My thoughts on a Bernanke second term as Chairman of the Federal Reserver can be summed up as, meh.
I have come to believe, like many on the fringes of both the far right and the far left, that the Federal Reserve is at best a useless and at worst an all powerful and controlling institution. The Reserve has overseen the largest expansions and the greatest depressions in our nation’s history and in his term Bernanke has personally taken every opportunity to grow the institution’s power and hold over our nation’s economy.
I fear Bernanke not so much as some controlling megalomaniac but as a clouded intellectual. He seems lost in theory and complexity. He is someone who is driven by an obsession with the Great Depression and the monetary policy surrounding it. This scares me because like a first year medical student who finds personal ailments linked to horrible diseases they read about in medical books, I fear Bernanke is seeing signs of economic collapse in every bit of data and every news headline. Signs that may not actually have ever been there.
No one can doubt that the housing collapse was ready to level our economy like a glacier pulverizing Earth. The way in which our leaders reacted, to declare doomsday was upon us and so the printing presses had to be left on all night while a central authority micromanaged corporations and government, well, we will see how that turns out in the long run. My expectation is that it won’t turn out well.
The real question we are left with is, if not Bernanke, who can we turn to? In all honesty, I don’t know that we can do better. I distrust economists by nature. I studied the basics, have seen formulas and have tried to understand how they come to conclusions. Those you see on television jumping up and down with exuberant madness are not the ones any individual let alone our nation should turn to. They are pitchmen and women who talk up the economy and then sell books.
Academics too seem incapable of the task at hand. The very nature of our system is political and driven by desires that are not realistic. Each election season candidates promise jobs, programs, entitlements and deficit spending cuts. Somehow each season we come out with the dueling messages of spend more; spend less. We always end up just spending more.
Academia is driven by notions of the ideal. They come up with conclusions that would occur in ideal situations, form strategies that work if you can simply change one or two of the most fundamental laws of Heaven and Earth. That kind of thinking leads to revolutions against that kind of action, not real solutions that accept there are limitations that cannot change and must be accounted for.
Russia, Cuba, China and every other nation that has attempted a centrally planned economy have failed. Add to that the problems that these nations never had, endless demands for programs, endless expectations of wealth creation by the population, no ability to forcefully remove opposition with bloody violence and secret police. Our endeavor toward central planning is wrought with problems and Bernanke seems a key advocate of continuing on this path.
So in short, reappointing Bernanke is a terrible decision but it is also the best decision for the moment. It is the best of our least options. Bernanke will continue to push for printing money, continue to push for more power and control, will continue the cycle of creating more minor booms and busts, booms and busts, booms and busts. In reality that is what the Federal Reserve system has given us. Minor cycles of growth followed by minor cycles of downturn. In short, the exact same thing that would happen without it existing at all.
Yet I cannot even begin to imagine who would be waiting in the wings of an Obama administration. Seeing his many Czars and their resumes I know we can do a great deal worse. So Bernanke it is and the continuation of our embrace of socialist and totalitarian central control. It could be better, but I don’t know who has the capability to make it so. It could be worse and maybe we should just keep reminding ourselves of that.
