January 2012

Ben Bernanke: Most Powerful Man in America?

by Matthew Melchiorre on December 1, 2011

in Economy, International

Don’t let his short stature and friendly grandpa beard fool you. Federal Reserve Chairman Ben Bernanke has the power to control the money in your wallet and raise your taxes on all but a whim. And since the financial crisis, he’s been exercising these powers with extreme prejudice.

Bernanke makes it rain every day at the Fed.

Yesterday, the chairman slashed the Fed interest rate on dollar swaps by 50 basis points so that the European Central Bank could throw one last life preserver at the drowning Euro. But flooding the Eurozone with Dollars won’t change the fact that profligate southern European governments have been racking up unsustainable levels of debt for years by enjoying artificially low interest rates gained from the common currency.

Europe does not have a liquidity problem. It has a solvency problem. Bad debt must be liquidated before recovery can begin, but Bernanke’s latest move does the opposite. By adding to Eurozone indebtedness, he thereby disincentivizes the painful but necessary reform to rein in entitlements and deregulate markets.

Helicopter Ben’s Euro stimulus is only the latest in a long history of playing the man behind the economy’s curtain. America found out this week that the Fed made a whopping $7.77 trillion in secret loans to financial institutions like Bank of America and CitiGroup as of March 2009. That’s more than half of US GDP in that year and qualifies as the biggest bailout in U.S. history.

The fact that many of the loan recipients were simultaneously reaping the benefits from the Treasury’s Troubled Asset Relief Program (TARP) belies Bernanke’s claim that only “sound institutions” received Fed loans. The entire rancor in public and in Congress over $700 billion in TARP bailout funding now seems trivial compared to Bernanke’s hush-hush behemoth boondoggle.

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Today’s Links: December 1, 2011

by Nicole Ciandella on December 1, 2011

in Odds & Ends

OPINION

WILL OREMUS: “The Rise of the Geek Lobby”
“[S]omething happened on the way to [SOPA]‘s easy passage and the flourish of the president’s signature: The Internet fought back. The groundswell started with open-Internet stalwarts like the Electronic Frontier Foundation and the Center for Democracy & Technology. As they have before, the non-profits picked apart the bill’s perceived oversights and omissions. This time, though, their message—that the law would fundamentally damage the Internet’s culture of openness—resonated loudly outside the world of tech wonkdom.”

LINDA GREENHOUSE: “Sin of the Parents”
“In the current race to the bottom to see which state can provide the most degraded and dehumanizing environment for undocumented immigrants, Arizona and Alabama have grabbed the headlines. But largely unnoticed, it is Florida, home to nearly one million Cuban refugees and their descendants, that has come up with perhaps the most bizarre and pointless anti-immigrant policy of all.”

HOWARD LOVY: “Regulate Nanotech First, Learn What It Is Later?”
“The FDA, in cautionary mode, has come up with a meaningless nanotech threshold of 1,000 nanometers. The genius who decided on that number in a draft guidance on nanomaterial regulation has the biotech industry scratching its collective head over this new math. As I wrote in my first nanotech column for PJMedia, nano is not any one technology at all. It is an enabling technology, the next step in the evolution of many different disciplines. The problem is that there is no definite dividing line between the ‘old’ way of doing things and the nanoscale world.”

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