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WASHINGTON & WALL STREET -- STEVE FORBES: BERNANKE HAS 'FAILED'by CHRISTOPHER WHALEN 19 Jun 2013 35 POST A COMMENT“You thought socialism was dead, other than in miserable countries such as North Korea and Cuba? Think again. It’s alive and well at the Federal Reserve, and we and the world are paying a price for it.†-- Steve Forbes, February 12, 2012, “Ben Bernanke: Supreme Socialistâ€Federal Reserve Board Chairman Ben Bernanke is having a bad week. The fun started on Monday on PBS with Charlie Rose, when President Barack Obama said Chairman Bernanke has stayed in his post “longer than he wanted,†effectively firing the central bank chief on national television.Then on Wednesday, after the Fed’s two days of deliberations regarding Monday policy, Bernanke’s held his now routine press conference and proceeded to drop several bombs on the financial markets. The Dow Jones Industrial Average ended up down 200 points in a resounding thumbs down from investors. Treasury bond yields are at the highest rates since 2011, all thanks to Ben Bernanke’s best efforts.The first of Bernanke’s mistakes is trying to be clear and transparent. Markets don’t really like to hear clear, direct statements from central bankers. By trying to be more transparent and open with monetary policy, Chairman Bernanke is actually making the financial markets more volatile. His “hypothetical†example of how the Fed might stop buying $85 billion per month in Treasury bonds and agency paper stampeded Wall Street’s bulls.But the second mistake made by Bernanke is to continue printing money even as the private sector is showing signs of a modest real recovery. As CNBC’s Rick Santelli asked after the press conference: “The one question I want to ask Ben is, 'Ben, what are you afraid of?'"{snip}The sad truth is that Bernanke is caught up in a key fallacy of the Keynesian-socialist tendency led by Nobel laureate Paul Krugman, namely that you can use “a little inflation†to grow jobs. In fact, as former Fed Chairman Paul Volcker noted in our last comment, there is no tradeoff between jobs and inflation. The whole idea of being able to use inflation to grow real jobs is false.“The unemployment rate is not going down because people are not getting jobs,†Santelli ranted further. “I think that the Fed has the tiger by the tail, as much as they think that they have figured this out.â€
My only hope is that when the dust settles that Keynesian economics are thoroughly discredited as they should be.
Dammit Zombie, he was born in Hawaii. I saw the birth certificate.
The Dow tanked today and yesterday just talking about cutting back on the QE. Imagine what's going to happen when he finally pulls the plug on the printing presses.
I must respectfully disagree with your assault on Keynesian economics. I think that the intervention of the state is necessary in times of economic distress to mediate the damages and ensure recovery. Yes of course, economies are cyclical in nature, but that does not mean it is harmful for the state to intervene on behalf of the people. We only need to look at the damage inflicted by historical recessions and depressions compared to the relative moderation of the economic recession today to see the value of state interventions in ties like these.
