Quote:
Originally Posted by HappyTexan
Bernake was named Man of the Year for bailing out the financial system with money made out of thin air while maintaining a calm demeanor.
They couldn't find someone who was actually worthy of that award ?
|
This is why non-economists shouldn't diss people in economics. They simply don't get it.
Bernanke deserves the award. I just read the article. Did you?
He basically admits that the Fed was blindsided by the crisis but once he knew it was happening he stepped in very aggressively.
In terms of bailing out the financial system with paper out of thin air, yes, and we actually
profited from it. See, what happened was everyone was scared ****less and was screaming bloody murder and cursing the windows of their offices being made out of impact resistant glass. They were also desperate for cash.
A common misconception of what actually happened was we just gave them money. Yes, and no. We LOANED them the money and on top of that, some institutions created shares out of thin air which the government got a pretty sweet deal on, with preferred shares and guaranteed dividends. Many have now started to repay the loans and the time horizon on the shares is coming up, at which point the government will likely sell for a profit (thanks to the run-up in the market).
Another common misconception of what happened when we were "giving money away" to foreign governments while letting people go homeless. What really happened was that the dollar rose in value because people were seeking safe returns and like it or hate it, the USD is the most reliable investment. Why else would foreign governments require cash swaps? By the way, the US taxpayer got good returns on those as well since foreign governments needed them badly. A widely used statistic is we gave New Zealand roughly $3000 USD for every man, woman, and child for a swap. Well, the US taxpayer got about $3150 in return. How about them apples?
I hate how people just pile on the hate of Ben without really understanding economics or understanding what really happened.