Slippery Ben Bernanke Speaks Sideways

From the wires today:

Federal Reserve Chairman Ben Bernanke said Monday he is hopeful the economy will gain traction and not fall back into a “double dip” recession. “My best guess is we will have a continued recovery, but it won’t feel terrific,” Bernanke said. That’s because economic growth won’t be robust enough to quickly drive down the unemployment rate, now at 9.7 percent, he said in remarks to the Woodrow Wilson International Center for Scholars, a nonpartisan research group.

What kind of ‘jobs’ do these people hope to magically appear? Mall workers? Best Buy sales clerks? Let’s be honest they know there are none. If there was a need for legitimate hiring, and there were profits to made, the private sector would hire. They are not. Draw the conclusion.

One more thing? Ben’s ‘best guess’ comment irks me. Consider his fine ‘guess’ from May 17, 2006:

“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,” Bernanke said.

And this guy is listened to still today.

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48 thoughts on “Slippery Ben Bernanke Speaks Sideways

  1. So Mr Velshi is ‘dishonest’, and Mr Bernanke, a civil servant with no political axe to grind, is ‘slippery’?

    Michael, I get the impression you’re not very trusting! 🙂

    Jeff

  2. Jeff, it appears you come at your views of public persons with an assumed “good guy” view…so when you are exposed to facts…you ignore? Bernanke’s words are his words. Do you trust him? And if so, why?

  3. Yes, I do trust Mr Bernanke:

    A. He is in a position of trust – indeed, one of the most important positions of trust in the world. You don’t generally get appointed to that kind of job if there are any question marks over your integrity.

    B. He is an unelected civil servant. He has no reason to care about what voters think of him, and therefore no reason to deceive them.

    Jeff

  4. Jeff, I am talking about his competence. Do you trust his competence based on his track record? If so, why?

  5. I’m not qualified to talk about his track record.

    The current issue is whether he is slippery, not whether he’s good at his job.

  6. Jeff, Bernanke has an agenda — it’s not a secret.

    Are you qualified to comment on how little he apparently knew in 2006 in the comment above? Do you find anything odd that a guy who is paid to know something, knew so little? Better yet, do you really believe he knew so little?

  7. Yes, I do.

    Had Mr Bernanke forseen the storm that lay ahead, he’d have done everything he could to prevent it. That is, unless he were corrupt (and if there were any evidence of this, he’d have been removed from his office and possibly faced criminal charges).

    And consider this. If Mr Bernanke did know in 2006 what was to come, then so presumably did Britain’s then Chancellor, Gordon Brown. Had he done so, he could have used the fact that London is one of the world’s major financial centres to try to avert the crisis (and thereby avoid a humiliating election defeat). The fact that he didn’t shows that people in the highest echelons of government on both sides of the Atlantic didn’t appreciate the scale of the threat.

  8. Jeff,

    Bernanke is a politician. Consider the quote Michael posted, “…we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system”. What was he going to say, “we’re in deep s**t”. Bernanke, Greenspan, Paulson, among others knew the economy was in serious trouble, but like a good politician, he told the public what they wanted to hear, “It’s ok. I have everything under control”. That’s what politicians do. They tell us what we want to hear. Personally, I don’t blame Bernanke as much as I blame the clueless citizenry for looking to Bernanke, and other politicians, as their savior. He may not have been elected by the citizens, but he is a politician nonetheless.

    “Had Mr. Bernanke forseen the storm that lay ahead, he’d have done everything he could to prevent it”. You trust Bernanke (and his ilk) to prevent something they helped cause in the first place? What could he have done? Lower interest rates to zero? Oh, wait, he did that. The market is going to go where it’s going to go. All the Feds do is delay the inevitable.

  9. Jeff, so Bernanke, Buffett, etc. — they thought all was rosy in 2006? Come on.

  10. Todd –

    Had Mr Bernanke forseen what was going to happen, there are things he could have done, such as pressing for laws to stop toxic debt being sold on. He might have even managed to persuade President Bush to launch a War on Irresponsible Banking! 🙂

    Michael –

    I’ve no doubt Mr Bernanke had concerns about the sub-prime loans. Whether he realised the world economy was careering towards a cliff is another matter, however…

  11. I hardly think it’s ‘Pollyannish’ to assume that the Chairman of the Federal Reserve has the best interests of his country at heart! 🙂

    I’m sure Mr Bernanke has human weaknesses, but I doubt he would choose to disregard an impending financial meltdown!

