Bernanke’s award as Time’s Man of the Year

Time Magazine honors Federal Reserve Chairman Ben Bernanke as their "Person of the Year." Is the honor deserved? No, says the Washington Posts Binyam Applebaum and David Cho. Treasury official and current FDIC Chair Sheila Bair noticed serious problems as early as 2001 and tried to get subprime lenders to adopt a code of best practices, Freddie Mac stopped purchasing certain securities in 2002, the Greenlining Institute warned in 2004 that lenders were being unscrupulous and Federal Reserve Board Governor Edward Gramlich warned in 2005 that lending practices were unsatisfactory.

Did Bernanke do anything in response to these warnings? No. Bernanke sat around, twiddling his thumbs and complaining that people had been warning of disaster since 1979. Bernanke does not deserve a second term and should not be re-appointed to one.

Keep in mind that, because of Bernanke's dereliction of duty in allowing the housing bubble to continue as long as it did, the US lost $6 trillion in housing wealth, which has cost the US $500 billion in annual income.

Bernanke failed to see the bubble in the first place. He felt that the Fed should not concern itself with asset bubbles, or call the attention of financial markets or the public to these bubbles by using its regulatory power to rein in lending, or explicitly using interest rates to target a bubble.

Also,

The Fed has directly lent more than $2 trillion to financial and non-financial institutions in the last two years. It has guaranteed trillions more.

The US needs to audit the Fed and to restrict it from its far-too-independent role.

Leaving the base behind

President Obama is just going way too far afield, making way too many concessions to right-wingers in the Democratic Party Caucus.

And speaking of going too far afield and leaving folks behind, Rush Limbaugh is convinced that America was  prosperous under Reagan and both the elder Bush and the younger Bush! Actually, income inequality took a serious jump upwards in the mid-1980s and got even worse under the younger Bush and when one asks the "Reagan Question," i.e., "Are you better off now than you were [before this last guy took office]?" The answer for the younger Bush is a resounding NO!

The urgent priorities

With the recession coming to an end, Democrats need to get their priorities in order. As I've stated over and over already, deficit reduction has to take last place. The deficit hawks need to siddown and shuddup. The nation desperately needs a large-scale jobs program and it needs one now!!! Will such a program make a serious difference in the unemployment rate by next November? Probably not, but if the public doesn't get the impression that the Democrats are putting a 110% effort into job creation, that could leave a political opening for the teabagging right wingers to make gains at the expense of Democrats. That would truly be a tragedy!

As to the idea that Obama could take money from TARP (Unspent money plus money paid back equals a large bucket of available cash) for job creation. Would it help? Eh, six of one, half-dozen of the other.  Go ahead and do it if it's politically easier, but money is money.

Recession appears to be coming to an end

Thankfully, the employment graph for the "Great Recession" appears to be at last curving upward!!! Do we owe the Republican Party any thanks whatsoever? No.

According to Digby:

And in the meantime you have the deficit fetishists taking the opportunity to pimp debt as the cause of the economic crisis and shock doctrine their way into the destruction of entitlements. They are doing that by conflating the short term need for stimulus etc with the Wall Street bailouts and the deficit. And now they think that those are the things that caused the recession. Now, whether the Democratic congress will allow the deficit scolds to push through a cat food commission is unknown, although there's plenty of reason to believe that the political establishment sees this as a "go to China" moment that needs to be done under a Democratic president.

Couple of good questions about taxes and who should pay them.