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.

The Fed hands out a whopping $16 trillion in secret loans

The Government Accountability Office's audit of the fed has revealed new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression.

Among the investigation's findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans. The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates.

The conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed.

In what may be the understatement of the century Sen. Bernie Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street."

Reformed ? How about get rid of it ?

To read the GAO report, click here.