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PORTSIDE  June 2011, Week 2

PORTSIDE June 2011, Week 2

Subject:

The Bernanke Scandal: Full-Frontal Cluelessness

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Wed, 8 Jun 2011 23:06:53 -0400

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The Bernanke Scandal: Full-Frontal Cluelessness

by Robert Scheer
http://www.commondreams.org/view/2011/06/08-3

How I wish that Ben Bernanke would get caught emailing
photos of his underwear-clad groin. Otherwise we don't
stand a chance of reversing this administration's economic
policy, which is shaping up to be every bit as disastrous
as that of its predecessor. 

Indeed, the Fed chairman's much anticipated remarks on
Tuesday take one back to the contemptuous indifference of
a Herbert Hoover to the public's suffering: Bernanke
dismissed the wobbly economy with its anemic 1.8 percent
first-quarter growth as merely "somewhat slower than
expected." The rise in unemployment to 9.1 percent was
"some loss of momentum."

The problem with Bernanke is that he is utterly clueless
as to the stark pain and fear endured by the 50 million
Americans who have experienced, or face the prospect of,
losing their homes. His remarks reflected the insularity
of a ruling-power elite that is magnificently impervious
to the damage that Bernanke's policies in the current and
past administration helped inflict on what used to be
called the American way of life. This is a man who assured
us there was no housing crisis, while his policies at the
Fed encouraged the mortgage securitization swindles that
caused the meltdown of the economy.

His full statement stands as a classic example of the
limits of economic language as morally descriptive:
"Overall, the economic recovery appears to be continuing
at a moderate pace, albeit at a rate that is both uneven
across sectors and frustratingly slow from the perspective
of millions of unemployed and underemployed workers."
Frustratingly slow--how about going bat nuts with fear
over not being able to make your mortgage payment and
losing your home? Tell it to workers who must contend with
stagnant wage rates and sharply rising gas and food costs
as better jobs and therefore consumer demand move
offshore. Bernanke takes low wages to be reassuring news
on what he sees as the all-important inflation front:
"subdued unit labor costs should remain a restraining
influence on inflation."

At home we are experiencing a social tsunami with the
disappearance of a middle-class workforce of stakeholders
who were assumed by observers as varied as Thomas
Jefferson and Alexis de Tocqueville to be the very bedrock
of America's experiment in freedom. Many with jobs are
struggling desperately to get by as the average workweek
and pay scales fall, and countless workers find themselves
settling for rewards well below their skill sets. Even
those slim pickings are denied to the unemployed. Bernanke
concedes: "Particularly concerning is the very high level
of long-term unemployment--nearly half of the unemployed
have been jobless for more than six months."

The jobs that have been created by our large multinational
corporations, like the bailed-out GE, are primarily
outside of the country, as Bernanke admitted: "Many U.S.
firms, notably in manufacturing but also in services, have
benefited from the strong growth of demand in foreign
markets." Those foreign gains, fueled by far more
successful anti-recession policies in China, Brazil and
Germany, have driven up demand and prices abroad in the
areas of petroleum, food and key construction commodities. 

Bernanke, speaking at a monetary conference in Atlanta,
conceded that "the depressed state of housing in the
United States is a big reason that the current recovery is
less vigorous than we would like," and that the "U.S.
economy is recovering from both the worst financial crisis
and the most severe housing bust since the Great
Depression." 

But he offered not a word as to how the severe effects of
that housing bust might be mitigated. Not a word about
assisting people to stay in their homes. Yet he claimed
that the relief that the Fed provided to the bankers by
buying up more than $1.2 trillion of the toxic mortgages
those bankers had created "has been accomplished, I should
note, at no net cost to the federal budget or to the U.S.
taxpayer." 

This is the Big Lie technique at work, employed by a huge
banking lobby that stresses the direct cost of the TARP
program while ignoring other programs that will not be
paid back, as well as the additional cost of $5 trillion
to the national debt that a proper Fed policy could have
avoided.

The record is by now indelibly clear that the economic
approaches pursued by George W. Bush and Barack Obama,
with Bernanke playing a key role in both administrations,
can be most accurately summarized as a policy of
government of the bankers, by the bankers, and for the
bankers. 

Assurances of stability to the financial markets, meaning
the ability for companies to borrow government funds at a
near-zero interest rate without giving anything back to
the public in the form of mortgage relief or job creation,
have been the overwhelming goal. But even by that
standard, as the latest statistics on job creation and
construction starts attest, the government's effort is not
working. Putting the bankers first has represented pushing
on a string, what Paul Volcker condemns as a "liquidity
trap," a situation in which taxpayer money has been made
available to major corporations that invest in job
creation that benefits foreigners instead of U.S. workers.
Now that's an obscenity we should be concerned about.

___________________________________________

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on the left that will help them to interpret the world
and to change it.

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