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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (534103)	12/3/2009 3:31:12 PM
From: Alighieri	1 Recommendation Read Replies (1) \| Respond to of 1576619

Senator (Jim Bunning) To Fed Chair Bernanke: 'You Are The Definition Of Moral Hazard' Huffington Post \| Shahien Nasiripour Posted: 12- 3-09 12:53 PM Federal Reserve Chairman Ben Bernanke was scolded Thursday by a group of senators who let the country's top economic official know how angry they are with what they perceive as his multiple failures both before and after the financial markets crashed. Lead among them was Jim Bunning, a Republican from Kentucky. The only senator to vote against Bernanke's confirmation four years ago, Bunning ripped into the Fed chair for handing out "cheap money to [his] masters on Wall Street"; referring to him as "the definition of moral hazard"; and stating flatly that it was either "incompetence or a desire to secretly funnel more money to a few select firms" that led Bernanke to not pressure then-New York Fed President Timothy Geithner a href="http://www.huffingtonpost.com/2009/11/16/aig-bailout-government-ov_n_359919.html">to demand concessions from AIG's counterparties during the government's massive bailout last fall. Bunning's prepared remarks are below. Statement of Senator Jim Bunning as Prepared for Delivery Banking, Housing, and Urban Affairs Committee Hearing on the Nomination of Ben Bernanke December 3, 2009 Four years ago when you came before the Senate for confirmation to be Chairman of the Federal Reserve, I was the only Senator to vote against you. In fact, I was the only Senator to even raise serious concerns about you. I opposed you because I knew you would continue the legacy of Alan Greenspan, and I was right. But I did not know how right I would be and could not begin to imagine how wrong you would be in the following four years. The Greenspan legacy on monetary policy was breaking from the Taylor Rule to provide easy money, and thus inflate bubbles. Not only did you continue that policy when you took control of the Fed, but you supported every Greenspan rate decision when you were on the Fed earlier this decade. Sometimes you even wanted to go further and provide even more easy money than Chairman Greenspan. As recently as a letter you sent me two weeks ago, you still refuse to admit Fed actions played any role in inflating the housing bubble despite overwhelming evidence and the consensus of economists to the contrary. And in your efforts to keep filling the punch bowl, you cranked up the printing press to buy mortgage securities, Treasury securities, commercial paper, and other assets from Wall Street. Those purchases, by the way, led to some nice profits for the Wall Street banks and dealers who sold them to you, and the G.S.E. purchases seem to be illegal since the Federal Reserve Act only allows the purchase of securities backed by the government. On consumer protection, the Greenspan policy was don't do it. You went along with his policy before you were Chairman, and continued it after you were promoted. The most glaring example is it took you two years to finally regulate subprime mortgages after Chairman Greenspan did nothing for 12 years. Even then, you only acted after pressure from Congress and after it was clear subprime mortgages were at the heart of the economic meltdown. On other consumer protection issues you only acted as the time approached for your re-nomination to be Fed Chairman. Alan Greenspan refused to look for bubbles or try to do anything other than create them. Likewise, it is clear from your statements over the last four years that you failed to spot the housing bubble despite many warnings.