Monday, November 02, 2009
Why are these people in charge?
These people are supposed to be the experts. Yet they didn't see the crisis coming, denied that it was possible, and claimed that the economy was in great shape as the economy crumbled around them. They have no credibility. Why does anyone think they can fix the problem? They are the problem.
Alan Grayson asked Ben Bernake a question around the 3:45 mark of this video. Bernake's three-word response should have gotten him fired, indicted, or both.
Basically, Grayson wanted to know which foreign banks received $500 billion from the Federal Reserve. Bernake's response: "I don't know."
There are two possibilities. Either Bernake is lying, or he's admitted to inconceivable levels of incompetence perhaps unequaled in history. Neither are good. Either should cost him his job, at the very least.
I think he's lying. To Congress. Blatantly.
Does anyone really think that the Federal Reserve would dish out half a trillion dollars without the Fed Chairman's approval? Does anyone think that the Fed Chairman would approve distributing $500 billion without checking ID? As ridiculous as it was that mortgage lenders would approve mortgages without verifying income, Bernake claims he allowed the Fed to distribute half a trillion dollars without even knowing who was getting the money.
Responsible lending requires lenders to determine whether the party borrowing the funds will be able to pay them back. Also, lenders should determine if lending the money will be beneficial. It is impossible to do either of these things without knowing the borrower's identity. If Bernake approved this without knowing where the money was going, it would be recklessness beyond comprehension.
There's a much simpler explanation. He's lying.
He shouldn't be able to get away with it.