Bernanke's Scorecard

The WSJ had  fairly balanced editorial on Bernanke's tenure at the Fed.  He probably saved us from a second depression, but the long term effects of the rest of his term remain to be seen.  I have been a fan of Bernanke, but as the years pass, I have more doubts.

I think he has aided a stock market bubble, which has been good for many, but not for all.  His main justification for Quantitative Easing, the main force behind the bubble, is the Fed's legislated mission to reduce unemployment. I don't think the Fed can do this anymore.  It's main basis in a trickle down theory that if business booms, then it will hire more people and unemployment will go down.  But today, businesses don't need to hire people to expand.  Between outsourcing and automation businesses need fewer and cheaper employees to produce more and more products or services.  This is one reason that many businesses have huge piles of money sitting in banks (mostly overseas so they don't pay taxes) that they are not investing.  The Fed continues to throw free money at them; they take it, but they don't hire new employees; so, it has little or no effect on employment.  It turns out mainly to benefit the capitalists who use it to buy machines that are much cheaper and more efficient than people.

The zero interests rates have also been hard on honest people.  Some people on Wall Street are honest, but many are not.  Even the ones that are honest have been using the free money to gamble with, trading stocks rather than investing in businesses, with a few exceptions like Warren Buffett.  The bulk of honest people tend to live in cities and towns outside of New York.  People that have jobs would usually like to save money in a simple, safe way.  This used to be by putting money in bonds or savings accounts, but today these pay nothing.  So everyone is forced to make riskier investments, often through 401(k)s invested in the stock market.  This has been great off and on -- great last year, not so great in 2008.

So Bernanke has been great for his questionably honest, slick Jew buddies on Wall Street, and not so good the the average working people around the country who would like a decent return on their savings without huge risk.  This used to be case twenty or thirty years ago.  But the current situation is probably better than the high inflation we had at times back then, which ate up the savings of those same, honest risk-averse people who are losing again today.

It's not comforting that as Bernanke leaves and QE begins to taper off in 2014, the stock market is heading down.  The Fed says QE is ending because the economy can now support itself, but it appears that Wall Street does not believe that.  Wall Street appears to believe that America is failing, that its best days are behind it.  Unless the Fed is giving away free money, America is a losing proposition.  Right now, America is somewhat better off than some of its main competitors, Europe and Japan, for example.  China is probably in better shape, but people keep noticing signs of trouble there, too.  But there are signs of trouble in America, starting with its labor force, but including its biggest financial institutions, which have not really changed that much since 2008.  Nobody has gone to jail, and many of the changes are cosmetic.  Too big to fail is still a problem, and banks continue to produce exotic financial instruments that are probably too complicated for anybody to understand, especially what their long term impact may be.

I am generally pleased with Bernanke, but now I would only give him a "B", whereas a few years ago I would have given him an "A".  But a "B" is better than a "D", which is probably what Greenspan ended up with.

Let Amb. Stevens Rest in Peace

I am tired of having the Republicans make a political issue out of Amb. Stevens’ death in Benghazi.  Let him rest in peace.  He gave his life for his country; that should be an honorable thing, respected by his country.  When Secretary Robert Gates talks about supporting and respecting the troops; that should also apply to Foreign Service officers who are killed serving their country.  Why do McCain, Graham, and Issa have to make him into a political football?  If they hate the State Department, let them use some other weapon than a dead man’s body to whip it.  They want to blame Obama and Hillary Clinton for Amb. Stevens’ death and refuse to accept any explanation that does not arrive at that conclusion.  They say it is a matter of facts, but they have to hypothesize that al Qaeda is a powerful, worldwide terrorist organization that threatens the US at home and abroad, including in Libya.  Because of their all-consuming fear of al Qaeda, they would have had Hillary station a Marine battalion in Benghazi to protect the small mission there, which was not even a consulate.  They are probably right that Stevens was partly responsible for his own death..  He was a small scale Lawrence of Arabia; he was Lawrence of Libya.  He loved the Libyan people and wanted to work with them closely.  He didn’t want to be surrounded by a phalanx of security guards, which would have prevented him from doing his job.

McCain and Graham don’t want to believe the truth, and it is a fact that the truth is hard to come by in Libya; however, the New York Times report rings truer than McCain’s version of the truth.  I believe that as the NYT says, there are numerous militia groups roaming around in Libya, some of which hate the US, although some do not.  The leader of the group which attacked the US mission in Benghazi sounds like something of an idiot.  For some reason he attracted a group of followers who attacked the mission when the Ambassador happened to be there.  It is unlikely that anybody in the al Qaeda group formerly led by Osama bin Laden knew the attack was taking place.  The majority of the Libyan people who knew anything about the Ambassador liked him and would have protected him rather than killed him.

The crux of McCain’s argument is that the Benghazi groups Ansar al-Sharia, Al Qaeda in the Islamic Maghreb, and the Muhammad Jamal Network are all groups created by, and formerly controlled by, Osama bin Laden.  I don’t believe they are.  It’s like saying the Boy Scouts are part of the US Marine Corps because they both wear uniforms and are loyal to the United States.

This is why the US Congress has a 10% approval level.  These people are not entirely stupid, although many are, but they are almost all corrupt, willing to bend the truth to fit their personal goals and ambitions.  I am sorry about McCain; he used to be a good guy, but he has lost his way, probably when he was running for President.  It’s hard to stand up in front of everybody and be rejected by the American people.  While it’s understandable, he still ain’t what he used to be.  And Hillary Clinton did not kill Ambassador Stevens.  

Fischer at Fed

I am not happy about Obama's nominating Stanley Fischer to be vice chairman of the Fed.  Fischer, a dual national, has just completed a term as chairman of Israel's central bank. He has a distinguished record at MIT and the IMF, but I would prefer a Fed governor who does not have divided loyalties.  He can be a dual national or a senior US official, but I don't think he should be both.  If he wants to be Fed vice chairman,he should renounce his Israeli citizenship.  That may be impossible since all Jews have a right of return to Israel,but somehow he should demonstrate that if US and Israeli interests conflict, he will represent the US.

In addition, Paul Volcker, Alan Greenspan, Ben Bernanke, and Janet Yellen are all Jewish.  It looks like Jews control the banking system in the US.  Now we will have as the second-ranking Fed official a man who is not only Jewish; he is Israeli.  Anglos and Christians need not apply. Jews control most of the banking system in the US.  Even if you have a bank CEO who is not Jewish, like Jamie Dimon at JP Morgan Chase, I'm sure he has lots of senior Jews just beneath him.

I am not worried about Jews per se; they are not a monolithic group; they are Republicans and Democrats.  But I worry that .some Jews represent the tiny Israeli tiny tail that often wags the US dog, not only regarding financial and economic policy, but in foreign affairs and military policy as well.  I think Volcker and Bernanke were excellent Fed chairs, but what if we have conflicting interests with Israel, over exchange rates for example.  I would prefer that senior US officials be 100% American.