It is truly remarkable reading, if you believe this morning's commentary.
Bernanke, apparently, was clueless throughout the year as to what was unfolding. Only after the collapse of Lehman was Bernanke attune to the seriousness of the problem. Then, Bernanke and others went over the cliff. Spurred on by Tim Geithner -- whose views have never tainted by knowledge of economics -- Bernanke and the Fed embarked upon the most absurd Fed policy in its history, expanding the balance sheet by over $ 4 trillion dollars in the next five years.
There is, of course, absolutely no evidence, or even sound economic reasoning, that this Fed policy proved helpful. Fed policy and the fiscal stimulus enacted into law in early 2009 preceded the worst economic recovery in modern US history. The casual observer could hardly be blamed for suspecting that Fed policy and the stimulus were two good reasons a healthy economic recovery never materialized.
Now, after the fact, folks like Geithner, Paulson and Bernanke claim that the recession would have been far worse had they done nothing. This is like a religion, since no analysis and historical facts would support this view.
What really happened is that powerful people expanded their personal power at the expense of the country and the economy. It is obvious from the transcripts that Bernanke and Geithner were basically clueless as the crisis unfolded. Yellen, apparently, was worse than clueless as she thought the crisis was over after JP Morgan acquired Bear Stearns. Other academics on the Fed Board, like Mishkin, were even more clueless.
These folks seem to be able to accurately forecast only the past. Or, at least, they cleverly rewrite history to suit their world view. The real truth is that their policies, and the policies of the Dodd-Frank Congress, have badly damaged the American economy and the economic prospects for the vast majority of Americans.
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