Global Arsonist named TIME's man of the year!

For the majority of the year the managers of America's economic news have been issuing headline-after-headline declaring that 'green shoots' were upon us, jobs growth was around the corner, consumer confidence was returning, the banks were once again sound, and corporate profits are once again booming. To date, none of these exaggerations have been remotely correct; including the statement by Ben Bernanke, "that the recession is very likely over."

In terms of understanding propaganda, 2009 has been another boom year. Much like the Bush years, where government lackeys bemoaned the fact that little good-news was being reported about the Iraq war, the Obama administration has likewise, with the collusion of mainstream media (MSM), produced voluminous statements to create the public perception that the global economy was on the mend. This week Ben Bernanke, chairman of the Federal Reserve, was named TIME magazine's man of the year. To the glee of media bobble-heads everywhere, Mr. Bernanke has single-handily prevented America from sliding into a depression. Endless articles have now been written about how in the darkest moments after the collapse of Lehman Brothers, Bernanke marshaled all the power of his office to save capitalism and right the debt-laden banks from implosion. It's a compelling narrative, but one that is completely false.

Bernanke, Greenspan, and the rest of the laissez-faire economists of the Federal Reserve not only ignored regulating the housing bubble and the "shadow economy" that included the toxic assets that brought down Bear Sterns and Lehman Brothers, but encouraged the expansion of these bubbles. Bernanke served as one of the Fed's governors from 2002 to 2005, and then did a brief stint as head of the Council of Economic Advisers before taking over as Fed chair in early 2006. There were few people in government who were better situated to correct the "irrational exuberance" in the markets than this man.

In the fourth quarter of 2007, Bernanke repeated to congress and the media that there was no need to cut interest rates and that there was no recession on the horizon. Weeks later, he cut interest rates. He remained steadfast afterwards that the economy in 2008 would be "strengthening as the effects of tighter credit and the housing credit began to wane." However, his actions and private statements belied the opposite was occurring. Two months after he gave his prepared statements to Congress, the greatest economic downturn since the Great Depression began December 2007.

When the September Crisis of 2008 unfolded, the FED loaned at least $2 Trillion dollars to both US and foreign banks. Economist Dean Baker, co-director of the Center for Economic and Policy Research, elaborates on Bernanke's perfidy at this critical juncture:

[Bernanke] has refused to provide the public, or even the relevant congressional committees, with information on the trillions of dollars in loans that were made through the Fed's special lending facilities. While anyone can go to the Treasury's website and see how much each bank received through Tarp and under what terms, Bernanke refuses to share any information on the loans that banks and other institutions received from the Fed.

Where we do have information, it is not encouraging. At the peak of the financial crisis in October, Goldman Sachs converted itself from an investment bank into a bank holding company, in part so that it could tap an FDIC loan guarantee programme. Remarkably, Bernanke allowed Goldman to continue to act as an investment bank, taking highly speculative positions even after it had borrowed $28bn with the FDIC's guarantee.

The rational in naming Ben Bernanke as the most important person of the year, is simply to provide him with official credibility in the face of the ruinous laissez-faire ideology that has held sway over Washington for the past thirty years. Wall Street has given the MSM its orders to present the fiction that Mr. Bernanke is the man who saved the world and who must naturally be given another term as FED chairman. The financial world that existed pre-Lehman Brothers no longer exists and the elites who destroyed the world economy, do not wish anyone to understand the scope of their mismanagement in hyping casino-capitalism, while destroying the American dream.

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Additional blog postings and links of interest:

Eliot Spitzer has "Nine Questions for Ben Bernanke," which to date, none have been adequately addressed by either Mr. Bernanke, the FED, or the feckless MSM.

Critics who said Bernanke should not be re-appointed: Nassim Taleb, Anna Jacobson-Schwartz, Senator Bernie Sanders (I-VT), and Ron Paul (R-TX) to name a few.

People who have advocated Bernanke's reappointment in the media with reservations are Nouriel Roubini and Paul Krugman.