Bailing out depositors is in no way related to bailing out banks.
As long as deposits are insured, banks are fungible- which is proven every day as U.S. banks go under and are seamlessly absorbed by the FDIC, deposits, debts and all, consumers usually none the wiser.
As Chairman of the Federal Reserve, Bernanke had access years ago to methods that could have reined in an out of control financial sector. He used none of them. In his words, “Mistakes were made.” Apparently, no one is responsible.
He also failed to acknowledge that countries like Germany, which have refrained from looting their taxpayers to bail out the wealthy (much to Paul Krugman’s consternation ), have citizens who are doing better than we are because of their social safety net. I could find no mention of any tent city for the homeless in Germany. There is a growing number of them in the U.S.
Bernanke’s hollow attempts at populism – his declared anger at AIG for their misuse of tax money; his insistence that he is Main Street and not Wall Street – only underscored the impotence of the Federal Reserve as he has configured it.
Bernanke insisted that the trillions of dollars that he has authorized for bank bail outs are newly printed bills and not taxpayer money. That’s because there aren’t enough taxpayer dollars to go around. His unchallenged insinuation was that the new money is therefore cost-free for the nation, like it exists in some parallel universe. Are we being punked?
Bernanke’s most mind blowing assertion during the 60 Minutes interview was the analogy he used to explain the necessity for the tax payer bailouts of the wealthy. He said it was like a neighbor’s house on fire because the owner had accidentally fallen asleep with a lit cigarette. “The fire might endanger your house, too, so you call the fire department.”
Oh, really?
Here’s the real analogy: A group of thugs breaks into your house and deliberately burns it down while the police look the other way. The last thing you expect is to be forced to pay those delinquents for their smoke inhalation.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