  12. PS I know this is a bit off-topic, but are you also a conspiracy theorist when it comes to 9/11?

  13. Jeff, you are extremely naive about how media and government work and trying to deflect that naivete by referring to me as a 9/11 conspiracy nut doesn’t help your cause. I don’t say this to be derogatory, but most likely your employment, education and political views would shed light on this thinking of yours.

    Note: My formal education and informal education (1 and 2) are widely know. No one has to guess how I came to my views.

  14. Michael

    I didn’t call you anything (and having read Trend Following, there is no way I would call you a nut!). You seem distrustful of people in power, so I wondered what your take on 9/11 conspiracies was.

    You may be right about how government and the media work for all I know. But I don’t believe in calling anyone dishonest or slippery without compelling evidence.

    In answer to your final point, I am a professional gambler (hopefully soon to be a professional trader!), I have a BA(Hons) in Sociology and I am right of centre politically speaking. I’m not sure what this tells you, however…

    Jeff

  15. Dan K –

    No I didn’t, although Michael clearly thinks there was a conspiracy as regards sub-prime loans, so therefore he is a conspiracy theorist…

    Jeff

  16. The reason millions of Americans have been killed in mutual funds and real estate? They blindly trusted people in power.

    Next time, when you want to debate and be taken serious, don’t use the fall back (which you have used many times now): “I don’t really know…”

    Yes, I know.

    Note: If I used the word ‘conspiracy’ I stand corrected, but did I? Additionally, Jeff you would do yourself a big favor by reading ‘Human Action’, ‘Atlas Shrugged’ and ‘Fountainhead’ — for starters.

  17. Michael –

    Thank you for the advice, but it would be slippery and dishonest of me to comment on things of which I know nothing. 🙂

    Jeff

  18. PS No, you didn’t use the word conspiracy, but that seemed to be what you were driving at. If I’ve misunderstood you, I apologise.

  19. It seems that the argument is whether Bernanke knew that the crash was coming or that he couldn’t figure out that it was coming. Not good either way.

  20. Devin – I agree, although in fairness to him, it’s easy to be wise with hindsight. 🙂

  21. When are people going to figure out that 12 guys setting prices in a secret room doesn’t work. I thought the U.S.S.R taught us that central planning fails.

    @Michael – Cool it down on pointing out government incompetence. They’re creating all the big trends 😉 .

  22. Jeff, you seem to be such a trusting soul. You can come over to my poker table anytime.

  23. Don’t get me wrong. I don’t believe that people in power always tell the truth. For a start, I believe that, at least where I live (the UK), the public were mislead about the case for war with Iraq.

    But equally, when I hear a politician speak, I don’t immediately think ‘Why is this bastard lying to me?’ 🙂 Generally speaking, people in power know that, if they abuse their power or tell lies, they will get caught out, so it’s in their interest to act with integrity. Yes, I know history is littered with counter-examples like Watergate, but I believe they are the exception, not the rule.

  24. Jeff, I think its time for some classes in politics. Politicians have one goal and one goal alone: to sit in the chair that gives them power. EVERYTHING they do or say is designed for that goal — not making your life better.

  25. That’s a cynical view Michael – what is the point of power for power’s sake?

    Politicians often work extremely long hours when they could be earning far more in the private sector. Is it not possible that at least some of them make that sacrifice because they are passionate about improving people’s lives?

    I think most people want to leave a legacy to the world – that’s part of the reason why people have children – so why assume politicians are any different?

    Jeff

    Jeff

  26. Jeff, I am not in la la land. I am a realist with some experience. Cynical? If the truth is cynical — so be it. Politicians work long hours? Cry me a river. Doing what? Exactly. Time to read my three book recommendation and gain some experience/education in matters you are simply not familiar with.

  27. Michael

    I think we will have to agree to disagree on this matter. 🙂

    I’ve no doubt your knowledge of politics is far superior to mine, but you have no provided any evidence that politicians are unprincipled and hungry for power alone. To use a trivial example, you cannot tell me that George W Bush wasn’t genuinely passionate about protecting the US from terrorism!

