Ben Bernanke — Pathetic, Duplicitous or Just a Good Soldier?

Fed Chairman Ben Bernanke is out of options and luck.

Of course, he couldn’t say that at Jackson Hole. Instead, he had to pretend that his magic was still strong and would be used, if necessary. By customizing mixtures of various powders (some apparently never used before), he would produce potions that would yield proper growth and balance to the US economy.

That Mr. Bernanke has the power to accomplish various things is not doubted. His power to destroy is very real, but his power to create or heal is much less so.  Economists know that our economic problems are too much debt, distorted relative prices and mis-allocated resources. Correcting these are not within the Fed’s powers.Mr. Bernanke’s predecessor, Alan Greenspan, was worshiped and nicknamed “The Maestro” for his presumed ability to manage the economy. The press never bestowed such a halo on Bernanke, but they still provide him undeserved respect. In hindsight, Greenspan is viewed as the man most responsible for the current mess. It is likely the passage of time will not be kind to Mr. Bernanke either.

The Federal Reserve was questionable at its formation. Its creation was arguably unconstitutional, and its track record has been dismal. The ruling elite has always cloaked it in regal or majestic terms in an attempt to justify its validity. It is a valuable tool for government, but not so for the people. Recently the Fed’s secrecy and even its necessity have come into question. So has its ability to manage the economy.

One wonders whether Bernanke truly believes what he says. His record of forecasting is dismal, evidenced by numerous, erroneous forecasts. If he is incapable of forecasting existing conditions, what makes him believe he is capable of altering (unknown) future conditions?

If Bernanke believes he can heal the economy, he is delusional. If not, he is a modern-day version of a con-man. The reality is that the head of the Federal Reserve has become little more than an institutionalized version of Elmer Gantry. For those who have seen behind the curtain, any Federal Reserve Chairman is little more than the Wizard of Oz. Unfortunately Mr. Bernanke happens to hold the position at a very difficult time making him appear as a pathetic figure who must pretend to have matters under control. Whether he is merely ignorant or is playing his role as a good soldier is moot.

Mr. Bernanke is destined by history and perhaps his own ego to be a pitiful figure. He is not a bad man or unintelligent.  He is in an impossible position. The US passed the tipping point of being able to honor its debt and social obligations around two decades ago. The Federal budget is out of control and adding to the problem daily. There is no longer any way to cover the problem nor escape its inevitable end.

Mr. Bernanke referenced “unconventional methods” at Jackson Hole. Of course there were no specifics. The reality is that we have used “unconventional methods” for the past two years with little to show for it. Some were unimagined both in form and dosages.

What else, other than Bernanke’s helicopter drops are left? The Fed is approaching its desperation point. Get ready for “unconventional” QE in dosages never before imagined.

Prepare!

This was originally posted on American Thinker

5 Comments

  1. Economists know that our economic problems are too much debt etc, hell no! they do not know anything at all the economic problems as all humanity problems IS CAPITALISM which embodies all the evils included corporate socialsim aka fascism which is now the new norm the new world order with this monstruous machine the militaro industrial complex. As long as we refuse to see that we will be doomed soon or late. It has taken a long long time(in reference to a human life span) for capitalism(the arising of the I me mine self-importance the nemesis of human kind) to show its full blown ugliness and to keep talking about solutions within this ugly system is utterly stupid nonsensical and perverse.

  2. Monty,
    In 1971 money was no longer backed by gold. As I read your blog and the blogs linked to your blog, it seems that any administration after 1971 was and is doomed, as is our country. My question is; What help is it to bash any of the administrations after 1971? And how would you direct us out of this dilemma? Or is it just that we are forever doomed? Of course you know that it is contrary to Americans to not love their country and although you may be very actuate in your assessments you run the risk of alienation. I sure that doesn’t concern you to a great degree, but it may give the illusion to some that you want America to fail. I’m sure you don’t. JB

    1. Boddychaw,

      The problems actually started before 1971. Nixon abandoned the gold standard not because he wanted to but because the US did not have the gold to back the dollars being demanded for redemption. This was clearly a default on the part of the US government. Other defaults, although not involving gold, have occurred since. Social Security has been defaulted on any number of times. I say that not in the sense that any payments were missed but that the promises were reneged upon and changed.

      Without gold constraining the dollar, politicians began to assert themselves. The Fed was complicit. In terms of magnitude, most of the damage was done after 1971. There is no administration that is innocent. Some are more guilty than others.

      Monty

  3. Monty

    I don’t see many Responses to the articles you right, or those of others to which you link. I think this says the traffic is light at your site. Because of that I wanted to simply post a thank you. EconomicNoise is book marked and is an everyday mandatory stop on my trip around the web. Your writing is incredibly efficient. Maybe that befits an economist. You make your points clearly and powerfully, without a lot of extra words. I am sharing your site with friends and family. Others who read this should do the same. It is very important right now, no matter what our political persuasion, that we have a clear and accurate understanding of where we are economically. I am usually a little scared after reading your posts, but then reality is what it is. Better to know the truth. And sadly, it is pretty hard to find these day. Again, thank you.

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