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Quack, Quack

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The attention span of the American public-never great to begin with unless a story has to do with the death or scandal of a celebrity like Michael Jackson, in which case the appetite is insatiable-is giving public figures a freer and freer ride as time goes by.

One area in which this is becoming increasingly obvious is politicians’ blatant attempt to rewrite history even as they are making it.  A choice example is Sarah Palin stating that she was not a quitter even as she was resigning as Alaska’s governor with about a year-and-a-half to go in her first term.  Yes, of course, she was going to fight the good fight elsewhere, and so therefore she could not be accused of quitting.

Now, even if everything is relative, there is still the duck test that must be passed.  And here, I’m afraid, the now ex-governor couldn’t upend the fact that her resignation looked like a duck, walked like a duck and quacked like a duck.  She quit.

Which brings me to a figure closer to the concerns of insurance people, and that is Fed Chairman Ben Bernanke, who is rewriting history with assiduity.  Many people now believe that the Fed not only did very little, if anything at all, to protect consumers in the lead up to the Great Recession, but that the Fed was the prime enabler of many of the situations that nearly sank us.  In some ways, many now believe, the Fed was the three see-no-evil, hear-no-evil, speak-no-evil monkeys all wrapped up in one.

Out of control risky investments by banks, investment banks and other firms too big to fail?  Where was the Fed?

Out of control mortgage business rife with abuse and outright fraud?  Where was the Fed?

Credit card abuses by banks that have fleeced and victimized countless consumers?  Where was the Fed?

 Of course, many of these situations started before Bernanke took office in 2006.  His predecessor, Alan Greenspan of the now shrunken reputation as the financial wizard of all time, laid the groundwork for the catastrophe to come.  But Bernanke did his share of turning a blind eye too.

So now, when the Fed is being faced with legislative moves to trim its sails somewhat and the administration is pushing to create a federal consumer protection agency, the Fed is taking the line that it is the agency in the best position to protect consumers in the areas of mortgages, credit cards, etc.

Never mind that the Fed was seen to be too cozy with the banks for which it was the regulator and that this coziness was a prime contributor to the unprecedented risks that some of the largest banking institutions in the country undertook. 

The way the Fed’s reasoning goes now, as articulated by Bernanke in the dog and pony show he is conducting across the country and on the airwaves, is that because the Fed knows banks and is responsible for protecting banks, it is in the best position of any agency to protect the consumers who depend on banks.  There’s no conflict.

I think it takes a lot of nerve for the top Fed official to say that there is no conflict here when we are continuing to slog through the detritus that this very conflict wrought.

Bernanke’s actions may indeed have  pulled us back from the brink last fall, but I think it is fair to say that we would not have gotten to that brink if the Fed had been more insistent on being the regulator it was supposed to be than the cheerleader that so many perceived it to be.

Saying you’re best qualified to protect consumers when the evidence shows you didn’t is like saying you’re not quitting when that’s what you did. 

What do you say, ducky?  

Quack, quack.  I thought so.


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