More Opinion by The Springboard

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Thursday, September 18, 2008

BEN BERNANKE SHOULD RESIGN HIS POST AS FED CHAIRMAN

I want to wring Ben Bernanke's neck. His, and the Fed's belief that in order to restore the economy we have to get the credit markets moving again is absolutely ludicrous, if not downright stupid. I can't help but think that credit was and is the very reason we are in this situation to begin with.

It doesn't take a rocket scientist to conclude that there was clearly far too much access to credit, and the only criteria for getting it was to have a pulse. We'll not even go into the shenanigans that went on behind the scenes at the world's biggest banks with regard to mortgage backed securities and layers and layers of margining.

The simple truth about credit is that at some point someone has to pay it back. It's a loan. It's not really the borrower's money. It therefore shouldn't be what drives consumerism. That should come from good wages provided from gainful employment. If our economy was as strong as we'd have ourselves believe (I thought it was stronger too as earlier blogs would indicate, but I've now been forced to reconsider), then consumerism would have been more a product of people having real money in their pockets to spend, from real jobs. Not from credit. In addition, they'd have had real savings that could be used to bail themselves out of a problem if something went bad. Unfortunately that is not the case at all, and the proverbial shit has literally hit the fan.

The fact is that wages have been stagnant in this country for a very long time. Companies have been allowed to ship work overseas and good, high paying industrial jobs which were the backbone of the middle class have all but gone. The ones that are still here teeter on the brink of extinction.

I think that's thanks to credit. The whole idea of credit seems to have effectively replaced the greater need for income. And when everyone can get credit, and get things with it, it creates the perception, rather than the reality, that people have money to spend, and therefore everything is going well. Right?

Wrong.

We've been misled to believe that money is available no matter what, and that we can therefore borrow to our heart's content, heedless of whether or not our incomes would ultimately support that. That kind of thinking has led us down a very precarious path, and we're now feeling the harsh reality of that. I don't get why the Fed doesn't get that as well.

Who needed to have a good job? So long as we could have a credit card in our wallets we could rule the world. Even the 40-something working the french fry vat at the local McDonald's restaurant carried a Platinum Visa in his wallet.

And let's not forget the other side of the coin. The CEOs, who continue to rape the average American worker of their wages and benefits while cashing in their own paychecks worth millions of dollars in salaries and bonuses - even while their own companies and finances go down the tubes. To them, job losses were okay and paying people less was okay as well. The money flow was still in a nice groove despite it all.

What the government powers-that-be need to do to in order for this economy to get rolling again, is to take a serious look at jobs. Jobs are, in my opinion, at the heart of it all. In order for people to obtain things to drive consumerism that has any real economic value, people need money. Good paying jobs provide that. Not banks and plastic cards. We need to restore in American's a real sense of security that their families, their lifestyles, and that their futures are safe. We need to foster a sense in American companies and the CEOs who head them, that capitalism only works if everyone, not just a select few, have a real chance to compete and achieve a gain. Jobs are what are important to the economy. We have to create them, and we must protect them.

As it stands right now, I don't think Ben Bernanke gets that. He therefore should resign. As for the rest of the Fed, it should rightly yank it's head from its ass-crack as well, or we are in jeopardy of a severe, and historic economic disaster.

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