Mike Whitney: Bernanke Tightens the Noose

Brace Yourself for a Hard Landing

Ben Bernanke has been a bigger disaster than Hurricane Katrina. But the senate is about to re-up him for another four-year term. What are they thinking? Bernanke helped Greenspan inflate the biggest speculative bubble of all time, and still maintains that he never saw it growing. Right. How can retail housing leap from $12 trillion to $21 trillion in 7 years (1999 to 2006) without popping up on the Fed’s radar?

Bernanke was also a staunch supporter of the low interest rate madness which led to the crash. Greenspan never believed that it was the Fed’s job to deal with credit bubbles. “The free market will fix itself”, he thought. He was the nation’s chief regulator, but adamantly opposed to the idea of government regulation. It makes no sense at all. Here’ a quote from Greenspan in 2002: “I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We have tried regulation, none meaningfully worked.” Bernanke is no different than Greenspan; they’re two peas in the same pod. Everyone could see what the Fed-duo was up to

Now Bernanke is expected to carry on where his former boss left off, using all the tools at his disposal to offset the atrophy that’s endemic to mature capitalist economies. “Stagnation”, that the real enemy, which is why Bernanke supports this new galaxy of oddball debt-instruments and bizarre-sounding derivatives; because it creates a world where surplus capital can generate windfall profits despite chronic overcapacity. It’s financial nirvana for the parasite class; the relentless transfer of wealth from workers to speculators via paper assets. Marx figured it out. And, now, so has Bernanke.

Full Story Mike Whitney: Bernanke Tightens the Noose.