BIG BEN GETS TAKEN TO THE WOODSHED

At least we’ve got one U.S. Senator with balls. U.S. Senator Jim Bunning from Kentucky – a Hall of Fame pitcher in the 50’s – tells it like it t-i-is.

He refuses to mouth the trite, feel good, pabulum-of-the-day put out by others in a futile attempt to quell the growing unease of ordinary people with economic common sense. If we had more like Jim, we might have a fighting chance to turn this thing around.

Here are some of the highlights said recently by the Senator to Fed Chairman Ben Bernanke during a Senate Banking Committee hearing on July 15, 2008:

“Thank you, Mr. Chairman. I know we have a lot of ground to cover today, but I want to say a few things on the topic of this hearing and of the next.

“First, on monetary policy, I am deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan’s easy money the late nineties and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernanke’s easy money in the last year has undermined the dollar and sent oil to new record highs every few days, and almost doubling since the rate cuts started. Inflation is here and it is hurting average Americans.

“Second, the Fed is asking for more power. But the Fed has proven they cannot be trusted with the power they have. They get it wrong, do not use it, or stretch it further than it was ever supposed to go.

“As I said a moment ago, their monetary policy is a leading cause of the mess we are in. As regulators, it took them until yesterday to use power we gave them in 1994 to regulate all mortgage lenders. And they stretched their authority to buy 29 billion dollars of Bear Stearns assets so J.P. Morgan could buy Bear at a steep discount.

“Now the Fed wants to be the systemic risk regulator. But the Fed is the systemic risk.

“Giving the Fed more power is like giving the neighborhood kid who broke your window playing baseball in the street a bigger bat and thinking that will fix the problem.

“I am not going to go along with that and will use all my powers as a senator to stop any new powers going to the Fed. Instead, we should give them less to do, so they can do it right, either by taking away their monetary policy responsibility or by requiring them to focus only on inflation.

Third and finally, since I expect we will try to get right to questions in the next hearing, let me say a few words about the G.S.E. bailout plan. When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out socialism is alive and well in America. The Treasury Secretary is asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Fed’s purchase of Bear Stearns’ assets was amateur socialism compared to this.” – Sen Jim Bunning

Bunning got it right, and he’s one of the few who have the courage and testicularity to say so.

The only way to avoid economic meltdown in the U.S. is to look at the problem and not just go on hoping that it will disappear if we put our heads in the sand and pretend it doesn’t exist.

The ship of State in the United States is sinking . . . and that fact doesn’t change just because it’s got a new coat of paint.

Sometimes it pains me . . .

daniel w. jacobs
© 2008 – 2020, all rights reserved

Disclaimer: This article is intended to stimulate critical thought and awareness of the issues involved. The author makes no guarantee of the accuracy of the writings beyond a common sense observation of the obvious.

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