Friday January 31, 2014 is Bernanke's last day on the job....what will his legacy be?

Goldbully

Quantitative easing is quite pleasing for the U.S. economy......just my random rhyming thought.
What's yours?

MGLICKER

"Printing $4 Trillion in new loot will flush us down the chute"

roadrunner

Letting the big banks go wild in running up the market from 2009-2014 using the additional $3 TRILL in reserves provided by the FED.

He currently gets credit for helping to keep the world's financial system from self-destructing in 2008....even if he helped to cause it. But that will all be forgotten when the next liquidity crisis shows up and does implode the
banking system. All he did was delay the inevitable.

derryb

He will be remembered for proving that economics is a social event and not the science he believed it to be.

OPA

He'll be remembered for saving the financial system and avoiding a 1929 style meltdown followed by the great depression, when the Fed Govt decided "keep hands off."

derryb

<< <i>He'll be remembered for saving the financial system and avoiding a 1929 style meltdown followed by the great depression, when the Fed Govt decided "keep hands off." >>


And how will the other 99% remember him?
I believe history will show that he only delayed and multiplied what should have been allowed to happen. Iceland took the right approach and is all the better for it.

MGLICKER

<< <i>

<< <i>He'll be remembered for saving the financial system and avoiding a 1929 style meltdown followed by the great depression, when the Fed Govt decided "keep hands off." >>


And how will the other 99% remember him? >>



Good chance that 51% don't even know who he is. They will long feel the terror of his reign though as necessities become prohibitively expensive. They will of course blame the retailers and the Republicans for their dilemma.

cohodk

He will be known as decisive and unwavering. A rare man in these times. He will be remembered favorably.

MGLICKER

<< <i>He will be known as decisive and unwavering. A rare man in these times. He will be remembered favorably. >>



I disagree. He often spoke of his lack of real world economic experience and his concern that the outcome of these financial experiments were unpredictable. I will give him credit though for being dealt a lousy hand by the DC free spenders.

VanHalen

<< <i>Friday January 31, 2014 is Bernanke's last day on the job....what will his legacy be? >>



We'll know in a few short years. If what happens ends up being what looks like is going to happen? Ben B. will go down as far worse than Alan G. If somehow a depression is avoided in the next decade? Ben B. will be regarded as the second coming. Right now Vegas' line is 5 to 1 against Ben B.

piecesofme

He'll be remembered as the beginning of the end of the way we approach troubling financial headwinds.
In other words, Mr. Band-aid on a gunshot wound to the chest.

derryb

Wall St. will shower him with rewards.

jmski52

He will be remembered as just another Keynesian academic who was recruited by the big banks as an apologist for monetizing our national debt in order to cover for their own gross mismanagement & corruption, and for paving the way for Janet Yellen.

OPA

<< <i>

<< <i>He'll be remembered for saving the financial system and avoiding a 1929 style meltdown followed by the great depression, when the Fed Govt decided "keep hands off." >>


And how will the other 99% remember him?
I believe history will show that he only delayed and multiplied what should have been allowed to happen. Iceland took the right approach and is all the better for it. >>



Poor example...Iceland's population is less than 350,000. Had he followed the 1920's mindset, doing nothing and let market handle it, I seriously believe that we would be debating it on this website. It would be "toast" along with uncountable other small and larger businesses, not to mention, pensions handled through private insurers such as AIG. It took a World War to get economy and financial system back in order. As a caveat, I agree, unless Congress wakes up, that the bill will become due and payable eventually, but it may fall on our grand or great grands kids to handle it.

MGLICKER

<< <i>As a caveat, I agree, unless Congress wakes up, that the bill will become due and payable eventually, but it may fall on our grand or great grands kids to handle it. >>



It is already falling on our kids and grandkids. Ask anyone out of college in the last 5 years how the job market is?

Baley

Bernanke will be remembered by most as a smart and talented man with a very difficult job who managed to steer a very successful course through difficult times.

Naturally, there will be a small subset of armchair quarterbacks who think themselves to be better economists than the chairman of the federal reserve;

the same type of internet know-it-all will tend to criticize the decisions of the superbowl coaches and players, oscar winning actors and directors, and other top performers.

MGLICKER

<< <i>Naturally, there will be a small subset of armchair quarterbacks who think themselves to be better economists than the chairman of the federal reserve; >>



I dunno Baley. I suppose 80% of us were smarter than Greenspan regarding home prices. After the crash, he was shocked and thought that home prices could never decline.

