Go to PDF Version | Go to Recent Issues
To save time in the future, you may select one of the preferences below. You may update your eIBD preferences at any time by going into My IBD and selecting Update Your eIBD Preferences.
Set Web-Based Version as Default Set PDF Version as Default Set Recent Issues as Default
Get QuoteSearch Site
Daily Graphs Online
Regulation: When Fed chief Ben Bernanke sat before the Senate on Thursday, he was blamed for everything but the Afghan War. Truth is, Bernanke may have kept the U.S. from falling into a Depression.
We're not Bernanke groupies or anything. He's made some mistakes. But the fact is, he is the best person for the job today, and much better than anyone President Obama might come up with.
Bernanke is already preparing what he calls an "exit strategy" for the withdrawal of the extraordinary stimulus the central bank has provided the economy since the fiscal crisis began in mid-2008 — and which may have saved us from a depression. With his term set to expire next month, he deserves a chance to finish the job.
No question, the Fed has created a lot of money, a potentially huge problem. Fed balance sheet assets have soared from about $900 billion in early 2008 to nearly $2.2 trillion currently.
This has pushed up the monetary base — the basic fuel for the economy made up of bank reserves and cash in circulation — from about $850 billion at the start of 2008 to about $2 trillion. Bank reserves, normally around $4 billion, now top $1 trillion — and no, that's not a misprint. That's a lot of stimulus.
An inflation threat? You bet. And all this money sloshing around the economy is no doubt a big reason for the dollar's weakness. But people forget none of this happened in a vacuum.
The Fed, like it or not, is the economy's lender of last resort. Last year and in 2007, as Congress fumbled and dithered, the Fed was the only adult in the room capable of acting. In that context, Bernanke, an expert on the Great Depression, wanted to make sure the 1930s monetary debacle — when the money supply shrank by a third — wasn't repeated.
It might be argued he was too aggressive, buying up TARP and bad bank assets in enormous multibillion dollar tranches, involving the Fed as never before in its 96-year history in the U.S. economy, and slashing the funds rate to a record 0%.
Perhaps. But it's also true the economy was in parlous condition even as he became Fed chief in February 2006 — following three years of unusually loose monetary policy. He had to do something.
Nor was it loose credit that caused our meltdown, contrary to the opinion of many. Congress' own mistakes — in particular, passing the Community Reinvestment Act and letting Fannie Mae and Freddie Mac become bloated, bankrupt tools of liberal social policy — are to blame for our economic ills today.
Eminent Domain: Four years after the Supreme Court told a Connecticut homeowner that no one's house is safe from developers, Brooklyn homeowners may lose their homes to a pro basketball team. On June 3, 2005, by a 5-4 margin, the U.S. Supreme Court effectively repealed the 5th Amendment to ...
Warming Scandal: Despite the incriminating e-mails, administration science adviser John Holdren still thinks man causes global warming. And Sen. Barbara Boxer thinks it's the whistle-blowers who should be arrested. Time was when Barbara Boxer thought it was just fine for the New York Times ...
Russia: The U.S. victory in the Cold War was once viewed as "the end of history." It turned out freedom is not that easy, and ex-KGB operative Vladimir Putin now plans to have history repeat itself. Former Russian president and current Prime Minister Putin, who after more than a decade in ...
President Obama should have declared victory in Afghanistan and begun a withdrawal. His escalation of the war may achieve its goals, but at too great a cost — and without making our nation meaningfully safer from the threat of terrorist attacks. I hope I'm wrong. But my fundamental question ...
The fastest way to destroy U.S. capital markets is to give Congress more control of the U.S. financial system. And yet Sen. Dodd is proposing to create a new agency in charge of supervising banks and bank-holding companies, led by a White House appointee. The leader of that agency and no doubt a ...
Posted By: CaMaven(35) on 12/4/2009 | 1:07 AM ET
I agree that he exercised the skills to help avoid a total collapse, from circumstances due to conditions that he was, in part, responsible for creating. He is abetting the bankruptcy of the country and destruction of the dollar now, as well as helping to usher the USA into Socialism.
Posted By: CaMaven(35) on 12/4/2009 | 1:01 AM ET
The only reason I would like to see Bernanke renewed is for my precious metals holdings to apperciate mightily
Posted By: niteski(150) on 12/4/2009 | 12:45 AM ET
Being a practicing economist the only thing Ben did seriously wrong was to raise rates over 5%. After all it started w/ Volcker, then Greenspan and finally Uncle Ben warning Congress and the Senate EVERY time they went to do SOMETHING with Freddy, Fannie, Medicare and Social Security. Well at least they did something about Freddy and Fannie when they imploded. Maybe they will wait until that happens with Medicare and Social Security. Stephen Jensen
Posted By: kwg1(95) on 12/4/2009 | 12:36 AM ET
Oh contrere. I would not be looking to Washington for smarts or sound economic advice. There are plenty of others who have solutions other than the Keynesian ones to straighten us out and make this country prosper.
Posted By: sevanclaig(260) on 12/3/2009 | 11:09 PM ET
No Ben groupie here either- but there certainly isn't a single one of the ***s in the capital building or the white house holding a bottle caps worth of the smart's Bernanke has. The fact that they would even even get to attempt the pretense of understanding the issues, let alone criticize him over them, is alarming.
To participate in Community areas, please Sign In or Register
Register
Volatility is just one drawback of thinly traded stocks.
Get QuoteSearch Site
Read Full Article »