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Vermont Senator Bernie Sanders is doing his best to stop the reappointment of Ben Bernanke as chairman of the Fed. He's circulating a petition to the people, Petition: U.S. Senator Bernie Sanders (Vermont), and also using his position on the budget committee to ask the tough questions.
In this week's Bernie Unfiltered, Senator Sanders explains his reasons for trying to block Bernanke's reappointment:
1. Where was Bernanke when Wall Street was making all these risky investments and extracting wealth from working and middle-class Americans resulting in the worst financial meltdown since the Great Depression? Why wasn't he regulating the banking industry and looking out for ordinary Americans?
2. Where's the money that the government gave to banks? Senator Sanders asked Chairman Bernanke which institutions received these zero interest loans for billions and billions of dollars and Bernanke refused to tell him. This lack of transparency is ridiculous. It's OUR money. It didn't come out of Bernanke's pockets, but US taxpayers'. We deserve to know which institutions got the money.
3. Where's the regulation since the collapse of the banking system? Why didn't Bernanke limit the amount of interest banks could charge ordinary Americans at say 15% (which is what credit unions charge) instead of still letting them charge 30%? Why weren't executive compensation packages regulated? Why were the interests of large financial institutions put before the interests of ordinary Americans?
4. Why are these "too big to fail" institutions still around? Why hasn't Bernanke broken them up? If a financial institution is so big it can bring down the economy, then it shouldn't exist.
Most importantly, Bernanke has been wrong over and over again: he predicted there would be no collapse of the housing bubble, that the subprime mortgage crisis would not have a huge effect on the rest of the economy and that employment would expand. Okay, okay, we cannot expect anyone to predict the future, but he made these statements fairly late in the game, when many economists were already talking about the housing bubble and the subprime mortgages as creating a crisis. This is not a person who thinks outside of the box of Neoliberal economic theory- give money to the banks and the rich and prosperity will follow for all.
Instead of bailing out the banks, Bernanke could have reshaped them to give low-interest credit loans to small and medium-sized business. Bernanke could have stopped the greed, and forced productivity. He didn't because he does not care about economic activity from below. Bernanke, as everyone knows, wrote the book on how bank failure was the source of the Great Depression. As someone who has written a couple of books myself, it is difficult to think outside the conclusions you spent years drawing.
But it's not just his academic past that prevents him from working for ordinary Americans. This is also a man who represents the failed Neoliberal economic policies of the past 30 years. And it is time to get rid of Bernanke just like it is time to get rid of the ridiculous ideological claim that the "market knows best."
Of course there are a lot of serious people in the pro-Bernanke camp, including former classmate Paul Krugman.
But Obama needs to sacrifice Bernanke as a symbol of the Bush screw the average people policies. With Obama's escalation of the war in Afghanistan, he could make the symbolic move of siding with the people and not the banks in the class wars at home.