Uncle Bernie Takes His Snake Oil Show on the Road

Federal Reserve Chairman Ben Bernanke is on the road attending town hall meetings in an attempt to put a human face on his shady agency and its even shadier actions. The gatherings are reminiscent of those held by President Obama when he wants to provide the media sound bites and talking points to push his political agenda. Jim Lehrer, host of “The NewsHour” program on PBS, is serving as the road show’s “moderator.” How appropriate that Lehrer, a government shill, is giving Bernanke the same cover he provides our status quo politicians during debates.

David Huston, a small business owner from Shawnee, Kansas, was damning in the preamble to his Bernanke question:

I’m very frustrated. During the past year, when I see billons and billions of dollars sent to large financial institutions…I’m especially upset when I hear the fraise, and you use this, “that company is too big to fail.” As a small businessperson, that’s very hard to swallow. I feel like a more accurate statement of policy would be “too big to fail, too small to save.” My business, and thousands of others, fall into the “too small to save” category. Small businesses employ more people than the Fortune 500 companies combined. Small businesses represent the life-blood of small cities, large cities and our American economy. Innovation and creativity is coming from small businesses. But I truly believe that small businesses…

Realizing that Mr. Huston’s testimony was better suited for a federal Grand Jury room, Jim Lehrer intervened, “Do you have a question?” Mr. Huston, however, continued:

…Small business is getting shortchanged by the Federal Reserve, the Treasury Department and congress. Am I wrong on this perception?

The obviously uncomfortable Bernanke answered as best he could:

…Nothing made me more frustrated, more angry, than having to intervene – particularly in a couple of cases where taking wild bets had forced these companies close to bankruptcy – there’s nothing that made me angrier than having to do that.

Why did we do it? Because, if that company had collapsed in the middle of a crisis, it could have brought everything down.

Some economists believe the Fed’s intervention only delayed the inevitable day of reckoning. The Treasury’s own Inspector General for the Troubled Assets Relief Program (TARP) estimates the cost of the current bailouts will total $24 trillion dollars. Bush and Obama’s policy of “Too big to fail,” which created a phenomenal debt to service, will divert vast sums of capital away from – as Mr. Huston from Shawnee, Kansas eloquently said, the life blood of the American economy – small business – shifting it to the less efficient bailout companies managed by the financial geniuses who placed their loosing bets on Mortgage-Backed Securities.

What Mr. Bernanke will never admit is that Fed policies, which kept interest rates artificially low and money cheap, fed the speculation in housing. The Fed’s low interest rate strategy, coupled with the “affordable housing” policies of congress and the White House (to the shame of both political parties) seems destined to turn America’s economic future into a “troubled asset.”