Wikinvest Wire

Sen. Jim Bunning fixated on Fed messes

Tuesday, July 15, 2008

Senator Jim Bunning (R-Kentucky) joins Ron Paul (R-Texas) as one of the few elected officials who understand one of the major reasons that financial markets and the economy are in the condition they are in today - the Federal Reserve.

In prepared remarks made earlier today as part the Senate Banking Committee hearing (hat tip hardwinterwheat) , Sen. Bunning made the following comments:

I'm deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan's easy money in the late 90s and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernanke's easy money in the last year has undermined the dollar and sent oil to a new high every day and an almost doubling since the rate cuts started.
...
The Fed is asking for more power but the Fed has proven that they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it farther than it was supposed to go in the first place. As I said a moment ago, their monetary policy is the leading cause of the mess we are in. As regulators, it took until yesterday to use the power we gave them in 1994 to regulate all mortgage lenders and then they stretched their authority by buying $29 billion worth of Bear Stearns assets so J.P. Morgan could buy Bear Stearns at a deep discount.

Now the Fed wants to be a systemic risk regulator, but the Fed is a systemic risk. Giving the Fed more power is like giving a neighborhood kid who broke a window playing baseball on the street a bigger bat and thinking that will fix the problem.
Yes, this is one of the more important "Greenspan mess" sightings.

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9 comments:

fish said...

Unfortunately this will go precisely nowhere as Senator Bunning is widely reported to be legitimately crazy!

Anonymous said...

Bunning (and, to a lesser extent, Paul) only seem crazy because everyone else accepts as fact the idea that we can continue to go on doing what we've been doing indefinitely into the future.

hardwinterwheat said...

What's up with all this 'at our discretion' emphasis by Paulson ? Give us this authority, and we promise we'll only use it if necessary, but if we do, whatever we do will be at our discretion. In other words, nobody gets any input after we get the authority. Sounds to me as if the Bush Administration is seeking total control over America's purse (or at least, what's left in the purse) in the name of saving Fannie & Freddie.

Dan said...

Why do they even ask for permission when they move unilaterally anyway?

joe said...

I agree with Dan, it's a complete joke that the government is accountability to anyone these days. Can't rely on media or even internet humor either! For example, http://tinyurl.com/5a225q

/exasperated

Adam said...

And you wanted to call this site Bad Macro.

fish said...

Bunning (and, to a lesser extent, Paul) only seem crazy because everyone else accepts as fact the idea that we can continue to go on doing what we've been doing indefinitely into the future.


I'm not talking about ideas that seem crazy! I'm talking legitimately crazy.

http://dir.salon.com/story/news/feature/
2004/10/12/bunning_kentucky/index.html

Tim said...

Thanks for the link. There was something very odd about his delivery - stumbling over the simplest of words and phrases - but what he said made nearly perfect sense to me.

Uh-oh...

dearieme said...

You mean you've got only two sane Senators, and one of them is mad? Goodness me.

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