Obama to Nominate Bernanke to 2nd Term as Fed Chief
President Obama plans to nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve, administration officials said Monday night.
The nomination, while expected, comes after Mr. Bernanke has had perhaps the most tumultuous term of any Fed chairman, helping to steer the economy through its greatest downturn since the 1930’s. Mr. Bernanke is a Republican who was appointed by President George W. Bush. Mr. Obama’s plan was confirmed by Robert Gibbs, the White House press secretary.
A top White House official said Mr. Obama had decided to keep Mr. Bernanke at the helm of the Fed because he had been bold and brilliant in his attempts to combat the financial crisis and the current deep economic recession.
“The president thinks that Ben’s done a great job as Fed chairman, that he has helped the economy through one of the worst experiences since the Great Depression and that he has essentially been pulling the economy back from the brink of what would have been the second Great Depression,” an administration official said on Monday night.
Well, there are a few bright sides to this announcement. First, this puts to rest the rumors of Lawrence Summers possibly being appointed as a replacement. Second, as the commercial and prime real estate market continue to blow up, Bernanke will be held directly accountable for why all his programs failed to lead to a sustainable recovery. I predict Obama will soon refrain from making such bold statements about a second Great Depression having been averted. A depression is here and here to stay for long time to come. Muwabi will continue critiquing every Fed decision and giving a fair, honest assessment of the results of these Fed programs. The interesting question will be whether this causes public backlash and leads to more support of HR 1207. If this makes a fed audit more likely, perhaps it’s a blessing in disguise.
(It reminds me of when I actually root against some of my sports teams because the coach is so obviously bad and I’d rather the team loses so he gets fired. Being a Chicago sports fan, this occurrence is quite frequent!)
Just wait a minute…….are you hoping Ben B. fails? He’s your Fed Chairman don’t forget. So, let me make sure I understand… you are not rooting for his obvious misguided policies to work? Hmm..I seem to remember someone being roundly criticized on this site for expressing a similar sentiment on a related matter. I need to go back to old posts and check something. In the meantime, maybe you could refresh my recollection.
Haha I knew this was coming the second I posted it. I don’t want Bernanke’s actions to fail, as it implies the entire economy will probably fail. Perhaps my sports analogy was a little flawed. I’m just sitting back and waiting until they do fail (the Fed has an amazing track record as I pointed out yesterday). When these policies fail and their policies are exposed for what they are, I want Bernanke to answer the questions and sweat in the hot seat of Congressional hearings and public opinion. If you can’t tell, I’m pretty mad about everything the Fed has done, gotten away with, and continue to get away with. Perhaps we’ll see a pseudo admittance of wrong like Greenspan did but I doubt it.
I also see the Fed as slightly different than the office of the Presidency. I think the Federal Reserve is exactly the opposite of everything the Constitution stands for. They’ve “managed” the economy in secret, while robbing the middle class and responsible savers of their property. Jefferson couldn’t have been more right in his reservations against a central bank. I want the economy to succeed more than anyone… my own future as a financial professional and taxpayer is at stake. The Federal Reserve is a detriment to our economy and I want it exposed for what it truly is. So yes, perhaps I am rooting for its failure and a return to free markets. Since Bernanke has been among the most responsible for perverting its purpose, I want him exposed for what his true record is. I don’t even feel bad saying this because the Fed is the one saying how they’re independent of the government anyway!
Danny……..we need you to join the the “fail and fail quickly” movement. We can’t let these misguided bigger and bigger government policies of the BHO regime (I include the Fed in this regime) to gain any more traction. Let them all fail and then move on with more reasoned approaches to solving our economic woes. We must minimize the permanent damage already done by this radical, big government, experiment. We want you on our team. Can we count on your support?
You’re narrowing the problems a little too much… let me show you a great visual:
http://www.zerohedge.com/sites/default/files/images/SeanMaloneRiseFallDollarLarge.jpg
Yes Obama has expanded the bigger government policy but it’s far from a new phenomenon. We need to go back to every administration since WW2 and stop the expansion of the money supply. This is the source of all our problem. If we had a constant supply of money, these ridiculous government expenditures during any administration wouldn’t be possible. Obama and his cohorts are misguided on economics but so is almost everyone else… Bush, Clinton, Bush, Reagan, Carter, Ford, Nixon, Johnson, Kennedy, Eisenhower, Truman and all the Congresses during each. Sure I get frustrated to see our economy being mismanaged each and every day. The bigger source of my frustration is a structural flaw in the economy, permitting these frequent bubbles and recessions to take place. It all goes back to two major problems: fractional reserve lending and the existence of the Federal Reserve. In a perfect economic world, expansion should be predicated on creating more value and trading it to the rest of the world. If this occurs, the currency strengthens and its users are able to buy more stuff. Instead of creating wealth through more production, we’ve created wealth through credit and monetary expansion. The only reason this has been allowed and seemed to work all these years is the size of the American economy. Eventually as other economies are able to challenge this, they won’t put up with the manipulated currency of the dollar. This is still many years away but it will certainly happen at some point. Study your Roman history… they debased their currency for a long time before it eventually created an unsustainable policy where they effectively went broke. (And led to the collapse of the Empire because their expansion was too great to sustain).
So to answer your question, I don’t support a fail mentality with all Obama’s policies. If we replace him with someone else in 2012, the trend in the chart above will continue. Debts will keep getting bigger and the dollar will keep losing its value. I know all his policies and the leftover policies of past administrations are all doomed to failure. Instead, I want to see America’s foreign, education, science, health care, immigration, and moral policies succeed as much as possible. I got mad at all the liberals during the Bush administration that were actively rooting for our failure in Iraq and in the War on Terror. I get equally mad at the conservative crowd that wants Obama to fail just because he comes from the Democratic Party. I want America to succeed and don’t care who or what policies get us there.
