Given that Bernanke has proclaimed independence from Congress an absolute necessity, one might think that he would try and limit his contract with politicians except at designated public hearings. One would think wrong.
Bloomberg reports Bernanke Met With 24 Senators After Renomination as Fed Chief.
Federal Reserve Chairman Ben S. Bernanke had conversations with 18 of the 23 legislators on the Senate Banking Committee prior to their 16-7 vote this month to recommend that the full Senate confirm him to a second term.
“In all my years of doing this, and I have been doing this since 1996, I have never seen a Fed chairman put a full court press on Congress, especially on the Senate Banking Committee,” said Ken Thomas, a lecturer in finance at the University of Pennsylvania’s Wharton School who routinely reviews the daybooks of Fed chairmen.
“This is unprecedented political contact for a Fed chairman in such a short period,” Thomas said, “especially considering Bernanke’s vow before his first Senate confirmation hearing that ‘I will be strictly independent of all political influences.’”
Bernanke’s Broken Promise
The list of politicians and bank CEOs Bernanke met with in the article is stunning. The key point however, is Bernanke broken vow ‘I will be strictly independent of all political influences.’
That makes Bernanke a liar as well as a hypocrite.
Is Bernanke Buying Votes?
Inquiring minds are reading a more recent article from Monday’s Wall Street Journal: Does Harry Reid Want Something From the Fed For His Vote?
Senate Majority Leader Harry Reid’s tepid endorsement of Fed chairman Ben Bernanke on Friday left some investors queasy. Mr. Reid said his support for Mr. Bernanke was conditional. “To merit confirmation, Chairman Bernanke must redouble his efforts to ensure families can access the credit they need to buy or keep their home, send their children to college or start a small business.” He added that he expected an announcement from the Fed chairman on this issue soon.
Vincent Reinhart, an economist at the American Enterprise Institute and former Fed staffer, called the statement a “death trap” for the Fed because it suggests that the senator wanted something in return for his vote. Any acknowledgment or action by the Fed could be seen as a breach of its independence.
A spokeswoman for the Fed declined to comment.
The Fed’s Independence
My friend “BC” had a few choice comments this morning about the Fed’s independence.
The Fed’s “independence” means the banksters’ freedom to take in $1 in deposits, set aside 3 cents in reserves, lend $1 at effective 33:1 leverage at a growth rate of 7-10%/yr. at a doubling time of 7-10 years, go broke once a decade, and have the US Treasury make them whole so they can do it all over again.
In the meantime, the banksters use the sovereign debt of the US as the reserve basis for their rentier plunder, capturing via compounding interest and speculative financial capital gains an increasing share of future, after-tax, real labor product until the economy’s labor product is insufficient to service the massive debt, let alone sustain production and the pool of savings (productive capital stock).
As Henry George (and others before him and after) argued, there is no capital wealth without labor. Impoverish labor product via increasing burden of compounding interest and taxes, and you impoverish the society’s ability to create wealth by way of savings, investment, and production.
What neo-liberal economists and Keynesians have called “growth” has been borrowing cheap energy and labor product from abroad for 30-35 years while increasing the debt burden on businesses, households, and government at falling nominal interest rates.
The job of Bernanke, Geithner, and Obama is to keep the rentier-financiers’ imperial plunder regime in power.
Ironically, whether or not Bernanke actually made those promises to Reid is irrelevant. Bernanke should never have put himself in the position to be accused. However, the key point is Bernanke will only honor promises if they are in the best interests of the big banks.
Other than protecting the Big banks interests, the only other thing Bernanke cares about is retaining his position as Fed chairman. If that takes political pandering, lies, and hypocrisy, Bernanke has more than proven to be capable of the task.
Mike “Mish” Shedlock
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