Enough with the Bernanke bashing

Within the confines of a totally dysfunctional government, the Fed chief has done what he can.

By Jim Cramer Sep 4, 2012 8:59AM

TheStreet.comEnough Bernanke bashing already. I am sick of it, just sick of it. Let me ask you a simple question: What have the other central bankers done right that makes him seem like such a dope to so many of you?

 

Sure, the Fed chief was slow to recognize the housing bubble that was created by his predecessor's attempts to stoke the economy after the burst dot-com bubble that his predecessor created by never raising margin rates. Sure, he should have cut to the bone in 2008, but commodity inflation was raging.

 

Since then, Bernanke has done his best to get housing restarted -- working; keep retail afloat -- working; and generate some construction of late. This is all within the confines of a totally dysfunctional government that includes the worst partisanship since the Civil War. Does everyone blame him for that, too?

 

Have you ever listened to Congress when it badgers this man? It's insane. Its members know so little that it is a wonder he even stays on the job.

 

In the interim, what have his colleagues done? Let's see, last year, former European Central Bank President John Claude Trichet raised rates twice. That was brilliant! That nailed inflation in its tracks, didn't it? That has to be the dumbest policy move of the decade. The ECB still has not come to grips with its crisis the way much-derided Bernanke has. We would really be calling for those guys' heads. As it is, we had to listen to a totally wrong Fed president from St. Louis, who advocated tightening here at the same time Trichet wanted it.

 

Is that what the Bernanke bashers want? A little solid tightening?

 

How about the Indians? They've done a bang-up job of slowing growth while stoking inflation. Bravo. Much better than Bernanke, no?

 

And let's deal with the Chinese, those so-called brilliant businessmen. Here you have a command economy, no GOP-Democrat fratricide there. They were supposed to have everything figured out. They have nothing figured out other than they know to dump goods into Europe and Europe ain't taking them anymore. That's the real cause of their problems. Is their central bank filled with genius? I prefer Lenin's New Economic Policy. Now, there was a central banker-cum-dictator who knew how to get the job done with maximum slaughter.

 

So I say enough of this already. Bernanke has done what he can. This is all on Congress and President Barack Obama. And if you want the world's economy jump-started, I think the German Supreme Court is more important than Bernanke.

 

Lay off him. That's an order.

 

Random musings: I'm thinking Facebook (FB) is really losing out to Twitter in part because of the latter's mobile apps. I like using Twitter more on mobile than on the desktop, in part because Facebook is trying to trick you into clicking on ads, which makes it so younger people will leave in droves. I liked Facebook as long as the migration from desktop to mobile was slow, and I was counting on that. But it turned out to be lightening-like, and that's why the numbers are slowing so badly. Happened on a dime, right around when Peter Thiel put in his sell order. Remember, as I wrote at the end of "Confessions of a Street Addict," it is better to be lucky than to be good. It was dumb luck that caused the sell program to be entered just when the desktop faded and mobile took off, wasn't it? Wasn't it?

 

Jim Cramer 

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust has no positions in the stocks mentioned.

 

 

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109Comments
Sep 5, 2012 9:27AM
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Pam, Pam, Pam.  What is wrong with you?  You have a problem, read the follow up I did if that is not to much for you to handle.  Listen anyone who likes a Socialist Card Carrying guy who has the title of President could not find their **** with both hands.
Sep 5, 2012 1:42AM
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In a healthy economy interest should be 5 - 10%.  Keeping the rates under that is just an attempt by our Gov't to avoid paying the fiddler.  Now, there is little incentive to save.  When rates rise to where they should be, our gov't will not be able to make its payments without rampant money-printing and an inflationary spiral.  They should have never lowered rates in the first place, should have let the bad banks and unprofitable auto companies fail, and should have let the cards fall where they may.  We would be a lot better off when the smoke clears, in spite of some teeth knashing in the interim, IMO.
Sep 4, 2012 5:18PM
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Bernanke doesn´t understand the real effect of negative interest rates on the investors´end. It weakens the economy by suppressing income for savers. On the other side, borrowers don´t get those low financial costs, because of credit ratings and bank monopolies. Monetary policy is not linear, that´s why his theories are mistaken.
Sep 4, 2012 5:16PM
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Message to Ben Bernanke... how do you slow down or stimulate: dead? 90% of America isn't in a good financial position because the other 10% caused, controlled or manipulated them into this condition. If the Fed manages our money, what the Hell is he doing giving it to financiers? Where is our economy, Ben? Pull it back from grubbers and redeploy it so we can recover.

