Admiring Judge Richard Sullivan (UPDATED)
Libertarian Morality

Fed Chairman Ben Bernanke's Lies About AIG, Lehman Brothers, and Goldman Sachs

There are a lot of questions we all should have about the bailouts: Why was Lehman Brothers, Goldman Sachs' main competitor, not bailed out?  Why did the Fed give AIG $85 billion, of which $13 billion went to  Goldman Sachs?  Chairman Bernanke, in a speech given today, claimed

The case of the investment bank Lehman Brothers proved exceptionally difficult, however.... [T]he company's available collateral fell well short of the amount needed to secure a Federal Reserve loan of sufficient size to meet its funding needs. As the Federal Reserve cannot make an unsecured loan, and as the government as a whole lacked appropriate resolution authority or the ability to inject capital, the firm's failure was, unfortunately, unavoidable....

Sounds plausible, right?  Most lies, when read in isolation, are plausible.  A lie must be read within the context of the rest of the story.  Bernanke continued:

In contrast, in the case of the insurance company American International Group (AIG), the Federal Reserve judged that the company's financial and business assets were adequate to secure an $85 billion line of credit, enough to avert its imminent failure.

Do any of Bernanke's supporters care to defend the Fed's assessment that AIG had the credit worthiness for a $85 billion loan?  AIG is actually going through reorganization, precisely because AIG did not have the assets to pay back an $85 billion loan.  Either Bernanke is lying, or he lacks the ability to forsee whether a company will be able to pay back billions in taxpayer money.  Either way, the taxpayers lose.

Ben Bernanke wants to keep his power.  He wants to remain Chairman of the Federal Reserve.  He must be ousted.  

Please note, too, how economists view Bernanke: Tyler Cowen and other establishment economists think Bernanke should keep his position as Chairman. (Yes, they really do "think" that.)  There is a reason most of us consider macroeconomics to be nothing more than voo-doo.  No thinking person could trust Bernanke.  Macroeconomics, like other superstitions, requires you to stop thinking.  

Bernanke made everyone afraid of invisible forces that would destroy the economy.  He then gave trillions (in payouts and guarantees) to those same people who caused the economic crisis.  He, contrary to federal law, favored insiders like Goldman Sachs.  

Goldman Sachs is reporting record profits because Bernanke gave billions to Goldman Sachs.  More than the free money, Bernanke killed Goldman's chief competitor.  

It's clear that Bernanke is a wicke man who does not deserve his crown.

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