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Ben Bernanke was recently confirmed by the United States Senate for a second term as chairman of the Federal Reserve Board. While 30 senators opposed the Bernanke nomination the fact that he was reappointed indicates that in Ben Bernanke we trust. After all, the man has the second most powerful job in the world at a time when the US and the global economy are suffering the worst economic downward spiral since the Great Depression. The decisions that he and the Federal Reserve Bank makes will be crucial to restoring economic growth for the US economy.

However, when one looks at the poor Bernanke track record throughout the various financial crisis that occurred during his first term in office one has to wonder why in the world the man’s judgment could still be trusted. While he appears to be a sincere enough and nice enough guy, as shown in the video, he has consistently been wrong in his judgment as to the status of the US economy.

While regarded as to be an expert as to why the United States entered into a Great Depression and in how the nation was restored to economic growth Bernanke seems to have a simplistic view as to exactly how the economy works. He appears to think that the economy works as some type of mechanical machine. All one has to do to keep it running smoothly is to pull a couple of levers here and push a handful of levers there. Apparently he thinks that market forces can be overcome by fine tuning the machine.

While Bernanke acted aggressively and quickly once the economy began to fall apart in the course of the latter part of 2007, as you will observe in the video, he had totally no clue that bubbles were being formed in the real estate market as well as in equities that would soon pop with devastating results. Unfortunately, I fear that we will soon observe that the actions of the Federal Reserve Bank, as led by helicopter Ben, may have helped early on to stabilize the economy the actions will have disastrous long-term effects.

For one thing under his leadership the Federal Reserve Bank engaged in a “cash for trash” program that extended credit to favored banks and institutions, such as AIG, in trade for toxic assets of questionable value. The strength of the Federal Reserve’s balance sheet had to be seriously impaired due to this and other actions initiated by Bernanke.

All one has to do is to view the video to see how truly clueless Bernanke was during his first term as chairman. However, the president and the Senate appear to still be confident that he is a man that we can trust to help guide the nation out of the economic wilderness. Based upon his track record so far, the question is why?

What do you think? Is Bernanke the right man for a most difficult job? Does he have the judgement to know exactly when it is safe to start withdrawing the massive economic life support system established by the FED on his watch?

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