Skip to comments.Paul Ryan Bashes Bernanke For Killing Savings, Distorting Markets
Posted on 02/02/2012 9:37:14 AM PST by Hunton Peck
In a fascinating exchange between Federal Reserve Chairman Ben Bernanke and Congressman Paul Ryan, the Republican from Wisconsin accused the Fed of eroding peoples savings, creating a false sense of security by manipulating the yield curve, and bailing people out by indirectly engaging in fiscal policy.
Bernanke hasnt been comfortable the last couple of times he was forced to testify in Congress. On Thursday, the Fed Chairman was questioned by the House Budget Committee on the state of the economy.
After giving his usual description of the economic outlook (inflation has remained moderate, unemployment is high, Fed will do whatever it can to keep the modest recovery on track), Bernanke faced the sharp tongue of Paul Ryan, Chairman of the House Budget Committee.
More than questioning him, Ryan expressed his concern that Fed policy would cause more harm than good. Ryan told Bernanke the Fed was too loose for too long, effectively causing a dislocation of capital that led to the real estate bubble and subsequent financial crisis.
Ryan said he felt fear that because Bernanke denied the Fed was responsible for the crisis, via ultra low interest rates for too long, his current policy mix could cause economic disruptions to a possibly catastrophic magnitude.
The exchange was essentially a Paul Ryan monologue, Bernanke answered most questions as he did reporters questions in last weeks post-FOMC press conference. Regarding the effects of quantitative easing on savers, Bernanke acknowledged that flattening the yield curve eroded savings and caused hardship on some, but noted a weak economy was even more dangerous.
Ryan also accused Bernanke of putting a cap on price discovery and creating a false sense of security by keeping rates low. While a reasonable argument, Bernanke debunked it by citing the case of European PIIGS...
(Excerpt) Read more at forbes.com ...
Draft Paul Ryan for President
Good one Paul! This economist said the same thing ... with charts backing it up!
What a load of crap! Investors lost confidence in the PIIGS because of their debt; it's unsustainable.
I can't believe Forbes would allow such a flimsy "rebuttal"
The Federal Reserve is the cornerstone of Progressive plans for government. Remove it, and the likes of Obama could not exist.
That will not compute with Bernanke. Keynesians believe markets are prone to failure without government intervention and that saving is a "leakage" from the spending stream.
Odd but true!
Couldn’t a higher savings rate improve banks’ deposits, and therefore likely loosen lending a bit and have a greater effect on the credit markets than artificially low rates?
Ryan seems to be the only one who understand that low interest rates are killin America’s savers.
pffft! They all sit up there and point fingers and say stuff but not much good ever comes of it.
I have lost faith in most all of our gov’t.
Let me know when they actually stop something or reverse it.
DeMint running a glass of water for Romney is it for me.
I can’t even count on crazy Uncle Ron Paul, I read even HE is slinkin’ around with Romney behind the scenes!
Go Newt..if he doesn’t make it, I am thinkin’ our goose is cooked.
You are crazy if you are a saver in this economy. Inflation, real inflation is running at what 5% but saving accounts are paying 0% so every year you lose 5% (at least) of your money. Crazy.
We have the two or three guys that are going to end up being our nominees. Two of them are deeply flawed candidates. I am not happy about my choices; but, they are my choices and whoever gets the nomination will get my vote because my prime reason for voting this year is to get Obama out of there.
I agree it’s crazy. So what do you do with a lifetime of savings.
Buy a Volt? /s/
” - - - Ryan expressed his concern that Fed policy would cause more harm than good.”
After only 3 years, super intellect Paul Ryan reaches a partial conclusion - - - .
Way to keep the Obama Recession on the wrong track!!!!!!!!!!!!!!!!!!!!!!
Ryan just tweeted that he will be on CNBC today at 3:25 ET to talk about today’s hearing.
Yes, it could and would. But, as I said, the dominant school of economics in this country believes that spending drives the economy and that saving decreases that spending. It's absolute nonsense because money saved is loaned out and spent by others -- it does not sit idle.
But it's what they claim to believe and, at the moment, they are in power.
Thanks for the hot links.
It is truly baffling to me why it has taken Ryan 3 YEARS to say that there is a problem.
It is also baffling to me why Ryan does not insist on Bernanke’s immediate resignation.
BTW, could it possibly be that the Ryan brain freeze is proof that he is really a RINO?
We, in Wisconsin, have been trying to get Paul Ryan to run for higher office for years. He won’t budge. He has a wife and small children, and I believe that his life has been threatened. He also feels that he is in his proper niche as chair of the budget committee in the House. Maybe in the future.
If the problem in question is quantitative easing, he addressed that at least as early as 2010, after the last round of it, in this column: Refocus The Fed On Price Stability Instead Of Bailing Out Fiscal Policy. The round currently under discussion is, I believe, the first since Ryan assumed the chairmanship of the budget committee.
As to why he hasn't called for Bernanke's resignation, I can't say. Maybe he doesn't think that just changing the name on the Chairman's door would help get the Fed out of the fiscal policy arena.
Some problems are obvious by inspection. Others take some degree of fact-finding investigation. Ryan has chosen to simply jawbone for THREE YEARS! That is the problem: all talk and no action!
For example, after Porky Pelosi’s Pork-Barrel Bill in early 2009, the 6 month data available revealed that it was a failure. TARP money was never spent on what Congress mandated it be used for. Trillions and Trillions of Dollars later Ryan is still chattering away, scolding and caving-in to every “deal” the Democrats dream up.
Ryan has not been silent, he just is all talk and no action. A RINO to the core!