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Bernanke: the FED has learned from the economic crisis.

29 November, 2009

This is rich. Ben Bernanke, in today’s Washington Post writes that

our challenge is to design a system of financial oversight that will embody the lessons of the past two years and provide a robust framework for preventing future crises and the economic damage they cause.   here

He admits that the FED didn’t really handle the financial crisis as it ought to have done and then adds  the scare tactic, warning that any attempt to interfere with the FED at all will cause irreparable harm in the future.

These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States.   [bold emphasis mine]

Finally there is this great promise from Bernanke (who is by the way soon to appear before the Senate Banking Committee which is considering his confirmation to another term at the FED).

Moreover, looking to the future, we strongly support measures — including the development of a special bankruptcy regime for financial firms whose disorderly failure would threaten the integrity of the financial system — to ensure that ad hoc interventions of the type we were forced to use last fall never happen again. Adopting such a resolution regime, together with tougher oversight of large, complex financial firms, would make clear that no institution is “too big to fail” — while ensuring that the costs of failure are borne by owners, managers, creditors and the financial services industry, not by taxpayers. [Bold emphasis mine]

He’s right, of course, the response to the behaviour of Bernanke, Paulson and Geithner during the “too big to fail” crisis has finally garnered public support for Ron Paul’s long campaign to remove the veil of secrecy from the FED. As we have recently learned, the hidden-from-view dealings with the BIG BANKS were not in the taxpayer’s interests. If the FED hasn’t learned, since its inception, how to handle economic crisis and oversee the banks why should we assume they will do any better now?

Read the rest of his plea for forgiveness in the Washington Post and then hope that the Senate Committee ignores it.

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2 Comments leave one →
  1. 29 November, 2009 21:15

    Since excessive money caused the crisis and we continue to print money with abandon, it’s quite clear that the Fed has learned absolutely nothing from the crisis.

  2. 30 November, 2009 21:15

    Now me be all wound up…the Fed trying to reform any of its absurdities in any manner is absurd and will amount to nothing more than, at best, making chicken salad out of chicken shit. No headway whatsoever will be made towards Progress as long as we as a global society rely upon GDP, which is based on consumption and extraction that cannot be continued indefinitely, as a measurement of growth. [edited]

    I mean, imagine the heads that would have to roll for something, anything along these lines to occur!:
    http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm

    [edited out of the spam filter]

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