With the Fed blackout until next week’s committee meeting, former Fed chairs have been back in the limelight, pushing an agenda not necessarily in the best interest of “We the People.” As explained in an article featured in the New Yorker:
Although neither of them has appeared before a congressional committee since leaving the Fed, they have both emerged in recent months as vocal supporters of using monetary and fiscal policy aggressively to support the stricken economy.
This is no surprise considering that Ben Bernanke championed the “whatever it takes” attitude during the Great Recession, authoring one of the most proinflationist/anticapitalist essays of all time: Deflation – Making Sure “It” Doesn’t Happen Here. As well as calling for money creation, Bernanke and Janet Yellen voiced concerns that the White House’s upcoming spending bill shouldn’t be limited to a trillion dollars, harkening back to their glory days as chair, with the idea that it’s central bankers, not the free market, who bring about ultimate economic prosperity. As reported:
Yellen said it was hard to tell precisely how much financial support might be needed, so it would be unwise to impose a spending cap. Bernanke said, “Whatever it takes is probably what we need to be thinking now.”
The duo's proclamations are not the first during this crisis. Last month they headlined a letter signed by over 150 economists imploring Congress to:
immediately pass a “multifaceted relief bill of a magnitude commensurate with the challenges our economy faces.”
In the letter they argue that more spending is needed in order to save the economy. They even acknowledge the unprecedented levels of Congress and Federal Reserve support but insist that even more needs to be done! Strikingly, but not surprisingly given the deception and fear tactics required when asking for trillions of dollars, they warn:
Evidence from the Great Recession indicates that a prolonged economic downturn will seriously damage the economic opportunities and wealth accumulation of all Americans, but especially of families of color.
The letter was posted via the Washington Center for Equitable Growth, founded by political insider John Podesta; it’s a nonprofit organization which claims to be “dedicated to advancing evidence-backed ideas and policies that promote strong, stable, and broad-based economic growth.” It implies that the government and Fed support is for the people, especially the disenfranchised. According to the “experts,” intervention in the free market is necessary in order to avoid “prolonged suffering and stunted economic growth.” The option always seems to be that unless some receive bailout money, the poor will suffer. Of course, often the recipients of bailout money are those other than “the poor.”
Under the guise of economic know-how, these prominent people, aided by the mainstream media, convince the world that increasing the money supply to bail some out at the expense of others is a good thing. Unmentioned are the national debt, dollar destruction, and impossible task of allocating new money to those who supposedly “need” it.
That there is no voice testifying before Congress explaining the Austrian business cycle or blaming central bankers for creating the crisis we are in currently is quite concerning. No, “The people” only see two former Fed chairs testifying before Congress, demanding more spending, backed by economists from the most distinguished universities and colleges across the nation, like Harvard, Brown, Stanford, and Berkeley. To the masses, the experts know what’s best and it, of course, seems reasonable to give money to those most in need. Unfortunately, these ideas are not based on sound economic principles, and the disenfranchised groups as well as those on Main Street most likely will not benefit from these recommendations.
Isn’t it fitting that the ones who bring us into crisis are always the ones to bring us out? The Fed’s playbook hasn’t changed much in the last decade, other than in terms of the scope and scale of money being created. Few seem concerned with the anticapitalist policies that got us to this point, nor do they seem capable of understanding that while they claim to fight for equality, central bankers' interventionism and penchant for the printing press bring about an outcome diametrically opposed to the causes they claim to champion.
