The Reasoned Review

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Whitewashing Bernanke’s Involvement in the Crisis

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Dean Baker gets an excellent catch in what, upon first glance, I thought to be rather solid Washington Post article. Quality from the Post is such a rare beast that I think you’ll forgive me for the mistake. It’s like a guy who gets excited over a bigfoot sighting, but it just turns out to be some hairy guy.

As you probably know, President Obama has hundreds of positions left unfilled within his administration. This is partly due to his not getting around to them, but in large part also due to “Republican” obstructionism, wherein certain senators have placed holds on several key appointments, tossing them into the bureaucratic abyss.

The Post article purports to be about three major posts that Obama has yet to fill in the Federal Reserve and the candidates who may fill them. Now, I’m all for calling attention to Obama’s unfilled administrative positions. They’re a major bottleneck in the bureaucracy and are causing his administration to move sluggishly on matters that urgently need attention – ironically, Federal Reserve issues. It looks as though he’s finally going to bite the bullet and make these appointments during Congress’ recess, which he should have done all along.

So far, so good – it’s all newsworthy. But was it really necessary for The Post to inject yet another ode to Fed Chief Ben Bernanke in its already too-long article? We know how they feel about Bernanke – they’re all for him. If anyone doubts it, I invite you to visit their editorial page. On any given day I guarantee you’ll find some apology for Mr. Bernanke’s malfeasance from one of their establishment cheerleaders.

The phrase in question describes Mr. Bernanke as having “led efforts to make the Fed’s bank oversight more effective and focused on broad risks to the economy that arise out of banks’ decisions.

Not only is that so vague as to be rendered meaningless, but it is also patently untrue.  “More effective”? “Broad risks”? “Bank’s decisions”? How effective? What risks? Which decisions? These are mistakes one goes over in Reporting 101.

They’re sloppy mistakes, too – and they betray a complete vacuum where the writer’s knowledge of history should be. Aside for Lawrence Summers (current National Economic Adviser, who authored the bill that got us into this mess), Timothy Geithner (current Treasury Secretary, who was #3 at the Fed while the banks turned into casinos), and, of course, Alan Greenspan, Mr. Bernanke is the single biggest reason why 1/4 of the workforce is desperately seeking work.

He actively campaigned against oversight, was completely blind to the risks facing our economy (“The subprime mess is largely contained“), and, in fact, actively encouraged those risks by keeping interest rates at almost zero for three straight years after the dot-com bust. This is a matter of public record. A five minute Google search and articles from The Post itself were enough to reveal this.

What’s worrying is that The Post seems to be unaware of this – or if they are aware, put a willfully misleading clause in their “news” article. I can understand it when journalists lie in the Op-Ed pages; that is, after all, what they’re for. But to put a factually ignorant opinion in a serious news article betrays, I think, some very perverse ethics.

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