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-- Brad Delong

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Tuesday, December 22, 2009

Thinking worse of Bernanke

Krugman (with some help) points out a huge mistake by Bernake, who absolutely should have known better.

So - Bernanke has fallen from MEH! to some even lower status.

He is still above the level of idiot at this point.  Further revelations are far more likely to lower then elevate, don't cha think?  How far off is is a DEEP STUPID post with Bernanke as the victim?

I don't have quite the right word for this new position.  Can someone help this poor man?

Still  - I guess this is no more no less than what you might expect from a Bush appointee.

From the WaPo article at the root of this revelation:

The central bank's performance has sparked a great debate about its future as a regulator, pitting those who want to expand its role against those who want to strip its powers. It also has come under pressure from politicians seeking greater oversight of its primary job, adjusting interest rates to moderate economic growth. The battles have complicated Bernanke's bid for a second term as chairman. The Senate Banking Committee voted to approve Bernanke 16 to 7 on Thursday, setting the stage for a January battle on the Senate floor.

The Fed's failure to foresee the crisis or to require adequate safeguards happened in part because it did not understand the risks that banks were taking, according to documents and interviews with more than three dozen current and former government officials, bank executives and regulatory experts.

The Fed's failure is in not doing what it is supposed to be doing.  Stripping its powers would be enormously counter-productive: the sort of solution only a Republican, Libertarian, or some other variety of IDIOT would think of.

MEH minus!
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