Economic policy on the other hand is doomed to failure no matter who is running the show. I’m hopeful that the Federal Reserve gets audited and the public demands its dissolution. I’m hopeful we eventually find a leader that understands what needs to be done and cut off the American Ponzi strategy of governance. I’m hopeful that the fractional reserve system of banking is exposed and restrictions are made on lending and creating money. Therefore you can count on my support for these items but I will never root against all the other issues associated with my country. If Obama or any other President does something wrong in these areas, I will hope that policy fails. (I know it will eventually but would rather see us make progress on these issues than further expand them).
OK, OK…….i get it. Here is my simple point though………BHO, unlike any other pol I can recall, actually expouses big government as the solution to our challenges. This includes social re-engineering of American society he believes is severely broken. So, misguided Americans elected a left wing radical, black theology trained, community agitator to fix our society “he” believes is broken? Who the hell is he? (one of those rhetorical questions Danny since we know exactly who he is). Remember BHO’s Joe the plumber comment “we need to share the wealth”. Now you don’t need to be an elite UofI educated finance major to understand what that comment means….return the wealth of the country to its rightful owners. So, in my simple state teacher’s college mind I can separate big monetary government policies from big social government policies (eg. universal health care, tax the rich, anti big business attitude, big labor union support, amnesty for illegals, take over of GM and other industries, salary caps, free college, free cell phones, free cable TV, free internet, free Big Mac’s….and the list goes on). The point I have made many times is that we can’t allow what this guy and his team of useful idiots consider “change we can believe in” to continue unchallenged. No one wants BHO to fail just because he is a Dem and I would guard against saying it at the risk of joining the useful idiot club(watching too much Olberman and Madow I suspect Danny). What we want is a return to a more balanced approach to change. The only way to accomplish that is through the ballot box and the only way that will happen is if Americans actually see and feel the failure of his policies…..and I don’t really care which ones fail. We tend to focus on the misguided economic policies on this site because we understand the lasting and permanent effect many of them will have on our personal net worth. We can’t rely on the state controlled media to point out the failures so getting Americans to “see” the failures is up to the grass root “fail and fail quickly” movements. We still want you on our team Danny.
Finally, and I am running out of steam here, I do recall my Roman Empire history and observe that currency debasement had a lot less to do with its collape then changing “social conditions” did (eg. religion and unmanagable expansion). Say……unmanagable expansion sounds a lot like “big government” doesn’t it Danny?
First a little history… yeah you’re definitely right and there were many reasons for the Roman empire collapse. The biggest one in my opinion started with the currency debasement. Near the end of the Roman Empire, the East (later Byzantines) was thriving because of real economic production while the West was much weaker economically. Their only economic strength came from its capital Rome ruling the empire and dictating its currency policies. Eventually, the currency was so worthless that the West could no longer stand on their own, collect taxes, and enforce their borders. Rome was conquered and the empire was destroyed. Obviously such a historic event was more than just about currency but it was still a significant contributor. Whether this is the primary cause or not, I see a lot of parallels between the latter years of Rome and current day America. I think our wonderful politicians should get a mandatory history lesson (and throw in economics while they’re at it!)
I understand your point about Obama radically believing in more government and income redistribution. It pains me just as much as anyone to witness. I think his intentions are noble but his methods are just misguided. I believe the gap between rich and poor has grown out of control but am confident about the reason. Ending the Fed’s inflation policies are the best way to alleviate this problem but clearly Obama doesn’t understand that. Taxing business and the wealthy will never work. Here’s how I’d summarize my opinion… I dislike what Obama and his liberal cohorts are doing to this country. I also dislike what the Republicans of the last century have done. We’ve been through regimes from both sides of the aisle and it has all led to the where we stand today. Both sides have left a mess in virtually every major issue.
So here it is… I will be a proud member of the team but your team needs to join the free market team. Membership requires criticizing the entire system though! Barack Obama, George Bush, Robert Rubin, Hank Paulson, Harry Reid, Mitch McConnell, etc, etc- they’re all the same. We both want exactly the same thing… I’m just trying to make the point that fixing the fundamental problems of the system would ensure the Pelosi/Reid/Obama team would never exist. That is why I focus my attention on promoting free market principles and criticizing the most obvious instances of government control (and it all starts with the Fed)… that is change we need and can actually believe in!
Well said Danny. I know your strong and clearly presented position on the Fed, but expecting change in something that is so ingrained into the political fabric will likely lead to dissappointment. Maybe we are destined for failure because we have strayed so far from free market principles….reached the tipping point if you will. After now going back and rereading some of your Fed posts, I believe the Fed is the biggest of the “big government” policies we face and I am not optimistic it will be altered in any meaningful way. Not a great way to start off a Monday morning.
No I’m not entirely optimistic either. I do think the Fed we will learn the recipients of the bailout money in the near future and will see a Fed audit bill passed by the end of the year. My worry is that it will be a watered down version that creates the illusion of an audit but doesn’t really do much. It’d be the best strategy for the pro Fed team. I think an Obama veto is also a possibility but would be a political nightmare for his re-election bid. Honestly, a veto on this issue could be the single factor in his 2012 defeat (although I’m increasingly believing it will happen regardless). If we can get a real audit, however, I think it will create enough public disgust that it could lead to the Fed’s undoing. The problem with that is we’ll likely get a central bank with more Congressional control. No matter how you cut it, we will never get the desired outcome.
The interesting part is that deflation is the inevitable reality of the next 5-10 years. No matter how hard the Fed/government try, they will not be able to reignite inflation, guaranteeing we’ll end up like Japan in due time (one of the reasons I posted the article). We’ll have a massive debt with no results to show for it. Amazing how history repeats itself not once but many times and nobody learns from it.