Ben Bernanke re-nominated for Fed chairman; why do Obama and Congress love Bernanke so?
Aug 31, 2009 Peter Schiff, economy, financial, politics
It is official, Obama re-nominated Ben Bernanke for chairman of the federal reserve. Bernanke still has to be confirmed by the Senate, but that is likely to happen. Why? Why do Obama and the Congress love Ben Bernanke so much?
Obama and the Congress love Bernanke because he makes their lives very easy. Obama can’t run his huge deficits without Bernanke. Congress doesn’t have to cut spending with Bernanke. Obama wants desperately to keep Bernanke around in order to run his socialized health care system. All of the deficit spending is possible because unlike Paul Volker, Ben Bernanke is letting Obama and Congress off the hook by monetizing all the debt.
Politicians hated Paul Volker because he raised interest rates to over 20% during his chairmanship. They all wanted him to resign because they could no longer run deficits that they thought they needed to get re-elected. Alan Greenspan, often heralded as the greatest Fed chairman ever, lowered interest rates to 1%, effectively monetizing debt through the expansion of the money supply via wide open credit from the Fed. Ben Bernanke is doing the same thing – delaying the inevitable economic pain and suffering – by lowering interest rates to a staggering all time low of 0%. Of course Obama and the Congress love Bernanke! They can continue to spend, spend, spend, with no short term consequences. The consequences are delayed and transferred to our children, who will inherit the debt and won’t be able to repay it.
See Peter Schiff’s great video below.
Tags: ben bernanke, congress, economy, Federal Reserve, Peter Schiff
September 20th, 2009 at 9:27 pm
They don’t love him but switching captains in mid-stream isn’t a good idea.
September 20th, 2009 at 9:47 pm
Thanks for the comment Harrison!
I have to respectfully disagree. Of course the current administration (and the last one) love Fed chairmen like Bernanke because, like I said in the article, he allows them to continually push the debt ceiling higher and monetize the debt. The huge spending marked by the Bush and Obama administrations simply would not be possible if interest rates were set by the market. 0% interest is artificially low and it is designed to get everyone drunk on credit so that it *seems* like we are fixing the economy.. when we are actually just making it a lot harder on ourselves later when we (or our children rather) have to pay these debts.