Close the banks. End the Federal Reserve. Get rid of Wall Street. If we aren't 100% invested in job RECOVERY now, we won't be here by the New Year. 
Sep 4, 2012 4:44PM
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If the FED were to be graded on providing economic stability and preventing boom and bust cycles (that's their mandate isn't it?), they would receive a big F from the teacher. It seems that every time a bubble is created and subsequently bursts, the middle class develops a massive hole in its pocket that leaks wealth at an astounding pace moving to deeper pockets.

 

Does Bernanke deserve a dunce cap or an atta boy? It depends on who sets the goals and it ain't you and me.

 

 

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Cramer if you knew how much fake money Bernanke has printed up and given to crooks off balance sheet you would call for Bernanke to be put in jail.

 

Look the Federal Reserve is as crooked as they get.

 

Why do you think it's totally illegal for anyone to look at their books??

 

Even Congress can not look at their books.

 

If they were running things on the up and up they would welcome people looking at their books.

 

 

Sep 4, 2012 4:24PM
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For those of you who agree with this guy, that Bernanke is only doing what he must, I hope that you live long enough to endure the inflationary consequnces of his actions.  Greenspan started it and Bernanke has made an even greater mess.  And neither of these bozos was elected but rather appointed by both politican parties.  So what does that tell you??  Let's see the arguments again on why one party is so much better than the other, shall we?

 

We need controls on how much money the Fed is allowed to print or otherwise release into the economy.   It used to be the gold supply and now it is a dysfunctional political system that would rather print than solve. 

 

Personally I plan to vote against the incumbents and for the independents every chance I get.  I think this is the only hope, albeit slim,  for avoiding total catastrophe.  We have to start breaking up what created the mess in the first place.

Sep 4, 2012 3:54PM
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We made our own bed by borrowing more than we can pay back.  Nations lose their independence and respect when they borrow from other nations.  We have not been good stewards with our money; I'm not sure anything can be done to correct that mistake.  I guess a combination of cutting spending and cutting taxes and keeping the rates low will help over time.
Sep 4, 2012 3:51PM
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Facebook is losing out to Twitter because Twitter doesn't sell private information to advertising companies.

That and anybody with a brain cell could have seen that the Facebook stock was both over-hyped and overpriced. FB stocks are better off as penny stocks. Even that is too much.

Sep 4, 2012 3:46PM
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@next time up,
Agree with your posts totally,
Re: Interest rates, your absolutely right that there is a sweet spot for interest rates. While most people understand that when rates are to high, investment is stifled because it's to hard to to achieve a  reasonable (if any) R.O.I.. HOWEVER when interest rates are to low, it seems as if there is no way to NOT have a R.O.I and so investment turns into gambling rather than investment and one Ponzi scheme after another is born. The other point that I would posit in relation to artificially low interest rates is that those rates are below inflation and are thus unsustainable as well as hiding the true inflation rate. There is another bubble inflating quickly, and it is these cheap interest loans being made by the Fed. What happens when these short term loans go to real interest rates? We know the answer to that. Just look at the housing bubble when all those "exotic" mortgages and teaser ARMS came due. Can you say POP GOES THE WEASEL? Good I new you could.

Sep 4, 2012 3:43PM
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My grandfather once told me that a snake was neither good or bad, it was just  a snake and snakes do what snakes do.  BB is neither good or bad, he is just doing what he is supposed to do, keep the banking system rolling.   

