Treasury Secretary Tim Geithner (pictured left), in a recent interview with Mike Allen of Politico warned that the financial markets could react negatively if Fed Chairman Ben Bernanke isn't confirmed for a second term. Geithner suggested that the market would see a failed Bernanke confirmation as "very troubling," but claimed that he was "very confident" Bernanke would receive enough Senate votes to win a second term. "The markets would view this as a very troubling thing for the economy as the whole," Geithner said. "I don't think they should be uncertain. I think they can be confident because we're very confident." Predicting that the U.S. economy will begin to show positive job growth by this Spring, Geithner added that Bernanke has done a "remarkable job of guiding this economy through the recession." The Treasury Secretary also expressed some sympathy for the millions of Americans still struggling to find work, or otherwise impacted by the financial crisis. The country is "in a moment where people are incredibly angry and frustrated by the damage this crisis caused…You see that across the country. That's perfectly understandable, and everybody involved in this effort is bearing a lot of the brunt of that frustration and anger." – Huffington Post
Dominant Social Theme: Great sorrow that a good man is not getting his due.
Free-Market Analysis: As of this writing, the tenor of reporting in Washington seems to have shifted. This past week, the story was that Ben Bernanke was not going to get reconfirmed as Federal Reserve Chairman. But after what appears to be a phone blitz by the Obama Administration, the tide has apparently turned. It is being reported by the mainstream press that enough Democrats and Republicans will vote for Bernanke to put him over the top.
Of course, one of the reasons for the shift may be the kind of rhetoric being used by the administration to warn the Senate about the consequences of not reappointing Bernanke. Geithner's rhetoric has in fact been mimicked by various Congressional leaders. Yet such rhetoric as regards the Fed (and central banking generally) is apt to be false and illustrate the cognitive dissonance that arises when purportedly free-market instrumentalities such as America's capital markets seem to endorse this sort of money monopoly. Unfortunately, Geithner's tactic is not new. The good news is that such approaches may become less effective over time.
We are not suggesting of course that Bernanke's reappointment doesn't matter. We think the erosion of the power elite's dominant social themes proceeds apace and that a repudiation of Bernanke would be seen as a repudiation of central banking. That would be a major step forward in our opinion. Also, if Bernanke is approved, it would be despite efforts to hold his appointment hostage to a congressional demand to "audit the Fed" led by libertarian Congressman Ron Paul (R-Tex). There are holds on Bernanke's reappointment in the Senate that will have to be overcome by a Senate vote before Bernanke can garner another term.
While the Obama administration did what it could to pressure Congress, elements of the mainstream media have rallied for Ben Bernanke. From our point of view such rhetoric is both depressing and enlightening. Here, below, is an excerpt from a recent article that appeared on the Fox News Internet site. ("Don't Let a Hysterical Congress Bring Down Bernanke"). What is interesting is that almost all the comments it attracted blasted the Fed as a bubble-creating money monopoly. We see this phenomenon over and over – the mainstream defense of business-as-usual receiving incredible push-back from the very readers it is intended to reach (and persuade) …
Political posturing should not prevent Ben Bernanke from being confirmed as Federal Reserve Chairman for another term. Lawmakers fearful of angry voters are holding Mr. Bernanke hostage, hoping that this will distance themselves from the unpopular bank bailouts engineered by the Fed (and Treasury Secretaries Paulson and Geithner) under both Presidents Bush and Obama. These are the same bailouts that virtually every serious business leader and economist credit as having prevented a repeat of the Great Depression.
This is Washington at its worse, or maybe it is simply what we have come to expect from Congress. Deflecting blame — loudly, belligerently, insincerely — passes for leadership from a body held in lower esteem by 40% of Americans than used car salesmen. (That is a fact.) The anger of voters is real; they are like the subject of Edvard Munch's painting – screaming for eternity, but inaudible. Congress professes to hear them, but is incapable of the intelligent and selfless management that voters want and that we so sorely need.
The Federal Reserve was established to keep Congress as far away from the management of the country's finances as possible. Consider the recent pork-laden spending bills as Exhibit A in why this was a very smart decision. The notion that Congress would have been better able than Mr. Bernanke, or indeed Alan Greenspan, to anticipate and deflect the financial crisis is truly laughable. There were, to my knowledge, two or three investors such as hedge fund manager John Paulson who saw the tsunami coming, who bet against subprime mortgages, and who walked away with billions in profits. Two or three-among tens of thousands. If it had been more obvious, those few would not stand out.
Moreover, it has never been the job of the Fed to puncture investment bubbles. That Bernanke embraced a limited role was evident from his first public speech after being appointed. He said in his remarks delivered at Princeton University that the Fed is responsible primarily for maintaining price stability, not for intervening in markets in order to control asset prices. He supported that view by claiming that the Fed is in no better position than the public to judge asset values.
We've often pointed out that the mainstream press is in increasing difficulties because it must in so many ways defend or justify the status quo in the West and especially in America, when it appears that the status quo is increasingly indefensible. It is the Internet that readers are turning to for a more open-ended read on what's going on, complete with a frame of reference that encompasses a valid historical conversation.
The article from which this excerpt is taken maintains that money needs "intelligent and selfless management." It states that the Federal Reserve was established to keep Congress as far away from the management of country's finances as possible. It also points out that it has never been the job of the Fed to puncture investment bubbles.
