August 26, 2009

Uncle Ben

To celebrate Ben Bernanke’s reappointment as Fed chief, I think we should dust off this classic video: 

Peter Schiff points out in his video blog that the best indicator for knowing that a Fed chairman is doing a lousy job is the degree to which he’s celebrated as a wise and prudent leader in Washington. Paul Volcker, a man of restraint and foresight in comparison to his successors, was the last chairman willing to raise interest rates up to double digits (now completely unthinkable). And when he was doing it, everyone in Washington hated his guts, even—or rather, especially—the supplysiders. The fact that Bernanke is getting cheers all around is more proof, as if we needed it, that something quite terrible is about to result from Washington’s mad bailout and zero-interest-rate orgy.     

The Bernanke press conference, in which Obama also announced that the national debt would be 9 trillion dollars or something over the next 10 years—who’s counting?—came on the heels of some actual good news with regard to monetary issues: Bloomberg won its Freedom of Information Act suit, and the Fed will reveal whom it made emergency loans to during the crisis. This could get quite interesting…

I support the “Audit the Fed” movement, but let’s be realistic about it all. First, the Fed has no books to audit. Secondly, it’s perhaps the most powerful institution in the whole wide world. Congress demanding to audit the Fed is a lot like a Ukrainian farmer in the ‘30s requesting more accountability and transparency in Stalin’s agriculture policy. We’re going up against something fearsome, powerful, and destructive.

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