Bernanke Saved the Day? Don't Bet on It!

The final verdict is in. The venerable “progressive” Atlantic has spoken. Ben Bernanke and his “radical interventions,” the publication recently claimed, “may have saved the day.” Yet there are doubters out there; I’m one of them.

Unfortunately, one of the main characteristics of modern “progressives” is their smug self-assurance that they are intellectually and morally superior to everyone else, which comes to the fore in the latest magazine’s “Brave Thinkers” piece. The publication boldly (and arrogantly) declares:

For more than 150 years, the Atlantic has told the stories of people who commit acts of moral and intellectual bravery by espousing unpopular or controversial positions. In a special issue of the magazine, the editors have chosen 27 leaders — from business and politics to science and media — who embody this great tradition today. These are people who are risking careers, reputations, and fortunes to advance ideas that upend an established order.

Ironically, the magazine then lists a number of people who only can be considered liberal-left “establishment” people, from Arthur Sulzberger to Ralph Nader. One of those “thinkers” is Ben Bernanke.

Besides claiming that Bernanke’s actions are “radical,” the Atlantic also declares the following:

He dropped target interest rates to near-zero for the first time in history; made trillions of dollars in government cash available to financial institutions; expanded the Fed’s lending and relaxed its collateral requirements; bought up billions of dollars in securities backed by consumer debt and mortgages; prevented the collapse of AIG, Fannie Mae, and Freddie Mac; and somehow found time to bear the made-for-TV harangues of financially illiterate members of Congress. The particulars of the Fed’s interventions remain lamentably shielded from oversight. But in the Great Recession, Bernanke’s forceful approach may have spared the world from a true nightmare. [Emphasis added.]

All of this radicalism can be summed up in one word: inflation. That is correct. Ben Bernanke’s “radical” actions have been nothing more than jacking up the easy-credit regime that brought us into this crisis in the first place. As for the “financially illiterate members of Congress,” the article obviously is referring to Ron Paul and other critics of the Federal Reserve System. Whenever Paul questions Bernanke at committee hearings, the contempt on Bernanke’s face is obvious. Like the editors of the Atlantic, Bernanke’s visage declares: “How dare you, a mere fool, question my greatness. Don’t you see what I have done? I have saved all of you, and you, Mr. Austrian Economics, are ungrateful and utterly ignorant!”

Yet it is Bernanke and his “progressive” supporters who are “financially illiterate.” Literally everything included in that worshipful portrayal is nothing more than the implementation of inflation. The only thing that Bernanke has done is to print money or engage in its equivalent.

Take his “bold” step of “relaxing collateral requirements,” for example. Why is the system in crisis in the first place? It is because the government “encouraged” lenders to relax their own lending requirements, and when the inevitable defaults became systematic, the entire U.S. financial system went into crisis.

In other words, the Atlantic heaps praise on Bernanke for doing the very things that created the financial crisis in the first place. If that is “brave thinking,” then anyone suffering from a hangover who imbibes in the “hair of the dog solution” is a “brave thinker.”

Bernanke did not “save” AIG, GM, and Fannie and Freddie. He nationalized them, turning them into nothing more than dependents of the financial welfare state. The Fed chairman has “saved” nothing; he only has postponed the day of reckoning, and his interventions guarantee that this inevitable day will be worse than it ever needed to be.

Instead of being “brave,” Bernanke has been reckless, just like a young driver playing “chicken.” There is a huge difference between bravery and bravado, and Bernanke’s actions reflect the latter not the former.

Dan Forrest's CD is Available!

A great moment in the history of music, indeed of Western Civilization, has arrived. "Arise, Shine," the new CD from Dan Forrest, Jr., featuring some of his choral works, now is available. While I have not yet received my copy, I have heard snippets he has made available on his website.

I had not heard many of these compositions before, and when I heard them for the first time, I was stunned. As one who has sung and listened to the music of John Rutter for the past 25 years, I can say that Dan Forrest, Jr., is the American answer to Rutter. You simply have to hear this music to appreciate it.

On another note, our church choir sang Dan's "Hymn of Hope" yesterday, and it was a rousing success. Granted, we could not give the piece the same justice as the Bob Jones University choir has done, but nonetheless I was pleased with it, as it is a powerful piece of choral music.

Legal Injustices Continue in North Carolina: Johnny Gaskins

North Carolina is the state that gave us wrongful prosecutions in cases such as the Little Rascals and the Duke Lacrosse Case. It seems that the federal courts in the state have felt left out and so are working overtime to create their own injustices.

First, there was the conviction of Victoria Sprouse in Charlotte, which I have detailed in this post. However, the federal court in Raleigh seems determined to outdo the injustices of the Sprouse case with the wrongful conviction of Johnny Gaskins.

I recently wrote a piece on this conviction, but Ruth Sheehan of the News & Observer has penned what I think is superb commentary. Her point is well-taken: Gaskins has not committed any "crimes," and his actions certainly were understandable, given the harassment the feds have given him. I quote her here:

The feds have been investigating Gaskins for years. He'd successfully defended alleged drug dealers in federal court. So when the feds started poking around Gaskins' finances, they no doubt thought they'd find evidence of money laundering.

They did not.

Instead, they found that Gaskins had earned $355,000 in cash over five years and had filed all the appropriate paperwork on it and had paid his taxes.

But Gaskins had grown paranoid, justifiably or not, over the years. The feds determined that Gaskins, after storing his fortune initially in a home safe (OK, so it wasn't a mattress), was depositing it in increments of just below $10,000 -- the threshold requiring the bank to report the deposits.

That's a reporting threshold that is mainly used to help the IRS track down tax scofflaws. Except, of course, Gaskins had reported all of his earnings on forms that not only included the payments but also the source of the money and who paid it.

"He gave the government more information than the banks ever would," said Dan Boyce, Gaskins' lawyer.

I don't think anyone can say it better.

My hope is that other attorneys in North Carolina stand up and take notice. The government has gone after someone who dared represent clients that the government is trying to put into jail. I suspect that after he convinced a jury not to give the death penalty to someone who had murdered a cop, the prosecutors of the state -- federal and state -- decided it was open season on Gaskins.

As I said in my article, I think that the judge and jury here deserve special blame for this injustice. A jury does not have to do what prosecutors say, and no matter what a judge tells them in his or her charge, a jury is free to decide what it wants.

Unfortunately, jurors decided that a non-crime was a crime. The prosecutors have obtained their revenge, and an innocent man faces what effectively is a life sentence. Way to go, North Carolina! You have done it again!