 

Our system only works when the money supply is growing and moving.  The FED does the best it can to make it do that. That's why the rates are so low right now.  They want to discourage saving and keep as much money moving as possible.  Low rates also allow banks to loan more money into existence which feeds into the ponzi scheme we've been born into.  You can argue that he or his predecessor should have seen the housing bubble coming......come on...Really?   They created it for Pete's sake.  They are smart people.  Since our last real producer of wealth, manufacturing, was allowed to move overseas, they had to have another vehicle to keep the ball rolling.  (Remember, when our shark economy quits swimming, it dies).   So they lowered rates so poor credit risks could buy houses and good credit risks could buy more house than they needed.  Housing inflates but what the heck, we're still creating money so the shark swims again.  At some point it has to pop because there aren't enough real wealth producing activities to cover the debt created by all these loans.  Once everyone has a McMansion, they just don't appreciate like they used to.

 

Strictly speaking, if BB is at fault it is for not having another developing bubble in place to keep the money supply growing and give the illusion of prosperity.  QE's are just cheating.    

 

So I can't argue that BB is good or bad, he is just doing what a central banker does.  The real question you should be asking yourself is if you agree with the system.   I think it sucks. 

Sep 4, 2012 3:37PM
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You know if Cramer says so----it must be?? Joking of course.
Sep 4, 2012 3:33PM
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Between the Fed , Wall Street( Crooks ) , analysts( Crooks ) , money managers AND Bankers ( The worst CROOKS ) . You Guys are all to blame and you have your jobs , while Hardworking Americans are loosing Jobs . So off course HE and the rest of people mentioned above are to blame , who else ?  
Sep 4, 2012 3:01PM
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1. When are they going to learn how to filter out the spam on these comments?
2. The Republicants and their crooked cronies in the multinationals, banks and Wall Street are screwing all of us over.  The French had a solution about 200 or so years ago.  Unfortunately, it didn't solve all their problems.
3. Why does it seem like the Fall of the Roman Empire?

Sep 4, 2012 2:57PM
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Look Cramer you bone head you just made are point for us. He didnt recognize the housing bubble??? Are you freaking nuts?
Sep 4, 2012 2:44PM
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I recall Greenspan sitting in front of the banking commitee praising the benefits of new loan instruments; zero down, variable rates, etc., and talking of the benfits individuals and the industry were about to gain.  And then the nightmare ensued.   And if one person thinks for one Iota we have paid the price even yet for this mess please sit down.  What a mess and we should leave Bernanke alone.  Perhaps if he came clean and actually told us how much has been loaned out around the world things would then change eh Jim.  So Jim do you really think we know enough about what the Fed is up to to give Bernanke a pass?  I say both common sense and business sense say we need to wait and see before we even think about letting this man pass!
Sep 4, 2012 2:36PM
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"Let me ask you a simple question: What have the other central bankers done right that makes him seem like such a dope to so many of you?"

