Besides the failures cited above to fulfill the Fed’s mission, he has also:
1) Continued to ignore asset bubbles, including the recent one in commodities.
2) Maintained a zero interest rate policy that represents a transfer of wealth from savers to a handful of failed large banks, that have refused to use their profits to lend to businesses or consumers. This policy has also deprived savers, especially the elderly and retired, of any decent interest income, forcing them to seek out risky assets like equities or commodities, thus fueling the bubble in these sectors.
3) Spoken repeatedly of the need to revive the economy through reflation and a restoration of the credit markets to their pre-2008 level, when the housing bubble was at it peak. Most of his rescue initiatives have been consistent with this policy goal.
4) Never once talked about the importance of deleveraging in all sectors of the economy, through either debt paydowns or defaults, as a necessity before the economy can revive. This would have forced Congress and the administration to deal seriously with the individual suffering caused by this deleveraging process.
5) Succored major banks with bailouts and ongoing preferential treatment, when these banks are very likely insolvent, judging by how the stock market treats them. This is a repeat of the Japanese experience with “zombie banks”, which led to 10 years of economic stagnation.
6) Usurped the Congressional power to borrow and spend by ballooning the Fed balance sheet without reference or approval from Congress.
7) Persistently allowed new banks like Goldman Sachs and Morgan Stanley to continue to act like investment banks or hedge funds.
8) Maintained a shroud of secrecy over Fed decisions and actions in the credit crisis, even to the point of filing delaying and obstreperous suits to prevent enforcement of court “sunshine” orders.
9) Insisted that the Fed’s low interest rates during the 2001-2002 recession had nothing to do with the ensuing housing bubble, an argument that is considered risible by almost all economists.
10) Received the strong endorsement of Alan Greenspan.
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