Perhaps you haven’t noticed this important little bit as you have been too distracted with digging your way out of debt, busting your ass at work just to keep up and grateful for your job regardless, or this nonsense about Obama’s choice for Supreme Court Justice. All of this noise is important, of course, because it further exposes Obama’s weaknesses; the poor cabinet choices (unless a crack team of tax cheats was the intended goal), the recklessly destructive attempts at economic repair thanks to his incredibly blind “advisers,” and the tendency to take on far more than “The State” was ever meant to handle.
Obama himself has insisted that though it may appear the opposite, he would prefer that the United States stay out of corporate affairs. Let us keep in mind that he said this just as GM was being led to the lethal injection chamber by Obama’s own team. Let’s face it, being owned by the United States government at this point is akin to a death sentence – just one more tumor devouring the host. What next? We’ve taken on the banks (who are still wandering aimlessly down Wall Street growling for braaaaaiiinnns), the automakers, the auto PARTS makers, the insurance companies; we have, at this point, even taken on ourselves. You did understand that this is what the Federal Reserve decision to buy Treasury bills on a massive scale equates to, right? Just making sure we are on the same page here.
How is that working out, by the way? Badly. The consensus amongst the armchair economists is that the bond market has begun its not-so-delicate unraveling and will shortly implode. Without this, one of the last “safe” investments remaining in a tumultuous and almost hallucinatory global financial market, Obama will have few options left to fund his promises, like the $787 billion Stimulus (no, it hasn’t been paid for).
But let us set aside the financial crisis momentarily and ignore the dollar’s red flags. Obama’s true challenge, disregarding the rest of the noise, is still ahead. Soon, he will have to start considering who he would like to replace Ben Bernanke as Chairman of the Fed.
Bernanke’s term expires on January 31, 2010 and Obama’s people have certainly made it clear that the President does not intend to keep him in his post beyond that date. The first sign Obama wasn’t too keen on another term for Helicopter Ben? Sticking Timmy the Two Bit Tax Cheat Geithner in the Treasury, leaving ex Harvard President Larry Summers’ calendar free for “Take Over the Federal Reserve” on February 1st, 2010.
So, you say?
So, Larry Summers is, as one blogger put it, “a walking, talking conflict of interest.” Summers has collected millions in speaking fees from firms like Citigroup (multiple bailouts ring a bell?), Goldman Sachs (NY Fed/Goldman scandal sound familiar?), and Bank of America (CEO Ken Lewis working with ex Treasury Secretary Hank Paulson and Ben Bernanke to possibly mislead investors, anyone?).
The New York Times paints a lovely picture of Summers saying “Mr. Summers, who will be 54 on Nov. 30, is universally described as brilliant, but is also renowned for being arrogant, occasionally rude and sometimes difficult to work with.” The article goes on to discuss Summers’ infamous reputation as a sexist after “girls don’t do economics” comments were, according to him, taken out of context some years ago.
All of this being said, please do not misconstrue my feelings for Ben Bernanke. Though a declared Republican, he does not subscribe to the exuberant idealism his predecessor Alan Greenspan brought to the Fed Chairman position. Someone described Bernanke’s politicism as being “asexually Republican” – the Ken doll with a bump of plastic under his suit and no expressed or obvious political affiliation to be found. Printing the United States into bankruptcy is certainly not a Republican trait I am familiar with.
So it cannot be Ben Bernanke’s politics which would motive President Obama to let his term expire. And even when we get rid of Bernanke, he’ll still stay on at the Fed board through 2020. 2020 until we can get rid of this money-printing manic depressive!
The Fed is failing and hard (see Treasury bills above). Whether or not this burden should rest entirely on Bernanke’s shoulders has not yet been decided. From the eyes of the funny-money-hungry Obama administration, it appears as though that doesn’t matter. Perhaps Bernanke doesn’t print quickly enough to keep up with President Obama’s promises and Summers will be better equipped to implode what remains of the dollar?
This will be interesting to watch. I sincerely hope Mr Obama manages to find a Fed Chairman who at least knows how to pay his taxes; if he picks a 7th tax cheat, and to head the Fed none the less!, I will have officially lost my faith in any chance this administration has at digging us out of this total economic disaster.