Bernanke gave an interview to the New Yorker for their December 1 edition, and his comments are nothing short of astounding. How’s this for a "The-buck-doesn’t-stop-here-because-we’re-blind" excuse?
Nov. 23 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said he underestimated the impact subprime mortgages would have on the economy, according to an interview to appear in the New Yorker magazine’s Dec. 1 edition.
“I and others were mistaken early on in saying that the subprime crisis would be contained,” Bernanke said. “The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.”
Ah, come on Mr. Bernanke. It doesn’t take a Fed chairman to see that:
(excessive housing supply + low demand) + highly leveraged banks = one big financial crisis.
The list of folks who saw this before you did is long–and often not very distinguished. You of all people should have seen this coming.
If this excuse is dumb, the strategy to rescue the economy was dumber:
Secretary Henry Paulson tried what Bernanke and his Fed colleagues called a “finger-in-the-dike” strategy to keep the financial sector operating long enough so that it could repair itself. As recently as this Sept. 1, the article said, Bernanke thought that strategy would work.
"Repair itself? How does an overleveraged system "repair itself" by doing anything other than unwind? How does an overinflated housing market "repair itself" by doing anything other than by allowing prices to revert to the mean? How would putting up artificial barriers to slow those processes expedite a systemic "repair"?
In spite of this though, Bernanke still receives high marks in some circles. According to today’s Wall Street Journal:
"Bernanke has done a good job in very difficult circumstances," J.P. Morgan Chase & Co. economist Bruce Kasman said in a recent WSJ.com survey of private economists, who said by a margin of 3-to-1 that Mr. Bernanke should keep his job. If the economy is on the path to recovery next year, his policies could be hailed as a success.
A ticker tape parade next year to celebrate Bernanke’s successes is not going to happen. He doesn’t have enough fingers and toes for his policies to be successful.
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What?! These Ivy League Economic Scholars and MBA’s are mere humans? The leaders trusted to manage our money and economy make mistakes? They are not the super geniuses their resumes claimed? Why, that is even more shocking than the housing collapse. Who would have ever guessed?
Igor says: foolish
I like him. Does he have plans to start a hedge fund?
If anyone is looking for conspiracy theories or a really good movie this is it. These people can’t be this dumb. A good job in difficult circumstances? I suppose Mr Kasman has a painting of Alan Greenspan on his wall. 5 bucks says our new pres is not going to step in and do a thing. Same ol Same ol
Freemonster-
If Obama would do nothing, he would be my hero. The more I hear about his “economic stimulus plan” though, I’m afraid he will be “same ol”- only more so.
I, like Igor, am “concerned”
Obama is going to create 2.5 million jobs singlehandedly, wow, apparently, he’s a god.
Only someone in government would boast like that, if you look at local and state governments they are shedding employees, just like the corporations.
And, the nation is broke. I get tired of all the propoganda.
…so that apology to Milt Freidman:
(http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/default.htm)
meant what, exactly?
I mean… didn’t they just DO IT AGAIN???
The Federal Reserve System is no more “Federal” than Federal Express®!!
The FED was created in 1913 by an abominable act of Congress. With a swift stroke of the pen, President Woodrow Wilson doomed the fate of generations. And enslaved the American citizens to a life of servitude, to an elite group of international bankers.
The FED is in fact a private banking cartel, was created by some of the most prominent bankers of the day. Including J.P. Morgan, Rothschild Banks of London and Berlin, Lazard Brothers Bank of Paris, Israel Moses Sieff Banks of Italy, Warburg Bank of Hamburg, Germany and Amsterdam, Kuhn Loeb Bank of New York, Lehman Brothers Bank of New York, Goldman Sachs Bank of New York,Chase Manhattan Bank of New York (Controlled By the Rockefellers).
http://www.endthefed.us
Twist,
I have not heard anything about Obama’s proposed stimulus package. What is he proposing?
Igor says “Worried”
News Alert. 6 of 1, 1/2 dozen of the other. He belongs to the same mob. Igor says don’t be puzzled
Rob, my dad and I talk about the history and role of the Fed every once in a while. Funny you reference JFK on your site. We’ve discussed the possibility that his assassination, along with various crucial events in the last century including even the outbreak of WWII, were instigated expand and maintain the control of the global banking system. New World Order if there ever was one.
Good luck proposing any of that to the mainstream though.