Federal Reserve Chairman Ben Bernanke is taking his show on the road in at attempt to help Americans feel better about the Federal Reserve. During a visit to the Fort Bliss headquarters of the Army’s 1st Armored Division this week, Bernanke held a town hall meeting during which he took questions from some of the soldiers. Bernanke tried to sound as compassionate as possible as he assured the soldiers that the Federal Reserve is looking out for the American people and is doing everything that it can to help create jobs. At one point, Bernanke even made the following statement: “For a lot of people, I know, it doesn’t feel like the recession ever ended.” That probably helped a lot of people feel better. A few probably even had a good cry. But what Bernanke did not explain to the troops is that the Federal Reserve is very much responsible for the fact that unemployment is rampant, for the fact that the U.S. dollar is rapidly being devalued and for the fact that we have accumulated the largest national debt in the history of the world.
Ben Bernanke keeps insisting that the Federal Reserve has two main jobs (fighting inflation and keeping unemployment low) and that it is working incredibly hard to accomplish that dual mandate. During his visit with the soldiers he told them that the Fed is very determined to create more jobs for the American people….
“We at the Federal Reserve have been focusing intently on supporting job creation.”
Well, if we are to judge the Federal Reserve by how well it has accomplished its “dual mandate”, then the Federal Reserve has been an abysmal failure.
Since the Federal Reserve was created, the U.S. dollar has lost well over 95 percent of its value to inflation.
Is that something Bernanke should be proud of?
Of course not.
Okay, so the Fed has failed when it comes to keeping inflation under control.
What about jobs?
Well, the first decade of this century was the worst decade for job creation that the United States has seen since the Great Depression.
The sad truth is that a total of zero jobs were created last decade. The following is a quote from a recent article in Washington Monthly….
“If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.”
So what kind of a grade should we give the Federal Reserve for the job that it has done?
How about a big fat F?
The Federal Reserve has been a failure of epic proportions. It greatly contributed to the Great Depression (even Bernanke admits this), it created the conditions for the financial bubbles that greatly contributed to the financial crisis of 2008, and it has brought us to the verge of yet another gigantic financial crisis.
But Ben Bernanke believes that all of us that are criticizing the Fed are just ignorant. He thinks that we just don’t understand the Fed properly. During a recent question and answer session, Bernanke stated the following….
“I think that the concerns about the Fed are based on misconceptions”
Oh, if only the rest of us understood how the Fed works and how they really care about the American people. Then everything would be okay.
During that same session, Bernanke insisted that the Federal Reserve only has the purest motives….
“Our motives are strictly to do what is in the best interest of the broad public and I believe that our efforts to stabilize the financial system, which were ultimately proved successful, were very much in the interest of the broad public”
According to Bernanke, those that work at the Fed are unselfish guardians of our monetary system who are fighting for truth, justice and the American way of life.
Okay, perhaps I am exaggerating just a bit, but you get the point.
Bernanke is trying very hard to convince all of us that the Federal Reserve is just misunderstood and that we should just trust what the “experts” are doing.
So what will the plan be if the financial crisis in Europe blows up?
Well, during his visit to Fort Bliss one of the soldiers actually asked him about that. The following is his answer….
“Although the Fed would obviously do all that we could to maintain stability and to keep monetary policy as easy as necessary to try to minimize the damage, I don’t think we would be able to escape the consequences of a blow-up in Europe”
Oh, he would keep monetary policy “as easy as necessary”.
Isn’t that lovely – I bet that will be great for the value of the U.S. dollar.
Bernanke also told the soldiers that he believes that happy days are ahead for the U.S. economy….
“I do believe we will return to a healthier growth rate. I don’t see any reason why we couldn’t”
So we should just trust Bernanke, right?
He has never been wrong before, right?
Well, let’s check the record….
In 2005, Bernanke said that we shouldn’t worry because housing prices had never declined on a nationwide basis before and he said that he believed that the U.S. would continue to experience close to “full employment”….
“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”
In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets….
“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”
In 2006, Bernanke said that housing prices would probably keep rising….
“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”
In 2007, Bernanke insisted that there was not a problem with subprime mortgages….
“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”
In 2008, Bernanke said that a recession was not coming….
“The Federal Reserve is not currently forecasting a recession.”
A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure….
“The GSEs are adequately capitalized. They are in no danger of failing.”
For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles….
But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.
It is hard to put how stupid that was into words.
Look, if someone wrecked your car again and again would you keep handing that person your keys?
It just doesn’t make any sense.
Bernanke made another statement during his visit with the troops this week that was really bizarre….
“The Federal Reserve is not perfect … but at this point, if you look around the world, you see no alternative”
He has got to be kidding, right?
Of course there are no other alternatives for us to look at! Only a handful of nations on earth do not have a central bank at this point. Iran, North Korea and a handful of others don’t have a central bank dominated by the international banking community but basically everyone else does.
Just because nearly every nation on earth has a central bank does not mean that there are not alternatives to the Federal Reserve system. I detailed a plan the other day that would transition us away from the Federal Reserve system.
It most certainly can be done.
But right now, most of our politicians are standing up for a system that allows private central bankers to spend trillions of dollars bailing out their friends while the rest of us suffer.
The other day, an article by U.S. Senator Bernie Sanders appeared in the Huffington Post that detailed what was learned during a very limited audit of transactions conducted by the Federal Reserve during the recent financial crisis.
According to Senator Sanders, the Federal Reserve made 16 trillion dollars in secret loans to big corporations, Wall Street banks, foreign nations and wealthy individuals during the financial crisis….
“…we learned that the Federal Reserve provided a jaw-dropping $16 trillion in total financial assistance to every major financial institution in the country as well as a number of corporations, wealthy individuals and central banks throughout the world.”
Senator Sanders also says that the audit revealed that many of those running the Fed are from the same institutions that the Fed has been bailing out….
“The GAO also revealed that many of the people who serve as directors of the 12 Federal Reserve Banks come from the exact same financial institutions that the Fed is in charge of regulating. Further, the GAO found that at least 18 current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.”
Wait – isn’t there a huge conflict of interest problem there?
Of course there is.
But neither major political party is making a stink about it.
Sadly, Senator Sanders says that the audit found that there was “instance after instance” where individuals used their positions at the Fed to benefit their own firms….
“The GAO has detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves.”
Wow – you would think that this scandal would have been reported on the front page of every major newspaper from coast to coast.
But that didn’t happen.
In fact, both major political parties continue to insist that there is nothing wrong with the Federal Reserve and that the Fed is doing a wonderful job.
It really is sickening.
Look, we need to educate the American people about the Federal Reserve and we need to make control over our currency a major issue in the 2012 campaign.
The American people should demand that the issuing of all United States currency be immediately returned to Congress as the U.S. Constitution requires.
The American people should demand that no more debt-based Federal Reserve Notes be issued and that from now on only debt-free United States money be issued.
The Federal Reserve has a track record of nearly 100 years of failure.
It is time for it to be shut down.
The choice, America, is up to you.