    Jeff

  28. Jeff, you don’t want to learn, you want to argue. Also, while you may not realize that you do it, arguing with ‘Red herrings’ is trite.

  29. On the contrary, whilst I do enjoy a debate (as, I suspect, do you!), I do want to learn.

    But I think we’ve gone as far as we can with this discussion. 🙂

    Jeff

  30. Jeff, you were given book recommendations. Instead of reading them, you show back up and say no evidence was provided and that you want to agree to disagree. Ridiculous arguing technique.

  31. With respect, I’m not sure that books published in the 1940s and 50s can provide much evidence as to the state of politics today.

    That’s not to dismiss the books. I’m sure they contain interesting ideas which apply as much today as when they were written. But whether you can extrapolate what happened in the 40s and 50s to what is happening now is highly debatable.

    Jeff

  32. Jeff, you are welcome to post away, but I will not be responding further. That is quite possibly one of the most moronic statements yet posted on here. Do yourself a favor, step away from the computer, stop trying to ‘win’ something and go improve your knowledge.

  33. I don’t see what’s moronic about my position. Human nature may not have changed since the 50s, but the political landscape has, so my point is valid.

    Anyway, I’ve enjoyed our discussion, and I hope the feeling is mutual. 🙂

    Jeff

  34. Jeff, you have not read the books. So arguing against the content based on pub date is beyond moronic. Why would I enjoy a conversation with someone who appears delusional? I am out…put the last word up…I am sure it will be good.

  35. To use a trivial example, you cannot tell me that George W Bush wasn’t genuinely passionate about protecting the US from terrorism!

    LMAO!

  36. I’m also out! 🙂 It’s nearly midnight where I am, so I’m off to bed! Goodnight!

  37. This is why I trade the public is so worked up on bumper stickers and the media they don’t pay attention to what’s happening around them.

  38. wow, I see the sheeple are alive and unwell. Someone completely ignorant of the Bush’s speaking about George W’s passions for his country without knowing his family’s history and were all of the laws born out of supposed “counter terrorism” are taking this country. It is best not to argue with those who wont take of the glasses that shield their eyes from the light of day. If Ben Bernake knew the bubble was going to pop. He studied the great depression all his life. He has degrees out the kazoo. You do what you are told to do when it comes to big money in this country. Im not mad at the guy. If it was’t him it would have been some other so called public servant. If you have an email address shoot it my way and I will send you a short video that could possibly help remove the scales from your eyes Jeff.

  39. “…when they [politicans] could be earning far more in the private sector.” Jeff

    I’m not sure about that one.

  40. Rob, of course the average pol would not be paid that in private sector. 100% true.

  41. The pay for serving as a politician should be as follows: Per diem for 3 square meals a day, a residence in the city they are serving from (D.C. or a state capitol)rent and all utilities paid for, and a residence in their home state. Mortgage to be paid for by the taxpayers until their term of office is up.
    Finally, their pay per hour should be the federal minimum wage.

  42. Henry –

    Surely that approach would mean that only people with big bank balances could afford to go into politics, meaning politics would be less representative.

    For example, a blue collar trade union rep might not be able to feed his or her family on the minimum wage.

    Rob –

    Politicians sometimes have extremely successful careers before going into politics full-time. I bet a successful banker or lawyer earns far more than a Congressman.

    Morpheus –

    Don’t get me wrong, I’m no fan of George W Bush, nor his War on Terror. I was simply making the point that he was genuinely passionate about fighting terrorism (even if he trampled over everything the US stands for to do it).

    BTW, I don’t know how you view Bush Jr in the US, but here in the UK (and probably in the rest of the world), he’s viewed as a man of below average intelligence who constantly comes out with malapropisms (such as this one, which caused the Yen to fall: http://news.bbc.co.uk/1/hi/business/1825593.stm).

    I’d be interested in the video. I don’t want to put my email address in a public forum in case it gets picked up by spam bots. Is it on You Tube?

    Jeff

  43. Ultimately, politicians are irrelevant! People have to face their problems and encounter them. Politicians stand between people and their problems. Politicians are in the hope dispensing business. They go on giving everyone hope, a hope for a better tomorrow which never comes.

    The Fed is irrelevant! It doesn’t set rates, it follows the market.

    Always remember the fundamental law of change: when change comes, things will be different – not better, just different.

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