Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Bernanke, Time, Senate Banking CommitteeWell the New York Times website is reporting that the Senate Banking Committee just approved Ben Bernanke for a second term as Fed chair.This comes just after Time magazine announced that Bernanke is its Person of the Year for 2009. We know that this designation doesn't necessarily mean that the magazine endorses the person in question (remember Hitler?). But here's how the announcement describes Bernanke: A bald man with a gray beard and tired eyes is sitting in his oversize Washington office, talking about the economy. He doesn't have a commanding presence. He isn't a mesmerizing speaker. He has none of the look-at-me swagger or listen-to-me charisma so common among men with oversize Washington offices. His arguments aren't partisan or ideological; they're methodical, grounded in data and the latest academic literature. When he doesn't know something, he doesn't bluster or bluff. He's professorial, which makes sense, because he spent most of his career as a professor. Ok—fair enough. Bernanke is a nerdy, professorial type. But non-ideological? We beg to differ. I asked Jerry Friedman, who wrote Bernanke's Bad Teachers for our July/August issue, to give us his reaction to Time's announcement. Here's what he had to say: In picking Ben Bernanke as Person of the Year, Time Magazine recognizes the man responsible for the little good and much bad that has characterized policy the worst economic crisis since the 1930s. When President George W. Bush appointed him to succeed Alan Greenspan as head the Federal Reserve, Bernanke was Chair of the President's Council of Economic Advisors and an acknowledged acolyte of Milton Friedman. Like Friedman and Greenspan, Bernanke believes in "Say's Law" or the principle that individual action through markets will eliminate unemployment. To Bernanke, the current crisis was caused by government mistakes, particularly the misalignment of currencies and the subsequent Chinese savings glut which, when it flowed into the United States housing market, led to an unsustainable real-estate boom. To address the subsequent financial crisis, Bernanke has been willing to move very aggressively but his actions have stopped with the Wall Street bailout because he sees no broader ramifications of the crisis. Confident in free-market capitalism, there is, for Ben Bernanke, no problem with free capital markets, no concern that growing income inequality or changing industrial policy may be undermining effective demand, and no reason, therefore, to revisit the conservative and pro-business policy decisions made during the neo-liberal era that began in the 1970s. This is the man Time says is not ideological? Hmm... Maybe the analogy is not Hitler being named "Man of the Year," but Obama winning the Nobel Peace Prize... Labels: Ben Bernanke, Gerald Friedman, Hitler, Senate Banking Committee, Time magazine Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). New Head of Senate Banking CommitteeAnd he's a beut. More change you have to see to believe. From Huffington Post:Banks' Favorite Dem Set To Chair Banking Committee First Posted: 09- 1-09 09:40 AM | Updated: 09- 1-09 10:32 AM Ryan Grim If Senator Tim Johnson ascends to the chairmanship of the Senate Banking Committee, the biggest winners will be Wall Street, pay-day lenders and credit card companies. The biggest losers: widows and orphans. No, really. In late 2006, the South Dakotan spoke out against an effort by his fellow Democrats to cap the interest rates that members of the military pay for short-term loans. "This time it's military. Who's to say it isn't going to be widows and orphans or other sympathetic groups in the future?" he griped in an interview with the American Banker. That's the man who's next in line to lead the Banking Committee if the current chair, Sen. Chris Dodd (D-Conn.), as expected, vacates the position to take the Health, Education, Labor and Pensions Committee chair left empty by the death of Ted Kennedy. Meanwhile, Democrats are hoping to push through the most sweeping financial regulations in a generation, including the creation of a government panel that would regulate financial products with an eye toward consumer protection. All of that will have to go through the Banking Committee. Consumer advocates and backers of a regulation overhaul are deeply concerned that handing the committee to Johnson would be a death sentence for reform. "He's got a long track record of supporting small predatory loan companies, pay-day loan companies," said one longtime consumer advocate, who spoke on the condition of anonymity because he would have to work with Johnson as banking chair. In 2003 and again in 2005, Johnson intervened with federal regulators on behalf of pay-day lenders, sending a letter to the Federal Deposit Insurance Corporation, urging it to go slow in writing and implementing tighter pay-day lending restrictions. He urged that regulators consider the perspective of the industry. Read the rest of the article Labels: Chris Dodd, payday loans, Senate Banking Committee, Senator Tim Johnson, Teddy Kennedy Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
