Are you frustrated by high gas prices, high food prices, the exorbitant cost of overseas travel and the massive debt-load placed on your shoulders by the government’s unceasing bailouts? If you are, then you, like me, should be mad as hell at the re-appointment of Ben Bernanke as chairman of the Federal Reserve.
Until recently, Bernanke was merely an author and professor, but he appeared out of virtually nowhere as President George W. Bush’s nominee to replace Alan Greenspan.
As was typical of Bush, he nominated an incompetent man who was thrust into a job far exceeding his capabilities, and following in the footsteps of other failed Bush appointees such as John Ashcroft, Harriet Myers and Donald Rumsfeld, Bernanke’s job performance has been abysmal.
There were danger signs before Bernanke was appointed. In 2002, Bernanke made a speech suggesting that “helicopter drops” of money could help fight economic hard times.
His suggestion was that the government could print money and then distribute it to Americans to stimulate consumption. This is all well and good, except that the money was created out of thin air, driving down the value of already existing dollars.
Like a professor giving out oodles of extra credit to underperforming students, thus screwing those who worked hard to get their grades, inflation screws those who save and spend responsibly, instead showering benefits on the irresponsible.
After assuming office in 2006, Bernanke immediately began following his ideology, pursuing corrosive inflation at all costs.
The results, as expected, were both immediate and dire. Most clearly, the price of oil went through the roof.
As global oil producers feared that the dollar was losing legitimacy, in the wake of Bernanke’s hot printing press, they demanded more and more of our depreciating dollars for their crude oil. The result was swift and severe as $4-a-gallon gas quickly set in, though prices have fallen a bit under the crippling economic recession.
More directly, inflation took its toll on the U.S. dollar, which has fallen sharply. The U.S. dollar index — an index of our dollar’s strength versus foreign competitors such as the euro, Japanese yen and British pound — has fallen from 90 to 76, a roughly 15-percent drop, since Bernanke took office.
If you plan on traveling overseas, your trip has just gotten 15-percent more expensive, in large part due to Bernanke. Similarly, should you buy a Japanese car, French wine or Chinese junk, plan on paying 15-percent more.
Bernanke’s utter incompetence stretches beyond his unpatriotic attacks on our currency. Bernanke was a key player in the bailouts of AIG, Bear Stearns and others. It becomes increasingly clear by the day that the bailouts were unnecessary, ill advised and even harmful in that they spread unnecessary panic throughout the economy.
Created in the wake of the Panic of 1907, the Federal Reserve was supposed to regulate the banking system. Instead of regulating the banks, the Feds turned a blind eye to the mounting troubles of the banking system.
Up until the final moments before the collapse of AIG, Fannie Mae, Bear Stearns, Lehman and others, Bernanke and the rest of the Fed continued to assure us that everything was fine while they ignored numerous warning signs.
That’s right, Bernanke sat back and watched as the U.S. banking system imploded, the dollar plunged and necessary commodities such as food and gasoline became unaffordable for many.
The idea that Bernanke should get to keep his job is ludicrous. Bernanke, along with President Bush, Congress and a few dastardly banking executives, are the primary causes of the economic malaise we now face. Obama’s decision to reappoint Bernanke makes about as much sense as appointing a convicted arsonist as fire chief.
Obama’s decision is a baffling misstep that will haunt him all his remaining days. Given his promise of change, it is utterly disheartening to see Obama reappoint one of Bush’s worst men to commence four more years of inept (at best) leadership of the all-important Federal Reserve.
Let’s only hope that Obama and Bernanke change their economic policy for the better — starting with Obama’s economic address today, or else, soon, your dollars may be worth but mere change.
Editorials Editor Ian Bezek is a senior economics major. His column appears Mondays in the Collegian. Letters and feedback can be sent to firstname.lastname@example.org.