I have to laugh at the latest issues with the Fed's attempts to 'rescue' the faltering economy. Why laugh? Because if I wasn't laughing I'd be crying somewhat over how screwed up it's become or becoming.
Why is the economy this screwed up? Oh, there are obvious reasons that many could point to. The implosion of the housing market being among the highest on the list. Why did the housing market implode though? It imploded because Bernanke, like his predecessor Greenspan, saw a big bubble and just couldn't resist popping it. Never mind applying common sense to how you handle a bubble (slowly let the air out so it doesn't blow up in your face), nah, Greenspan and Bernanke never met a bubble they could resist running to pop.
Some might forget that Greenspan was a big bubble popper himself. Perhaps they missed the tech stock run-up and bubble bursting that good old Al Greenspan opted to pop. If they did miss it, well, I'd have to question where they were in 2000, 2001, and 2002 (for example), but it really doesn't matter.
Alan Greenspan saw a bunch of speculation going on, saw 'wealth' being created in the stock market, didn't understand it, couldn't touch it, and didn't like it, so he opted to pop the bubble and bring the market back down to good old terra firma. Only it bankrupted many, destroyed a lot of person's finances, retirement savings, and personal wealth, and basically destroyed the economy in the early 2001 time frame. Alan Greenspan's own personal recession. Oh, joy!
Well, here we are about 6 - 7 years later and his disciple Benjamin Bernanke seems to have learned from the worst, uh, best (I guess it depends upon how you look it). See a bubble, pop it! Never mind the results that might come from same. Never mind that the economy might not be ready for a sudden jolt. Just pop that bubble baby.
Both of these so-called economic geniuses are nothing more than, well, pictures say it better than words:
I know that there's a lot of hate out there for George W. Bush, the current President of the United States, but personally I think any hatred about his handling of the economy should be aimed at the two clowns, Bernanke and his predecessor Greenspan. The damage those two personally did to the economy thanks to their unjustified fears of runaway inflation and mythical creation of wealth have done much more to harm things than help.
I'm no fan of the idea of wealth built in a stock market where tangible goods or service weren't being traded upon, and I was and am no fan of the real estate run up in this country. Anytime there's a run to create wealth out of nothing there really is a problem. But with that said, the people that are responsible for keeping the economy on course need to remember to deal with things more slowly, more cautiously, and in a way that doesn't rock the apple cart for everyone. By attacking the problems that they did both Bernanke and Greenspan have hurt many innoncent individuals in this country. They've caused economic hardship for a lot of people that had done everything as they should and weren't speculating in the market place the way the money managers, realtors, brokers, bankers and others were. People that are now watching their wealth vanish so quickly that they can't deal with the impact of the situation. People that can't afford to make the payments they are being asked to pay because the market blew up on them with virtually no notice.
I guess I can't say no notice, and again I make no apologies for people that were too stupid to see that that they were getting suckered into purchasing homes that they couldn't afford, paying loans that never made a dent in their actual debt. Those people should have been smarter about what they were doing, and the people that misled them should be sued out of business for malpractice, fraud and anything else that might be worth charging them with. But what of the rest of us? What about the people that weren't taking these idiotic loans? We watch our 401(k) plans lose money hand over fist. We see the interest rates we earn on our money going in the wrong direction. We see our bills go up as the banks and creditors try to find more liquidity and more money to cover their own debts. Our credit card rates will increase and the ability to get credit gets tighter when it should be loosening up (as the Fed would seem to be encouraging through their rate cuts).
I said in the subtitle for this article that both Greenspan and Bernanke were like n00b drivers learning how to drive on snow or ice for the first time and it seems the most appropriate analogy. Over-correcting at the wrong times. Turning too hard to the left, or too hard to the right and just making things worse.
It's just a damned shame none of us were able to jump off the ride before these clowns did us all in.
