Readers of this site know I rack my brain trying to understand and explain how we got into this financial mess and what if anything we can do about it and after listening to Bernanke’s testimony and Obama’s address, I have finally found the solution and it is to the left and will have to be administered in massive doses as part of the stimulus package for it to work. Bernanke really boosted my confidence yesterday when he said addressing the Financial Services Panel:”We’re not making it up. We’re not completely in the dark.” If you don’t think that is bad enough, he really set every one’s mind at ease when he announced the end of the recession:…”the current recession will end in 2009 and 2010 will be a year of recovery.”
And Barkak confirmed Bernanke when he signed the stimulus bill last week saying:”Today marks the beginning of the end.” He may not know prescient that statement was.
Come on boys, open up. Take your medicine.
So what is a reasonable person (such as myself) to conclude? These guys are either deluded and incompetent or they are not telling the truth. The media tells us daily that the real need is to “restore confidence”. Get banks lending again. More syrup. Open up. We are told that the American people cannot take negative messages. So I guess that means, feed them positive messages.Tell them lies, lies and more lies. The Obama administration is obviously relying on the same people in Treasury and the Fed who were there with bush and clinton. These Keynesian bankers are bound and determined to save the hides of their banking cronies and not the hides of the American people. They should be focused on saving the American people but they are not. They are spending billions and trillions and there is nothing we or our political leaders can do to stop them. And why not? Because the Treasury and the Federal Reserve can do as they like. The Federal Reserve is no more “federal” than the Stagecoach Bar, our local bar here in Wilson….. It is a private organization to serve the interests of the banking establishment and if you or even Congress doesn’t like what they do, that’s tough. The Fed was set up in 1913 to control monetary and fiscal policy but it’s powers have increased over the years so that it is a defacto branch of the government not under the control of its citizens and is able to spend what it wants, when it wants and how it wants with the money of its citizens and those citizens still in diapers. The tragedy of the whole process is that there is not a broad cross section of people deciding on fiscal and economic and budgetary policy. Obama had a choice of economic advisers and diverging from the Citi and Goldman Sachs advisers of the past two administrations, but he didn’t, and this one choice has the potential to doom his presidency and our economy. Is it possible that these people do not understand how serious this economic meltdown is? I have to assume that they understand the global interconnections and the toxic assets and loans going bad right now in the entire world along with the other counter Party risks and deleveraging taking place everywhere. How could they not? We have an insolvent banking system. You don’t need “stress tests” to prove that. Geithner knows that. How could he not? He was at the NY Fed since 2003 for gosh sakes. In a recent blog I showed how Citi was insolvent and I established that from data I found from banking websites. My only conclusion is that as Bernanke said, he is “not completely in the dark.” They must be hoping something will change, that we will get a Deus Ex Machina and the toxic deleveraging will stop, that house prices and sales will not keep falling, that Iceland and Ireland and all of Eastern Europe will not default on their debt, that oil prices will not go up, that the stock market will not keep dropping and so forth. I have no confidence in their decision making abilities . In fairness to Ben and Barak, they have never seen anything like this happen and they are unwilling to admit that we have a falling knife or guillotine which no one can stop. So they have to keep lying and hoping. Our only hope is to try to mitigate these effects and try to save the American people from the worst blunders of the Wall Street bankers . And if Barak doen’t figure this out on his own pretty soon, we are doomed.