Yup, that’s Ben Bernanke. The early years.
Well no kidding Mr. Bernanke. What makes you think that? Now?
It should be noted that it is very hard to write campaign checks from prison. That is really frowned upon. Outside of the big house however funds can flow to influence peddlers freely. And Obama made it clear who the bankers owed for their “freedom” when he explained to a group of senior banking executives post-acute crisis that the only thing standing between them and the “pitchforks”
It happens. It hasn’t for a while. But it happens.
Still, pretty crazy if you think about it.
Cheap money feels good initially. Nearly everyone is happy when central banks open the floodgates (or helicopter doors) and cash spills into the economy. Hooray! Money! Why is it here now instead of yesterday? Who knows? Get while the getting’s good. Look, the stock market’s rising – whoopee! Monetary tequila. Bottoms up!
But the morning, the aching, head thumping morning always comes after such a binge.
“All I know is Ben Bernanke was tending bar. Goldman Sachs was buying me drinks.
Mr Reich generally needs to be taken with a grain of salt. He has been, and as far as I know, continues to be fundamentally wrong on the most important economic questions. Saying that, he has flashes of insight on political issues, and here’s one.
Of course we issue the standard disclaimers with this piece that we do with many of the folks we choose to feature here who we feel are too enamored with the state.
Michael Bloomberg said this recently and he is right. If one had assets prior to 2008, particularly of the stock variety, there is a very good chance that your portfolio is looking pretty good these days. The Fed through various means has inflated markets artificially.
If however one had no assets prior to 2008, or went bust during the chaos of the Crash one is probably still struggling.
The Fed, the central planners, have made the rich much richer.
Caterpillar sales have been declining for over 2 years. Latin American sales have fallen off a cliff. Caterpillar makes heavy industry construction equipment. Draw your own conclusions.
It is interesting to note that the decline is not as sharp as during the “Great Recession,” it’s more stretched out and has been shallower. However it has been steady and steady declines are the thing of maturing depressions.
If you really want to understand why the crony capitalist system is so insidious as well as ubiquitous I highly recommend listening to this bit from the master Murray Rothbard. If you really want to get what is so messed up about government and the “privavte sector” partnering up, one must know at least a little bit of his work.
Warning though. Rothbard can rattle one’s whole understanding of politics and economics.
OK, so Greece is messed up. We know that. It’s not a surprise. The call for a referendum from Athens was a surprise but not the end of the world.
The reason we had the Crash in 2008 was because the Fed kept rates too low for too long. In response to the tech implosion and then the 9-11 attacks Allan Greenspan and the FOMC panicked and ended up inflating a worldwide housing boom which morphed into the disaster (to put it mildly) which is the Great Recession. There’s more to it than that but that’s basically what happened.
Consider now that Ben Bernanke (and Janet Yellen) have kept interest rates much lower for even longer than Greenspan did.
The principal author of our current economic ills doesn’t seem to know history any better than monetary policy.
When the Obama administration announced that it was planning to replace Alexander Hamilton on the ten dollar bill with an unspecified woman, former Fed Chairman Ben Bernanke leapt into the fray. He said he was “appalled” by the decision since Hamilton “was without doubt the best and most foresighted economic policy maker in US history.” He proposed that Andrew Jackson be removed from the twenty dollar bill instead.
Congressman Hensarling deserves some praise. He has spearheaded the effort to kill the Export-Import Bank (let’s hope that thing gets put in the grave) in the face of massive lobbyist firepower and now he’s putting the Fed squarely in his sights.
Hensarling’s area of interest with regard to the Fed is the 2012 leak of Fed Minutes to prominent insiders 19 hours before the the public got to see the information. This is important, market moving information which if gotten early could have been very “helpful”
The key drivers for the increased inequality (as we have said many times before) are the financialization of the economy and the emergence of a truly crony capitalist system. The two are of course entwined. The cronies enjoy bailouts and bonuses from banks which get bailed out. The unconnected get to do the bailing. (In various ways.) That’s basically the gist.
Ole’ Helicopter Ben put this long emerging trend into overdrive. But don’t blame him for inflating the assets of the already wealthy while the rest of the country was left behind.
Stan Humphries – the author of the attached article – and I agree that home ownership often is not such a good deal. For many it is a downright terrible investment. More people are awakening to this fact, and that is a good thing.
But we differ on why it is such a bad deal for some.