Terry Ponick : Stop bashing poor Ben Bernake

The Washington Times has published a  piece written by Terry Ponick Note to Republicans: Stop bashing Ben Bernanke in which he tries to defend the FED and Ben Bernake, and immediately gets b-slapped back to reality by Mike Shedlock at Mish's Global Economic Trends.

Excerpt from Terry Ponick's article :

In point of fact, whether the Fed’s efforts to provide monetary stimulus to the economy are Keynesian or post-Keynesian is not the real issue here. In the case of an economic emergency (such as 9/11) or an increasingly deflationary environment (such as our current era when plunging housing prices at least initially began to lead to a disastrous decline in the value of commodities), the classic initial fix is to flood the market with liquidity, gradually withdrawing the excess as soon as practicable to avoid the opposite problem of an inflationary environment.

That’s what Bernanke’s Fed has been doing for roughly three years now, yet it hasn’t seemed to have done much good. But the reason is not that the Fed’s policies are necessarily wrong. It’s just that there’s always an implied support expected from the Federal government, courtesy of a competent, concerned Congress that tailors new legislation to aid and abet the efforts of the Fed. In other words, when all the wagons are pulling together, the U.S. can usually extricate itself from any mess—and that means even the current morass.

It’s time to stop the Fed-bashing. It’s time to respect Bernanke for having done what he’s done. And it’s time to give him the hand that he’d been politely requesting all along for those who’d care to listen.

After ten years of  failed stimulus packages, QE1, QE2, and now a new round of stimulus  coming disguised under different names such as the "Jobs Bill"  what do we have to show for it ?  more debt,  higher unemployment, and a economy that is worse than it was when the Keynesian clowns took over. That is exactly the point.

Mish's Global Economic Analysis

Quite frankly that's total bullsheet. History shows the Fed is responsible for blowing bubbles of ever increasing amplitude over the years. The only winners have been banks and Wall Street.

Bernanke deserves no respect. He is an academic wonk with no idea what caused the great depression, and is clueless as to what to do now.

Terry Ponick correctly bashes Democrats and Republicans in his article, but to say the Fed's polices are not wrong is ludicrous. There should not be a Fed in the first place, thus any policy of the Fed can logically be considered wrong.

The only thing that is true is the way in which Perry blasted the Fed is wrong, and I hope that costs Perry the nomination in favor of Chris Christie.

I am not sure I share Mike "Mish" Shedlock's enthusiasm for Christie, yet. Nor do I think that Perry's initial missteps in the campaign will hurt him long term. I am still open on that issue. Let the vetting begin for the presidential election in 2012,  unlike in 2008 when when a "prohibition on thought" thrust an un-vetted, inexperienced  pop-cult  figure into the White House.

And let the fed bashing continue. It's nothing compared to the bashing the American people are taking at the hands of the Keynesian clowns.

Keynesianism & Multiculturalism Failing

After the United Sates got slapped with it credit rating downgrade, much of what has come out of the White House has been political bantering, and denial. Nothing will happen in the U.S. to address it's credit and debt problems until after the elections in 2012.

Meanwhile Europe is buzzing with accusations that multiculturalism has failed. In the wake of the riots in London after Britain implemented austerity measures to reign in it's spending, and the riots and demonstrations in Greece, Europeans are worried that this is just the beginning of a savage return to austerity. The concept of multiculturalism seems to be failing all around Europe.

The one who started the trend was German Chancellor Angela Merkel. “This approach has failed, utterly,” she said

Read more here

To make matters worse, on the heels of the riots and debates on multiculturalism along comes as short but accurate message from Urs Paul Engeler on the Failure of Keynesianism

It is a short message and the external ink is in German, if you read German you can find it here , if not, I've posted below ;

Die Weltwoche - Switzerland | Thursday, August 11, 2011
Urs Paul Engeler on the failure of Keynesianism

The current economic crisis shows that the state has failed to manage the economy and that politicians have too often adopted the Keynesian approach, writes journalist Urs Paul Engeler in the conservative weekly Die Weltwoche: "By following today's apologists of the British economist John Maynard Keynes (1883-1946), the so-called 'welfare' states pumped too much money (which they didn't have) into consumption: into pensions for all (Europe), exorbitant armament (US), endangered industries (both), and finally bailouts for ailing mortgage banks (also both). This intervention was celebrated by Keynes' disciples as the 'return of politics'. In reality the hopelessly over-indebted states only exacerbated the crisis. Today they are locations of insecurity.

Those who argue that the state should be active with funds, subsidies and interventions - in short that it should perpetuate the debt economy - turn the wheel in exactly the wrong direction."

Emphasis mine

So far the U.S. has not had the same experience among ethnic minority communities that has been seen in Europe, so far, but we haven't begun to implement austerity measures and spending cuts either.

If your feeling a little uneasy about the stability of the world, and have a sense that it may be in for some big changes soon, your probably right.

What to do ? who knows. It's old axiom in business when beginning a new project or a implementing a new strategy to make sure you have an exit strategy, just in case things don't work out. I don't think the Keynesians,or the Multiticulturalists thought about that. They just knew everything would be fine once we arrived at cloud-cuckoo-land, maybe not ?