Ben Bernanke is taking no chances. With his confirmation hearing for continuation as chairman of the Federal Reserve System only days away, he has written an op-ed for publication in Sunday’s Washington Post. We may interpret this article as a preemptive attack on his congressional critics, some of whom will no doubt take the opportunity afforded by next Thursday’s hearing to attack his management of the Fed and, indeed, the Fed itself.
Monetary-policy propaganda is a high art, and lay readers of Bernanke’s article may well be taken in by its artful formulation. Therefore, as a public service, I offer the following brief commentary, interweaved with CNN’s Saturday report on Bernanke’s Sunday op-ed.
NEW YORK (CNNMoney.com) — Federal Reserve Chairman Ben Bernanke, just days ahead of his confirmation hearing, is warning Congress that actions limiting the central bank’s independence could prove detrimental to the causes of financial reform and economic recovery.
Such a warning seizes the high ground by creating the presumption that Bernanke and the present Fed have proved themselves to be beneficial to the causes of financial reform and economic recovery. In the circumstances, that’s a highly questionable presumption. Some of us are inclined to believe that, all in all, the Fed and its glorious leaders, especially Alan Greenspan and Ben Bernanke, got us into our present troubles in the first place and that they have done nothing wise of late to repair the damage they brought on us, acting instead to create enormous risks for our future well-being and, in particular, great risks for the future purchasing power of the U.S. dollar.
Read the rest