Gorilla's Blog

Stop running with the inflation hawks, and lower the discount rate to (your choice, Ben, perhaps -5?) percent…

Hoarding zombies won’t be too keen on piling up more losses, so they might decide to be good, but courage, like unemployment, apparently is no longer in the Fed’s remit…

Ben wants to be seen as winding down, preparatory to being really semi-tough, so up goes the discount rate, markets think uh oh, the party’s over, and the economy tanks for another year (or three or four)…

Gorilla says: “Break through the zero bound and save America from itself!”

Helicopter Ben’s back in business, surviving a 70-30 confirmation vote in the US Senate, lowest total for a Fed Chairman since 1978, when Senate approval was first required.

It’s rewarding failure, of course, as Ben totally missed the housing bubble, but that’s pretty much the only accountability allowed in Washington these days.

Gorilla says: “Now if Ben would at last go 70-30 on unemployment v. inflation, the Fed might honor at last the dual mandate!”

Ben Bernanke jumped the shark this week by suggesting that lax regulation, and not low interest rates, caused the current economic disaster. It simply wasn’t the Fed’s doing!!!

Of course, when not raising rates to prick the housing bubble, he was the main regulator for the banks who created the housing bubble.

And he’s being renominated as Fed chief because of the great job he did in saving the banks and the US economy from the consequences of the housing bubble!

Gorilla says: “Laugh? Cry? Still treated like idiots, Americans are Fed up to here!”

Sure, Ben Bernanke and Alan Greenspan totally missed the housing bubble.

Their failure led to the worst economic downturn since the Great Depression.

Greenspan left with a reputation as the worst Fed chairman of all time.

Bernanke, on the other hand, stayed on and is about to be reappointed.

The financial system which brought on the disaster remains largely unchecked and is engaging, via the dollar carry trade, in precisely the same kind of risky behavior.

Only in Washington is total failure of this kind rewarded with new opportunities to repeat the same mistakes.

As Gorilla observes: “You can take Ben out of the helicopter, but you can’t make him fly any better!”