Being Bernanke

Whatever you think about Ben Bernanke, chairman of the U.S. Federal Reserve, you have to be a little sympathetic. Put yourself in his shoes and try to answer this barrage of disconnected questions and comments from Rep. Ron Paul, R-Texas in the video (above).

I'll just state this list as questions but Rep. Paul actually asks very few questions: (1) Is the Fed monetizing the debt? (2) Are Fed actions hurting mortgage holders? (3) Is the Fed funding the IMF? (4) Are bank examiners new or already on the payroll? (5) Are more bank examinations required or is the problem really the Fed easy money, low interest rate policy? (6) Do low interest rates rig the markets and give bad information to investors? (7) Can capital come from a printing press rather than savings? (8) Does an easy money policy reject every notion of free-market capitalism? (9) Why is the IMF asking for more money to bail out Greece? (10) Who pays money to the IMF? Where does the money come from? Will this all come out of the printing press once again? Are we expected to bail out the world? (11) Is the US bankrupt? (12) What are we going to do when a state "gets under the gun" and needs to be bailed out? Are our States approaching the situation Greece is in? (13) Can Congress find out what the Fed is doing? (14) Can the Fed do anything it wants and create as much money as it wants?

Chairman Bernanke gets to answer about three of these questions.

With Ron Paul now saying that Bernanke is "cocky" (here) and with Ron Paul now chairing the House Subcommittee on Domestic Monetary Policy (an obscure committee Paul wants to turn into the Fed watch dog), Ron Paul is Ben Bernanke's worst nightmare.

It's really too early to say whether the Fed performed better during the current financial crisis (the Great Recession) when compared to Fed performance during the Great Depression. What can be said about Ben Bernanke is that he studied the Great Depression and was convinced that the Fed made mistakes during the Great Depression (here) and was intent on not repeating those mistakes during the Great Recession. Whether you agree or not with his analysis and conclusions, he does have a reasonable basis for the way he has conducted himself in public life.