Is the Harvard Business Review an adequate citation?

Text

OPA

<< <i>

<< <i>As a caveat, I agree, unless Congress wakes up, that the bill will become due and payable eventually, but it may fall on our grand or great grands kids to handle it. >>



It is already falling on our kids and grandkids. Ask anyone out of college in the last 5 years how the job market is? >>



The same scenario was given 40 years ago. Unless you have a meaningless Liberal Arts degree or a degree that's no longer useful, you're doing just fine.

derryb

Bernanke did exactly what he was instructed to do. So will the next one.

VanHalen

<< <i>Bernanke did exactly what he was instructed to do. So will the next one. >>



This is largely the case. Simply doing as "he was told to do" is pretty accurate.

roadrunner

Yes, he will be known as decisive and unwavering in predicting there were no bubbles in housing, stocks, credit, derivatives, etc. from 2004-2008. He always said they had it under control...until he said they didn't in Sept 2011
as Lehman blew up. Those guys had no idea what it meant to allow Lehman to fail until they let it happen. What Sinclair predicted all along happened (ie when you allow someone to fail all their derivatives have to be paid off
at 100%). Ironically if the FED had done nothing from 1995-2009 and let market forces dictate what was happening.....things would have gone quite well and we'd be saying today what swell Chairmen Greenspan and Bernanke
were.

He will be remembered favorably........by the "winners" who write history books (and those that tell those who write the history books how to write them....the politico's and financial top 1% )
Even Sinclair says Bernank & Co. saved the financial system in 2008. But he also says they created the problems that required their action to save said system from themselves. Isn't that like commending the
less than competent Skipper and Gilligan for "saving" the passengers from their 3 hour tour? All they had to do was consult a weather report before heading out? The FED doesn't do that either.

derryb

Best to judge him on results and not what "might have been."

Bernanke, Paulson and Geither prevented a bank run in 2008, not to protect Americans but to protect bankers. Americans have been paying dearly (and bankers have been profiting) for it ever since. We won't know if it was worth the cost until the costs end. I firmly believe the costs will not end until the system is allowed to wash itself clean of bad debt and losers are allowed to lose.

Gallop poll results:

MGLICKER

<< <i>

<< <i>

<< <i>As a caveat, I agree, unless Congress wakes up, that the bill will become due and payable eventually, but it may fall on our grand or great grands kids to handle it. >>



It is already falling on our kids and grandkids. Ask anyone out of college in the last 5 years how the job market is? >>



The same scenario was given 40 years ago. Unless you have a meaningless Liberal Arts degree or a degree that's no longer useful, you're doing just fine. >>



If you mean working 29 hours at McD's and getting 3 hots and a cot in their bedroom at the parents house, yes they are doing just fine.

renman95

<< <i>Bernanke will be remembered by most as a smart and talented man with a very difficult job who managed to steer a very successful course through difficult times.

Naturally, there will be a small subset of armchair quarterbacks who think themselves to be better economists than the chairman of the federal reserve;

the same type of internet know-it-all will tend to criticize the decisions of the superbowl coaches and players, oscar winning actors and directors, and other top performers. >>



I could've done a better job. Period.

Connecticoin

<< <i>Best to judge him on results and not what "might have been."

Bernanke, Paulson and Geither prevented a bank run in 2008, not to protect Americans but to protect bankers. Americans have been paying dearly (and bankers have been profiting) for it ever since. We won't know if it was worth the cost until the costs end. I firmly believe the costs will not end until the system is allowed to wash itself clean of bad debt and losers are allowed to lose. >>



They did a bit more than that. They protected the world economy from collapsing, likely averting a global depression that could have been far worse than the 1930s.

JCMhouston

I believe in 20 years he will be studied as the best central banker of our time. Iceland comparisons are just a red herring as it has nothing to do with the rest of the world. Iceland essentially repudiated deposit safety, let the banks go out of business and left the depositors in other parts of the world with nothing. If the US was to do that it would be a good way to put the entire world back into a 1920's depression.

