Fed Chairman Bernanke: “Too Big to Fail Has Got to Go”

July 27, 2009

(ChattahBox)—Federal Reserve Chairman Ben Bernanke has been busy this past week embarking on a traveling financial road show, complete with an Obama-esque town hall-style meeting and quote worthy quips, as he seeks to defend the federal bailouts of Wall Street and other Fed policies under his watch.

Bernanke made a stop in Kansas City, Mo. to participate in a town hall question and answer session with local audience members selected by PBS’ The NewsHour with Jim Lehrer. The meeting will be aired on Jim Lehrer’s program in three-parts, beginning on Monday.

The meeting took place inside the Federal Reserve Bank of Kansas City, with Bernanke taking questions from a variety of residents, including small business owners and a local banker. Bernanke appeared poised and unflappable, as he fielded questions covering, inflation fears, the Wall Street bailout and the mortgage crisis.

Bernanke defended the massive bailout as a necessary evil to ward off a depression by saying, “I was not going to be the Federal Reserve Chairman who presided over the second Great Depression. For that reason I had to hold my nose and stop those firms from failing.”

But by the same token, Bernanke acknowledged that a better system is needed to deal with major failing companies saying, “too big to fail has got to go,” and he supports the creation of a new division of the Fed to deal with “systemic risks.”

In response to a question about the still troubled mortgage industry, Bernanke responded, “The Federal Reserve has been putting the pedal to the metal,” to deal with the mortgage crisis, by lowering interest rates and purchasing mortgage securities.

Many audience members expressed dismay at the rate that the federal government was printing money; fearful the practice would lead to massive inflation. Bernanke fielded a question regarding Rep. Ron Paul’s (R-TX) bill requiring the Congressional Government Accountability Office, to audit the Fed’s monetary policy. About 250 lawmakers have signed on to Paul’s bill and it seems to be picking up steam.

Bernanke believes such a bill is “not consistent with independence,” of the Federal Reserve. Bernanke’s road show comes at a time as the Obama administration seeks to revamp the Federal Reserve, granting it greater power to deal with systemic risk, while removing the regulation of consumer financial products from the Fed to a new regulatory agency. Bernanke and other Fed officials are balking at Obama’s plan to create a new consumer regulatory agency.

Bernanke was appointed by President Bush in 2006 and his term ends in January. His traveling road show may also serve as a personal campaign to keep his job.

Source


Comments

One Response to “Fed Chairman Bernanke: “Too Big to Fail Has Got to Go””

  1. Charles on July 27th, 2009 1:28 pm

    I suspect that we will see more of Chairman Bernanke and his bank’s supporters as the Bills to audit the Federal Reserve gain more co-sponsors and accurate information regarding the two Bills reaches more of our fellow citizens.

    House Resolution 1207 and Senate Bill 604 will allow us to see where the billions of our dollars have been and are going. Transparency should be more than just a slogan or good idea – we need to be able to “follow the money” to ascertain who truely benefits from the billions of our dollars being given away.

    It appears that the Federal Reserve doesn’t want us to know, however, given Chairman Bernanke’s and Vice-Chairman Kohn’s recent interviews wherein they attempt to make sense of the insensible. Despite the fact that his Central Bank has been inflating the money supply by trillions of dollars, Vice-Chair Kohn had the Orwellian-seeming ability to claim the following: “Any substantial erosion of the Federal Reserve’s monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation.”

    Perhaps someone should explain to the Vice-Chair of the Federal Reserve that by inflating the money supply as it does, his own Central Bank has been and is creating inflation, and a great deal of it.

    The Central Bank has recently hired a lobbyist to “spin” its image – none other than former Enron lobbyist Linda Robertson.
    If this doesn’t raise any mental alarms then our financial future is bleak indeed. One can only hope that enough of us still care enough to act in the best interests of all of us.

    If you would like to find and contact your Representative to promote H.R. 1207 and your own financial liberty by auditing the secretive Central Bank, you may do so using the following link:

    http://www.house.gov

    You may find and contact your Senator to have him or her support S. 604 by using the following link:

    http://www.senate.gov/general/contact_information/senators_cfm.cfm

    Best regards,

    Charles

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