Allow me. As Fed Chief, it was Ben's job upon installation to establish the work that preceded his arrival. That was easy to deduce... cheap money, lax regulations to total deregulation and housing in obvious hyper-appreciation fortified by terrible lending criteria and literally without diligence. Enough prognostication existed to suggest that big business was going to terminate personnel and bet heavily on Europe failing with America prevailing. The Fed's role was to establish whether it's own member banks could withstand economic slowdown and sustain if sharp shifts occurred in credit and savings. His banks were not only weak but vulnerable too. Every indicator suggested that Dubya's money printing and increases in the Debt Ceiling had aligned us with the same scenario leading to and during the French Revolution. Ben is touted as a student of the Great Depression. Did he not bother to review Andrew Dickson White and prior depressions or grasp what business manipulation did to America in 1905? In short, Ben said "bring it on", it came and he stepped in the same crap other scholars have, who lacked any REAL exposure to bank corruption. Ben bought assets he had no business doing and he set the Bank Rate so low that banks could borrow from the Fed and buy their own debt notes for a yield profit! Where are we because of Ben? There are Trillions buried in Euro Debt instruments we will never see again. Banks set up massive facilities for big businesses that have no assets personnel or factories, who expose us to national security threats by having product made and imported overseas. Not ONE Fed Member Bank is actually solvent and NONE are connected to America through common People. In short, Ben Bernanke is the greatest CRIMINAL America has ever known and still is. We will we going to war soon. Financial people who refuse to stop destroying America will be destroyed. Businesses that don't fire every hired-in executive and go find ALL it's prior workforce will be destroyed. We will literally be the epicenter for World War III over greed. Think I'm going overboard, Jim? I didn't go to Harvard, I worked Main Street across America. My employer was taken out by the Gramm Leach Bliley Act of Terrorism in 1999 and I scrambled to work in subordinate roles to absolute fools at banks until 2008. Since then, we've endured EXACTLY what I said we would and I am not wrong about the future. How idiotic is it that Ben Bernanke doesn't fire Yellin and get the likes of Dimon off his Board. The Bank Rate has to be hiked and his banks be told to FIX the ONLY lending rate at 12% in order to force them into quality Risk models that actually perform for profit. He needs to claw back debasing dollars to restore the value of those sitting on the sidelines and crush corrupt speculators. He needs to get billions to Main Street directly, help us build direct competitors to banks, businesses and the ancillary aspects like utility and fuel, to purge the bloated ancient fools who anchor us to the 20th century. If I were one of his advisers, it would be my daily pleasure to devise a way to give some hoarder diarrhea from a direct degradation of the cash in his vault. It's currency, not the fodder for New World Order. It's what makes America tick. Ben has two months left. If we approach elections without corrections, there will be anger like none of us have ever known. You took the role, Ben... I think you're too smart in all the wrong ways, and not smart enough to look out your own window, or reach out to someone like me for help. I'm right here. What's the matter, trouble managing the laptop?
Sep 4, 2012 2:33PM
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Brokers, Bankers, Insurance and Real Estate all make billions off the housing market, squeezing every bit of value through asset manipulation.  The money they stole came out of our collective savings, including your stocks, bonds and the value of your property.

 

The obstructionists in Congress (I am looking at YOU, Republicans) made this all worse.  First, the regulations that created stable markets (Glass-Segalman) were gutted, permitting big investors to borrow from the value of OUR banks and brokerage accounts and the bet on bundled securities.

 

Then, a few years later, after the crisis caused by deregulation led to the housing crash, the same Republicans blocked stern regulation of the same corporations that stole our savings in the first place.

 

These idiots do not understand macroeconomics.  They should not be permitted to further rob the citizens of America by continuing to obstruct reasonable stimulus and responsible regulations.

 

Vote these Republican idiots out of Congress.  They are in the pocket of the people who ruined our savings accounts, our retirement accounts, and our homes' value.

 

It is, more than any other single factor, Congress that has ruined the economy.  Blaming the Federal reserve is simply parroting the ignorance of the people who robbed us in the first place!

Sep 4, 2012 2:31PM
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OMG!!! I recently found a dating site for men called MSNBC SUCKS DOT COM. Will they ever filter out all of the spam on this blog? Ever?

Sep 4, 2012 2:29PM
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Don't forget that the biggest idiot besides the last President was the last head of the Federal Reserve, Allen Greenspan, who should be fined and imprisoned for his incompetence. Greenspan, with no oversight from "I believe in less government Bush," was able to completely miss the collapse of the Berlin Wall, the Fall of the Soviet Union, the Dot-Com Internet crash, the Real Estate bubble and the reasoning behind all of the flash crashes. Bernanke succeeded in doubling everyone's 401k from the abyss and restoring the collapsed banking system which was another bubble Greenspan missed. Remember how famous he was for mumbling something incoherent while the market just assumed it was good? Those wall street psychics are all broke and out of work now. Their only claim to having any wealth left is managing their "charitable trusts." OMG, Cramer is that you?

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