Ben Bernanke has been confirmed by the Senate for another four-year term as chairman of the Federal Reserve. But at the same time, rumors are swirling that Treasury Secretary Tim Geithner will soon "resign" -- which is to say, be fired. One Washington source tells me that a deal has been made between the Senate and the White House. Bernanke gets confirmed, but Geithner has to take the fall.
I guess that's what separates the current populist frenzy in Washington from a common lynch mob. If this were just a lynch mob, they'd hang 'em both. But this is politics. So the president gets to choose which victim dies, and which victim lives.
While this has all played out, stocks have been in a sharp correction. It’s like I explained last week. After the upset win by a Republican in the special U.S. Senate race in Massachusetts earlier this month, Washington has been in a frenzy trying to figure out how to play this sudden apparent realignment of political fortunes. The reaction has been to revert to a dangerous anti-Wall Street populism, in which bankers -- and government officials like Geithner and Bernanke, who help save Wall Street last year -- are vilified.
If you're reading this column, chances pretty strong that are you are an investor. So make no mistake about it. When some politician rails against Wall Street, he's railing against you.
No wonder a recent NBC/Wall Street Journal poll showed that people with investments support Ben Bernanke's confirmation, on balance. Those with no investments at all oppose confirmation. The same poll shows that people with a college education support Bernanke's confirmation. Those with only a high school education oppose it.
I don't mean to be an elitist here, but…
OK, I can't resist. Here's what it means. People who have accomplished something in life support Bernanke, which means they probably support Wall Street. People who have accomplished less in life oppose Bernanke, and probably oppose Wall Street.
So is it any wonder that politicians are trying to lynch Bernanke? And failing that, Geithner? They always play to the lowest common denominator. Especially now that they're panicking, they assume it's easier to pander to the poor and the less-educated than to try to persuade the middle-class and the educated.
What would you do to get attention and look like you're in control? Most of these politicians don't have anything constructive they can do, or even propose. They're utterly clueless. So just distract the mob with a show trial and an execution -- just like in ancient Rome.
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