Where Bernanke went wrong.

[JDPriestly]

Some time ago, I heard a program about Bernanke in which it was explained that he is an expert on the Great Depression and that he feels quite pleased that in the 2007-2008 recession, the financial sector, the "too big to fail" banks were sustained.

I understand what he was talking about. I am quite familiar with the great inflation in Germany and Austria in the 1920s and the crash of the foremost Austrian Bank that set off an international financial crisis. My mother who lived through the Great Depression is still alive and intellectually quite strong, and she reminds me of the events in her life and her families' life during that period. I have also read quite a few books about the Great Depression and the stock market crash of 1929.

So I was intrigued by Bernanke's apparent pride in having saved our banking system.

I think he made a great error in focusing so much on the banking system. In fact, our problem in 2007 which his policies have permitted to continue and perhaps worsen today is that the banking and risky trading (as opposed to actual investment in manufacturing and production) in our financial sector is far out of balance with our internal United States manufacturing and production capacity.

It is that imbalance in the US economy (sustaining the flourishing Asian economy should not be the concern of the US Federal Reserve) that needed to be repaired. At this point we have a US banking system that is flush with cash and nowhere to invest it. For Americans, that is the worst situation possible. And it is due to Bernanke's miscalculation about the role of banking in our society. We need a Fed that answers to the American people and not to the international banking community.

[aquart]

1. I wouldn't be too confident about that "flourishing Asian economy."

Other than that, I agree.

[endless october]

2. he went wrong when he started printing money out of thin air to increase liquidity.

and he has continued to do so. i suppose he wants us to inflate ourselves out of debt. piss poor plan.