The United States was not founded with the idea that money needed to be managed by a central bank – and Presidents Thomas Jefferson and Andrew Jackson and others fought hard against one. The establishment of the Federal Reserve had little to do with a stated intention to keep Congress from managing the country's finances and was instead supposed to provide a "reserve" of last resort in case of a financial panic. Finally, the Federal Reserve, in printing money, provides the fuel for the ruinous bubbles that afflict Western society on a regular basis.
Fox is supposed to be a "conservative" or "right wing" editorial entity that stands for smaller government and fiscal conservatism. Yet this article, an opinion piece to be sure, is all too reflective in our opinion of the real agenda of the conservative mainstream press in America. There are certain areas that the mainstream press simply cannot go. The largest mainstream editorial entities simply cannot report with any great negativity on central banking, given that central banking money manipulation funds many of the power elite's promotional campaigns.
Central banking is nothing more than the monopoly control of the money system via a mercantilist enterprise that combines the authority of the government with the privilege and power of private enterprise. The ability to print endless amounts of money tricks unknowing citizens into building and expanding businesses that have no long-term prospects, perverts private industry and substitutes corrupt public entities for disciplined private ones, inflates the currency into nothingness and, while doing so, creates stock market "booms" that turn out to be as illusory as the enterprises that are created during these phony euphorias.
We would question why Wall Street, a supposedly capitalist enterprise in the aggregate, would be nervous about the reappointment of a money monopolist. This logical observation alone would lead us to conclude that the money system that has been set up is not as free a one as it purports to be. If it were a free-market system of investing and speculating then it would react positively to the idea that a money monopoly was under attack. How can Wall Street be a free-market investment system if it endorses the management of money stuff by a few elite technocratic bankers?
More than that, Bernanke's appointment is bringing out the proverbial bully-boy that lurks at the dark core of this monopoly money system. We interpret Geithner's predictions as a polite threat – who in Congress wants to vote against Bernanke if such a vote threatens to collapse the economy once again? These tactics are historical and are not in any sense new. Here's an excerpt from an article that appeared July 2009 at Infowars.com:
On Thursday of last week, the Federal Reserve's vice chairman, Donald Kohn, threatened to jack up interest rates if Congress continues to expose "some of the U.S. central bank's most sensitive decisions to political scrutiny," Reuters reported. "Any substantial erosion of the Federal Reserve's monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation," Kohn told a House of Representatives Financial Services subcommittee. Kohn's threat came as Ron Paul's bill to audit the Federal Reserve (HR 1207) has picked up 256 co-sponsors – more than 55% of the House of Representatives. HR 1207's companion bill in the Senate, S 604, has already attracted 8 co-sponsors. Kohn and his boss Ben Bernanke are obviously very concerned over the prospect that the American people may soon have a look at their books.
Those behind central banking cannot defend it with any level of intellectual honesty or rigor. Thus it is that the bottom line defense will always be one featuring the infliction of economic chaos if central banking is not sustained. In the past, this has perhaps proven enough (though not when Andrew Jackson was alive). In any event, it is the animating purpose of the Bell to point out that in the Internet era, such aggressiveness can have only a limited impact. The failure of the power elite's ongoing dominant social themes are due to the enlightenment of mass communication.
NOTED: Pelosi and Reid (pictured left) Plot Secret Plan for Obamacare … Highly informed sources on Capitol Hill have revealed to me details of the Democratic plan to sneak Obamacare through Congress, despite collapsing public approval for healthcare "reform" and disintegrating congressional support in the wake of Republican Scott Brown's victory in Massachusetts. President Obama, House Speaker Nancy Pelosi, and Senate Majority Leader Harry Reid all have agreed to the basic framework of the plan. Here's what I learned top Democrats are planning to implement. Senate Democrats will go to the House with a two-part deal. First, the House will pass the Senate's Obamacare bill that passed the Senate in December. The House leadership will vote on the Senate bill, and Pelosi will allow no amendments or modifications to the Senate bill. How will Pelosi's deal fly with rambunctious liberal members of her majority who don't like the Senate bill, especially its failure to include a public option, put heavy fines on those who don't get insurance, and offering no income tax surcharge on the "rich"? That's where the second part of the Pelosi-deal comes in. Behind closed doors, Reid and Pelosi have agreed in principle that changes to the Senate bill will be made to satisfy liberal House members – but only after the Senate bill is passed and signed into law by Obama. … This deal will be secured by a pledge from Reid and the Senate's Democratic caucus that they will make "fixes" to the Senate bill after it becomes law with Obama's John Hancock. … According to my source, Reid will provide to Pelosi a letter signed by 52 Democratic senators indicating they will pass the major changes, or "fixes," the House Democrats are demanding. Again, these fixes will be approved by the Senate only after Obama signs the Senate bill into law. Reid also has agreed to bypass Senate cloture and filibuster rules and claim that these modifications fall under "reconciliation" and don't require 60 Senate votes. … This plan, of course, is a total subversion of the legislative process. – Dick Morris / Newsmax
The power elite may see a series of crises to overcome, but in fact the crises will not end because they are part of a communicative process that is attacking the fundamental structures of societies. This is a perception that even the alternative press finds hard to absorb. But history seems to show us that this is the case. Bernanke may be reappointed, but his problems in our estimation will only increase. The push back will only grow stronger. From our perspective it is truly aimed at the meme of central banking itself.