Senator Bunning to Bernanke "You are the definition of a moral hazard. Your Fed has become the Creature From Jekyll Island"
Inquiring minds are listening to Senator Jim Bunning grill Ben Bernanke over the Fed's miserable performance under Bernanke.
Here is a partial transcript but I recommend playing the 13 minute video in entirety.
Alan Greenspan refused to look for bubbles or 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.It is hard to add to that. Senator Bunning states the facts as they are.
Under your watch every one of the major banks failed or would have failed had you not bailed them out.
After taking over the Fed you did not seen any need for more substantial regulation of derivatives until it was clear that they were headed into the financial meltdown thanks in part to those products.
The Greenspan policy on transparency was to talk a lot, use plenty of numbers, but say nothing. You promised congress more transparency when you came to the job. You promised more transparency when you came begging for TARP. To be fair you have published more information than before but those efforts are inadequate and you still refuse to provide details on the Fed's bailout last year on all the toxic waste you have bought.
Chairman Greenspan sold the Fed's independence to Wall Street on the so called "Greenspan PUT". Whenever Wall Street needed a boost, Alan was there. But you went even farther than that when you bowed to the political pressure of the Bush and Obama Administrations, and turned the Fed into an arm of the Treasury.
Under your watch the "Bernanke PUT" became a bailout for all large financial institutions, including many foreign banks.
And you put the printing presses into overdrive to fund the government's spending and hand out cheap money to your masters on Wall Street.
In short, you are the definition of a moral hazard.
You are repeating the same mistakes as Japan in the 1990's on a much larger scale while sowing the seeds for the next bubble.
The AIG bailout alone is reason enough to send you back to Princeton.
I will do everything I can to stop your nomination and drag out this process as long as I can. We must put an end to your and the Fed's failure and there is no better time than now.
Your Fed has become the creature from Jekyll Island.
Mike "Mish" Shedlock
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