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Ben Bernanke Has Betrayed Us All

Posted By Tom Blumer On January 18, 2013 @ 12:45 am In Daily Mailer,FrontPage | 31 Comments

As if we needed any further reminder of how thoroughly corrupt and one-sided Washington has become, the man who is ostensibly in charge of what is supposed to be the most important politically neutral institution in the nation has once again weighed in on the side of the most financially irresponsible administration in U.S. history.

In case you missed it in the midst of the media-imposed obsession over “gun violence,” aka the orchestrated attempt to do as much damage to citizens’ constitutional right to keep and bear arms as possible, Federal Reserve Chairman Ben Bernanke appeared on Monday at the University of Michigan’s Gerald R. Ford School of Public Policy. In a question-and-answer format, first with school dean Susan Collins and then followed by submitted student questions, Bernanke, in what Ylan Q. Mui at the Washington Post called “a free-wheeling conversation,” engaged in historical revisionism, berated the U.S. Congress, and parroted the aggressively partisan line President Barack Obama and officials in his administration have taken as the federal government once again bumps up against its duly legislated credit limit:

… [I]t was the very slow solution to the debt ceiling in August 2011 that got the US downgraded last time. … [I]t’s very, very important that Congress take necessary action to raise the debt ceiling to avoid a situation where our government doesn’t pay its bills.

Bernanke tried to pretend that the downgrade of long-term U.S. debt from AAA to AA+ by ratings agency Standard and Poor’s occurred because the House of Representatives under Speaker John Boehner didn’t immediately bend over and acquiesce to an unconditional increase in the debt ceiling almost 17 months ago.

That was at best a secondary reason for S&P’s downgrade. The primary driver was the firm’s clearly expressed opinion “that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” In other words, after all of the histrionics, Congress and the administration failed to do what they needed to do to get the government’s house in order.

S&P was indeed also troubled “that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened.” But who did the weakening? Certainly not Boehner’s House; the Speaker and his party took control of Congress’s lower chamber in the 2010 elections when the nation decided it had seen enough of the frightening damage inflicted by two years of one-party rule under Obama, House Speaker Nancy Pelosi, and Senate Majority Leader Harry Reid. Voters hoped that Boehner’s House would be able to rein in the insanity. That hasn’t happened yet, but the “weakened” situation S&P cited predates Boehner’s ascension to Speaker.

That weakening occurred in two stages. The first took place when Pelosi, Reid and Obama decided to ramp up spending from an already far too high $2.98 trillion in fiscal 2008 to a dangerous $3.57 trillion in fiscal 2010 (the “official” 2010 spending figure is lower because Tim Geithner’s Treasury Department engaged in TARP-related accounting manipulation which made fiscal 2009 look worse than fiscal 2010, when that wasn’t really the case), primarily by passing a “stimulus” program which stimulated nothing but massive levels of waste, fraud and abuse. Then, despite promising that the stimulus would be a temporary two-year operation, and that spending levels would come down after that, Obama and Reid made it clear to Boehner and the rest of the country that their previous pledges meant nothing, and that they would accept no meaningful controls on spending growth. Thus, the “weakened American policymaking” S&P cited is directly and completely traceable to Pelosi’s sessions of Congress, the White House, and Congress’s upper chamber.

As he cited the need to have the current debt ceiling of $16.394 trillion raised, Bernanke gave away his contempt for our Founding Fathers and the brilliant separation of powers mechanisms they set up in our Constitution. While he didn’t directly answer a questioner who wanted to know his take on whether the ceiling “could … be eliminated without much consequence,” his answer, which the Washington Post’s Mui interpreted as a call for getting rid of it, was deeply disturbing:

[I]t’s got symbolic value, I guess … [E]ssentially, no other countries in the world have this particular institution.

Gosh, Ben. What if everyone in the country decided that the credit limits on their credit cards, home-equity lines, and other forms of credit were just “symbolic”? The answer is that in almost all cases attempts to borrow above those limits would be stopped by strict control mechanisms installed at checkout lines and other points of purchase and credit access. By contrast, Ben Bernanke would apparently prefer that the government have no limit on how much it can borrow. We can already see the accumulating wreckage in Europe which has occurred because there has been no meaningful restraint on EU governments’ borrowing ability. It’s not pretty, and it promises to get very ugly.

Speaking of ugliness, Bernanke’s mimicking of the Obama administration’s meme that Boehner’s House needs to “pay its bills” is among the more risible assertions I’ve heard out of this bunch — and that’s saying something.

Boehner’s House has passed budgets. Reid’s Senate has refused to even consider them or to pass any other kind of budget resolution, effectively placing the government on spending autopilot for nearly four years. If he were a responsible fiscal steward, Obama would insist on receiving an agreed-upon roadmap for running the government. Instead, he has been all too happy to run up the government’s debt tab while disingenuously disclaiming any responsibility for it.

The sad reality is that Ben the Betrayer Bernanke’s Federal Reserve has long since been co-opted by the Obama regime. The Fed’s multiple programs of “quantitative easing” have financed an out of control government with trillions of dollars of money created out of thin air. If QE stopped today, the government’s finances and the nation’s economy would more than likely collapse in short order. Bernanke’s four years of cooperation with his profligate masters now have us at the brink of the point of no return.

That’s not John Boehner’s fault, Ben — and you know it.

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