In March 2013 TPC wrote an article titled 'Ben Bernanke: Blather from the Ivory Tower!' that discussed the fact that, in our belief, he had absolutely no clue about a real world economy!
Today, after listening to Janet Yellen blather on about the real world she likely knows little about, we reprint that article with the need only to change the title from the above to the following:
Bernanke Q and A redux: Nothing but a snake oil salesman!
Back in December after a Ben Bernanke press conference like the one I am watching now, I wrote 'Ben Bernanke: Snake oil salesman! (Bonus animated video: QE explained)'. What I wrote then seems to still be just as relevant today. The video can be watched at the link above.
If any new writing had been required I would certainly offer it, however, what I heard from Fed Chairman Ben Bernanke this afternoon is simply more of the same:
Watching Ben Bernanke answer questions am I the only one who thinks he sounds as if he is just throwing s--t against the wall hoping that something will stick!
(While the lemmings (business news pundits) in his audience just seem to listen and nod)
To date the aforementioned s--t that I speak of is comprised by QE1, QE2, QE3, Operation Twist and whatever name they give to his announcement today.
And so far, nothing has worked typified by an unemployment rate that drops only because people have lost hope and have given up looking for work!
In any event, in our lives all of us have known "that" one salesman who tries every gimmick and plays every angle in order to put as much into the pipeline as possible hoping it will all close, when in reality very little of it ever will.
Ben Bernanke is that salesman who is expanding the Fed balance sheet to a point at which it will be impossible to reverse and yet, nothing in the economy actually seems to improve when you scratch below the surface of the numbers.
At the same time government borrowing spikes higher with treasury debt outstanding now at a point where the country cannot afford to pay for that debt and needs to borrow more money simply to service the interest due bondholders. And these bondholders to a large extent is actually our federal government itself!
Sufficiently confused yet?
Now imagine for a second the impact on federal spending were yields ever to revert to historically "normal" rates. Therein lies the Fed Chairman's true quandary.
He warns us about the dangers of Washington kicking the can down the road when it comes to "solving" the fiscal cliff but, if any agreement is actually put together, the people we are forced to call our leaders will do exactly that because after all when difficult and unpopular decisions need to be made politicians will be politicians.
Bottom line - Ben Bernanke is an academic who will continue to try his Ivory Tower methodologies to get us out of the mess that we are in, and we can only hope that he is better in the future than the unmitigated failure that he has been in the past!