hamburger prices, but it is less likely to cut pay. Instead, it employs fewer workers. (This is why the economy lost 8.5 million jobs during the recession; there is a very strong social bias against asking workers to go “on sale.”) Inflation is a less visible way of reducing pay. Workers think they are making the same amount, but since the dollars are worth less, employers can better afford to pay them. 

Senators Tell Obama That Ben Bernanke Has Votes For Comfirmation

Good.

Obama made calls from the White House to members of the Senate leadership and others and was assured Bernanke would win confirmation, a senior White House official told The Associated Press. The official spoke on the condition of anonymity to discuss the private phone calls.

If Bernanke’s nomination were derailed it would send tremors through Wall Street, which in turn could hobble an already fragile economic recovery and slow any comeback in the ailing jobs market. The mounting opposition to Bernanke was one of the factors worrying investors as the stock market suffered its worst setback in more than 10 months this week, losing 552 points from Wednesday to Friday.

Bernanke is widely credited with helping to prevent the Great Recession from turning into a second Great Depression. But his support of Wall Street bailouts has angered Americans who are struggling with double-digit unemployment and soaring home foreclosures.

Populist Anger At Ben Bernanke Hurting Financial Markets

I mentioned yesterday when writing about Senator Feingold and his opposition to confirming Ben Bernanke for another term as Federal Reserve Chariman, that the populist anger he was trying to tap into for political purposes was a wrong move.    I am quite upset by this actaully as  I usually agree with my favorite Senator.  But this time Russ and some other Senators are trying to use populist anger for political reasons and there is only one thing to tell them.  It must end.

The prospect of a prolonged delay—and possible rejection—of Mr. Bernanke weighed on financial markets. “If there was a sense that Congress really wanted someone better, that would be one thing, but if this is for political theater, that’s particularly dangerous,” said Jason Trennert, chief investment strategist at Strategas Research Partners.

Although seen by many officials and economists as one of the heroes who helped stave off another Great Depression, Mr. Bernanke has been a lightning rod for public anger over the bailout of the banking system and the rescue of insurer American International Group. “It is time for Main Street to have a champion at the Fed,” said Sen. Boxer, who is seen as a potential victim of the voter unrest that gave Republicans a Senate seat from Massachusetts this week. “Our next Federal Reserve chairman must represent a clean break from the failed policies of the past.”

Because at least four senators have used a Senate rule to object to a vote, Mr. Bernanke needs the support of 60 members. According to a Dow Jones Newswires tally, 26 senators have said they will back him; 15 have said they will oppose him. The remaining 59 haven’t said what they will do. Under Senate rules, the earliest a vote could come is Wednesday.

Inside the Beltway, analysts were likening the atmosphere to September 2008, shortly after the collapse of Lehman Brothers, when the House initially rejected the Bush administration’s plea for $700 billion to bail out the banking system. “I think if you wanted to send the worst signal to the markets right now in the country and send us in a tailspin, it would be to reject this nomination,” said Bernanke backer Christopher Dodd, a Connecticut Democrat who chairs the Senate Banking Committee and who has said he won’t seek re-election.

Senator Feingold Should Not Make Ben Bernanke Political Scapegoat

I was dismayed this morning when I heard Majority Leader Harry Reid and Wisconsin’s favorite Senator Russ Feingold both pull the verbal rug out from underneath Federal Reserve Chairman Ben Bernanke.  While I understand that this is an election year, and there seems to be populist fever running amuck over banking policies and large financial institutions, I am befuddled how not allowing Bernanke another term at the Fed helps the national economy.

In fact it will hurt if Beranke is not confirmed.  If there is an unsettling turn-over at the Fed the markets will respond negatively and the economic forward motion, slow and awkward though it may be, will stutter and perhaps cease to be.

Therefore, I am not pleased for what I can only surmise is pure politics when those up for election this fall step in front of the Bernanke issue in hopes of derailing it. 

Is Ben Bernanke perfect and without some chinks in his armor when it comes to the economic woes of the past two years?  Of  course not.  But I think there is every reason to argue that it was Bernanke who also was at the helm to insure that the economy did not get even worse.  While many populists (I do not count myself as one) bemoan the idea that Bernanke helped save giant banks from collapse, they also  fail to recognize the potential harm that would have resulted for millions had such a thing happened.  While protecting the financial system may seem like it was designed only to help the ‘fat cats’ it should be noted by Feingold and others that protecting the major players also helps protect the whole economy.  While that may not fly as good rhetoric at the liberal bean curd dinners it does make sound sense for the rest of the nation.  (Yeah, I am bit upset by the news today.)

So enough with making Ben Bernanke a political football and a scapegoat for the fall elections.  The United States Senate should confirm Bernanke for a second term.