And who has done a better job? The system of government doing nothing hasn't worked in Europe, all the countries trying that are mired in a downturn that hasn't even though about easing. I'm in London now and the only people doing well are the bankers, the economy here is much worse than ours for the middle class.

derryb

TIME wounds all heels:

MGLICKER

<< <i>They did a bit more than that. They protected the world economy from collapsing, likely averting a global depression that could have been far worse than the 1930s. >>



They destroyed the concept of free enterprise and fair competition. The too big to fail will grow and prosper as the small guy with a dream will flounder and sink, while his massive tax burden will nurture the oligarchs.

Would have preferred the risk of Depression.

jmski52

They destroyed the concept of free enterprise and fair competition. The too big to fail will grow and prosper as the small guy with a dream will flounder and sink, while his massive tax burden will nurture the oligarchs.

Oh, but that's only for starters. They pulled the plug on the real economy, and now all we can hope is that the drain can be stopped before all of the little toy boats get sucked into the whirlpool. It's not over until the system gets fixed such that workers can become savers and savers can depend on not being screwed in the end.

In my opinion, that would require a dismantling of the banking cartel combined with a fair number of honest politicians. What are the odds of that happening?

MGLICKER

<< <i>In my opinion, that would require a dismantling of the banking cartel combined with a fair number of honest politicians. What are the odds of that happening? >>



Same as a minivan full of Polar Bears showing up at Al Gores mansion for the Super Bowl with a case of Leinenkugel.

derryb

the "cure" will eventually prove to be worse than the "disease."

OperationButter

<< <i>The same scenario was given 40 years ago. Unless you have a meaningless Liberal Arts degree or a degree that's no longer useful, you're doing just fine. >>



Will have to disagree. Wish you were right on that but you are very far off.

Connecticoin

<< <i>

<< <i>They did a bit more than that. They protected the world economy from collapsing, likely averting a global depression that could have been far worse than the 1930s. >>



They destroyed the concept of free enterprise and fair competition. The too big to fail will grow and prosper as the small guy with a dream will flounder and sink, while his massive tax burden will nurture the oligarchs.

Would have preferred the risk of Depression. >>



Letting AIG fail would have almost guaranteed a global depression. All (or almost all) the money was paid back.

I would have preferred not spending $1 Trillion on pork barrel spending disguised as "stimulus".

derryb

what will his legacy be?

That he made gold fashionable and affordable:

pf70collector

Problems with our economy are structural that can't be fixed by massive printing (QE) central planning and ZIRP creating asset bubbles and distorting natural market forces.

MGLICKER

<< <i>Letting AIG fail would have almost guaranteed a global depression. >>



So now the financial institutions are bigger and more vulnerable than in 2008. We have gained nothing and lost much.

Justacommeman

<< <i> He will be remembered favorably. >>



I agree. I once did not.

MJ

derryb

<< He will be remembered favorably. >>

longer than Greenspan was?

Justacommeman

<< <i><< He will be remembered favorably. >>

longer than Greenspan was? >>



yes

MGLICKER

<< <i><< He will be remembered favorably. >>

longer than Greenspan was? >>



He will be remembered favorably by his banking buddies on Wall Street who are no doubt prepping his cushy corner office and 8 figure paycheck.

Loans at zero interest for 6 years to Trillion Dollar banks, while senior citizen savers earn zero on their hard earned savings, is borderline criminal.

His legacy is a farce.

VanHalen

<< <i>

<< <i><< He will be remembered favorably. >>

longer than Greenspan was? >>



He will be remembered favorably by his banking buddies on Wall Street who are no doubt prepping his cushy corner office and 8 figure paycheck.

Loans at zero interest for 6 years to Trillion Dollar banks, while senior citizen savers earn zero on their hard earned savings, is borderline criminal.

His legacy is a farce. >>



8 figure paycheck? Surely you jest. Ben B. will be a Wall Street billionaire within 5 years. His little Brookings stint will be a two year smokescreen - max.

Baley

Just about all people from the past who are generally regarded today as good or great people, in their own times either had mixed reviews from their contemporaries, or were widely disparaged.

At least some of the critics of these historically great men, in their own times, had their own reasons for their opinions, as well agendas (mostly out of self-interest) for why they were communicating their opinion in the blogs of the day.

MGLICKER

<< <i>At least some of the critics of these historically great men, in their own times, had their own reasons for their opinions, as well agendas (mostly out of self-interest) for why they were communicating their opinion in the blogs of the day. >>



You got me there Baley. I do have a great self interest in a low inflation environment . I buy groceries twice a week and do not like to see 10% annual increases on the foods that we enjoy.

