Lies my Fed Chairman told me

I've often wondered whether Fed Chairman, Ben Bernanke, believes his own hype, or if he is just so personally and professionally invested in perpetuating the story of the success of the greatest bailout ever compared to the most heinous of consequences that would have befallen us without it, that it doesn't matter.  

Either way, I cringed a little inside when he told the Financial Crisis Inquiry Commission this morning, 

"The single most important lesson of this crisis is we have to end the 'too big to fail' problem."

This coming from the man who, sat at the helm of the Fed in the fall of 2008, and approved without any conditions or questions, as per the Fed charter that equally provides for rejecting:

- The acquisition of Bear, Stearns and Washington Mutual by JPM Chase - making a big bank, bigger

- The acquisition of Merrill Lynch by Bank of America - making a big bank, bigger

- The acquisition of Wachovia by Wells Fargo - making a big bank, bigger

- The re-classification of Goldman Sachs and Morgan Stanley into bank holding companies - making the arena of big banks, riskier

Of course, no one on the commission asked probing questions about those brainiac decisions and how or why other alternatives weren't considered, particularly given the substantial government subsidies these institutions enjoyed on the way to becoming bigger and more Fed co-dependent. No one asked specifics of what the remaining subsidies to Wall Street still are. No one asked Bernanke what he meant when he implied that the new so-called financial reform bill would reduce the possibility of too-big-to-fail in the future,  given that the Fed totally ignored the fact that 3 of the institutions above subsequently surpassed or hit the already existing 10% concentration limits that had been designed to keep a lid on the notion of 'too-big' to begin with, and given the fact the the Fed either by itself, or in its position beside the Treasury Secretary on the new Financial Oversight Council, can override most future bailout decisions anyway.

Yet, we are supposed to believe that Bernanke is concerned about 'too big to fail? Really?? 

Maybe the Fed should rethink the term 'Economy'

Today, in a South Carolina speech, Fed Chairman Ben Bernanke repeated a bunch of stuff he's said in the past, stuff that confirms the status prevailing in his head - that he (along with notable DC cohorts) are invincible gods that stopped another Great Depression in its tracks simply by spilling out tons of money into the banking system, even if the results aren't that stellar for most of the rest of the country...

(note, I'm about to paraphrase him):

- The economic recovery isn't going as fast as we thought/said it was.

- We need to keep rates low so we don't choke the recovery that isn't going as fast we thought/said it was (though in practice that means banks will keep hoarding capital to trade and corporations will bulk up on debt.)

- The 'recovery' is still jobless (though he can't seem to understand why.)

- Households will probably start buying more at some point because incomes will magically rise which will help the economic recovery that isn't going as fast as we thought/said it was.

He probably said more, but I lost interest in the premise of his delusion - that the true majority of people in this country are feeling like they're actually in the midst of an economic recovery - slow or otherwise.

Since the trillions of dollars of bailouts poured into Wall Street, what's basically happened is:

- The largest banks are doing better (cause of the trillions of dollars).

- The largest corporations are reloading up on debt (cause of the trillions of dollars that went to their banks and the fact that rates are so low.) This July marked a month of record debt issuance for big firms.

And yet, none of this is translating into:

- Small businesses or individuals getting equivalently good terms on restructuring debt, or gaining loans for expansion or to keep current payroll numbers and not have to cut jobs. Instead, bankruptcies continue to rise.

- New jobs (people applying for initial unemployment claims continue to stream into that status at a rate of just under half a million a week, and that figure doesn't count freelancers or contractors who can't get unemployment so can't file claims to begin with). The unemployment rate is likely to push up to 10% again at this rate (even with DC figure tinkering), and that's not even including everyone who's underemployed.

- Higher general salaries (higher productivity yes - but, people working more hours for less money, is not the stuff of a true recovery.)

- Less foreclosures - the first half of this year marked a greater amount of home foreclosures than the first half of 2009 or 2008. 

Maybe it's time Bernanke reconsidered what the term 'economy' means to the general population.

What do you guys think - how should 'the economy' really be measured?