Hope for Change: Yes We Can Fire Bernanke

Ben Bernanke, the Chairman of the Fed, is up for reappointment.  The economists all want him reappointed.  I want him fired.  Not because his replacement will be better, she will not, but because he will get what he deserves -- credit for a mess.  I recognize that firing Bernanke would mean the Administration would admit economic mistakes so it cannot happen, but I hope for change.  Bernanke is claiming credit for "stopping the meltdown" of the finanical markets.  To analize the claim one must speculate on what would have happened had he acted differently -- he claims he averted disaster.  Did he?  I am a doubter.  I believe he made things worse.  The history will show that the panic of Bernanke, Paulson and Geithner set in on the collapse of Lehman when the commerical paper markets were under threat.  This was the date of the potential meltdown.  Reconsider:  First, why the threatened collapse of the commerical paper market?  Paulson (and his buddies) had bailed out Bearn Stearns and led Fund to believe they would bail out Lehman.  As a result Fund did not take two serious offers to buy his company and did not take steps to seek new capital.  To this day, Fund is still stunned that the trio did not act to bail him out.  A consistant public policy at the time of the Bearn Stearns collapse could have averted the Lehman debacle.  [I would not have bailed out Bearn Stearns either, forcing Lehman to sell to the Korea Development Bank.]   Second, once the commerical paper market stumbled, what should the trio have done?  One commerical paper fund had "broken the buck" on its Lehman investments.  A targeted response, would prop up the commerical paper market.  The Fed buys commercial paper (which it did and which worked).  Instead the trio went blunderbuss.  They pushed anything and everything -- a pork laced stimulus package (which has not and will not work), bailouts of insurance, automobile and financial institutions (which are bottomless pits and compromise private markets), mortgage forgiveness (which has not worked), the purchase of mortgage backed securities (which has not helped the securitization market), attacks on executive salary, attacks on private equity, empty reform of finanical regulators and of the derivative markets, and the list continues.  It is the blunderbuss approach that is painful to watch.  Bernanke is taken credit for killing a fly on the wall with an 8 gauage loaded with buckshot.  He should be fired.