I also have an interest in seeing my younger family members share in the same opportunity that the US economy offered me. A chance for a reasonably priced education and a chance to start a business, not once, but three times.

Treating Frn's like toilet paper and manipulating financial markets with impunity will most certainly leave a stain lasting 50 years.

Baley

then blame supply and demand and your fellow consumers' competition to buy your favorite goods and services; also blame advertising for increasing the demand for those delicious products.

The data clearly indicate that there is not general, across-the-board 10% annual inflation due to "money printing" or anything else. If you're seeing 10% yoy price increases in your shopping list, for consecutive years, while other products are stable or going down in price, it ain't the Fed's fault, in my strong opinion.

Edit to add: for example, beef is high because of a widespread drought, which decreased grazing grass quantity and quality and led to increased grain prices. Ranchers in the aggregate cut their herds to the lowest head count in years. of course beef prices have gone up the last few years more than most foods.

but now, drought area is down from 70-something% of primary ranching regions to the mid fifties, still bad but ranchers are starting to increase herd sizes again, in the aggregate. Beef prices should come down some from these record levels. Let's see if that happens, if it does, it won't be due (soley at least) to general price deflation or because the fed is continuing to taper.

but, then again, maybe i'm wasting my time typing all this out..

MGLICKER

<< <i>then blame supply and demand >>



I agree. When the supply of money quadruples, retail prices increase.....dramatically.

Baley

So the retail prices of the work or product(s) that you, me, and everyone else sell are up proportionally too, then? you know, because inflation inflates the prices of everything equally, right?

Or is maybe Smith's product selling really well, so he can raise prices and still sell them all, and Jones' product is not selling so well, so he has to drop the price to move inventory?

jmski52

It's never proportional, Baley. A big chunk of the benefit goes directly into banker's bonuses, banker's offshore accounts, luxury apartments, luxury vacations and luxury products. A big chunk of it goes to subsidize public union pensions and auto workers unions that are otherwise bankrupt, in return for political support at election time. A big chunk of it goes to military subcontractors and military hardware suppliers. Some of it goes to subsidize welfare programs.

And some of it makes it's way into the economy, including gas & food prices.

Baley

<< <i>It's never proportional, Baley. A big chunk of the benefit goes directly into banker's bonuses, banker's offshore accounts, luxury apartments, luxury vacations and luxury products. A big chunk of it goes to subsidize public union pensions and auto workers unions that are otherwise bankrupt, in return for political support at election time. A big chunk of it goes to military subcontractors and military hardware suppliers. Some of it goes to subsidize welfare programs.

And some of it makes it's way into the economy, including gas & food prices. >>



that's right. And the people who build and furnish luxury apartments, run luxury hotels and resort properties, and manufacture and sell luxury products and all the other things you mention, are probably doing pretty well too. So they buy high to mid ranged products, take nice but not extravagent vacations, and have nice but not extravagent homes and furnishings. And the manufacturer's, distributors, and salespeople of those products then buy a host of lower range goods and services.

folks work their way up or fall on down the supply demand curves, based on the demand for their goods and services they provide to others, and their operating margin?

aren't we saying that life just ain't fair?

MGLICKER

<< <i>folks work their way up or fall on down the supply demand curves, based on the demand for their goods and services they provide to others, and their operating margin? >>



Are you forgetting about cash for clunkers, Solyndra funding, govt purchases of mortgage backed securities? The pork barrel farm bill and free money for people that refuse to work?

What about subsidized student loans and the biggest heist of all, free medical care at bogus $2,000,000 per surgeon pricing?

Sure, we have good and fair open markets.

cohodk

I thought this thread was becoming a pity party on us for not going to banker school.

jmski52

aren't we saying that life just ain't fair?

I stood in line tonight behind an older couple, I mean pretty old. They didn't have food stamps, and she was paying. It took awhile. It could have been my mom, if she were still alive. I really felt sorry for them. There's nobody looking out for them. I watched them put their food in the back of the old pickup and then she got into the passenger side.

No Baley, life just ain't fair. And we'll all get there soon enough. My point is that the gluttons in society do very little work and siphon off way more than they should ever be able to get away with. So far, it hasn't affected you or me, but it isn't a victimless crime.