26 Jan 2010

Bernanke Will Be Distracted at the FOMC Meeting

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Yikes, Senator Jim Bunning let out a bombshell today (HT2LRC):

A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernake covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide “troubling details” of Bernanke’s role in the AIG bailout.

Sen. Jim Bunning (R-Ky.), a Bernanke critic, said on CNBC that he has seen documents showing that Bernanke overruled such a recommendation. If that’s the case, it raises questions about whether bailing out AIG was actually necessary, and what Bernanke’s motives were.

A letter Bunning sent Monday to Banking Committee Chairman Chris Dodd (D-Conn.) also refers to an “[e]mail exchange regarding restructuring of assistance to AIG, initiated by Treasury Secretary Timothy Geithner” in March 2009.

Senators will be voting on Bernanke’s confirmation for a second term in the coming days. But only senators on the Banking Committee have had access to documents that illuminate just what decisions he made and how he made them. And that access only came after Bunning publicly complained that Dodd and Sen. Richard Shelby (R-Ala.) were the only members of the committee could see them.

Hmm. I think to understand this properly, we’d need to be like federal investigators and put up pictures of Bernanke, Geithner, et al. on a big board and just research everyone full time. By the end we’d look like Glenn Beck.

I earlier offered my theory that this was all staged, that the important people knew all along that Bernanke wouldn’t be reconfirmed. However, it’s hard for me to reconcile that theory with the White House’s apparently obvious attempts to round up support for Bernanke.

Let me simply say this: The mere fact that Rahm Emanuel and others are “reportedly” twisting arms behind the scenes, doesn’t prove that Obama really wants Berananke confirmed. I mean come on, these guys are professional liars. Their entire careers have been based on telling the public one thing, then doing the exact opposite.

I admit that there are always power struggles going on, that not everyone in DC has the same objective, and that Occam’s Razor suggests that we take the events at face value, rather than assuming everyone is putting on a show. Yet all conspiracy doubters must admit at least this: The reasons the various senators give for their intended votes, are bogus. We all know full well that Bernanke’s not making the rounds tomorrow assuring senators he will follow the Taylor Rule, or will implement a 2.7% NGDP growth target based on his careful study of Scott Sumner’s work.

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