also truth

[click image of eclipse shadow]

And what do you think should be done about it?

Don't miss the podcast that accompanies this post....

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And, oh, bullshit:

Bernanke had to 'hold my nose' over bailouts
By JEANNINE AVERSA, AP Economics Writer – Sun Jul 26, 10:34 pm ET

WASHINGTON – Federal Reserve Chairman Ben Bernanke said Sunday that he had to "hold my nose" over last year's taxpayer-financed bailouts of big financial companies but argued that the action had to be taken to avoid a major meltdown of the U.S. financial system and the broader economy.

Bernanke's comments came during a town-hall style meeting in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group, whose collapse would have wreaked havoc on the global economy.

A small-business owner complained to Bernanke that such actions were "hard to swallow," saying he felt like small businesses — also struggling to survive the recession and all the financial fallout — were being shortchanged.

"Nothing made me more frustrated, more angry, than having to intervene" when companies were "taking wild bets," Bernanke said. But not acting would have had grave consequences for the economy, he added.

"I was not going to be the Federal Reserve chairman who presided over the second Great Depression," he said. "I had to hold my nose. ... I'm as disgusted as you are. ... I absolutely understand your frustration."

Public television's Jim Lehrer moderated the one-hour town hall meeting. It will air this week in three installments on PBS' "The NewsHour with Jim Lehrer."

At the height of the financial crisis last fall, Bernanke recalled spending nights on the sofa in his office. It was a "perfect storm," he said, where housing, credit and financial problems converged into a major crisis the likes of which haven't been seen since the 1930s. To deal with the crisis, Bernanke said he sometimes had to do things "outside the box."

The financial crisis underscores the need for Congress to enact legislation that will create a government mechanism for safely unwinding big financial companies, along the lines of the process used by the Federal Deposit Insurance Corp. to handle failing banks, Bernanke said.

When asked about the Fed's diligence in protecting consumers, Bernanke acknowledged that "we were late in addressing the subprime lending problem," referring to the risky mortgages and dubious lending practices that powered the housing boom and contributed to its crash. "We have to take some heat for that."

Still, Bernanke made the case — as he did last week on Capitol Hill — that consumer protection oversight should stay with the Fed. An Obama administration proposal would create a new consumer protection agency overseeing mortgage, credit cards and other financial products, stripping the Fed of some of its duties. Of setting up such a new agency, Bernanke seemed to soften his earlier stance, saying, "I'm neither opposed to it or in favor or it."

When Lehrer said some people think the Fed is the fourth branch of the government, Bernanke responded, "That's a tremendous exaggeration." He said the Fed's independence from political interference in setting interest rates to influence economic activity is crucial. "You get much better results" for the economy when this is the case, he said. "We're very, very sensitive to this issue."

Asked about President Obama's $787 billion stimulus package of tax cuts and increased government spending, Bernanke said most of the money will flow in 2010 so "it might be a little bit early" to judge its effectiveness. Although big budget deficits couldn't be avoided this year and next, given government efforts to help the economy, Bernanke urged Congress to develop a plan now to bring back "fiscal sanity."

On the economy, Bernanke repeated the Fed's forecast that unemployment will probably top 10 percent this year, even as the economy starts growing again in the second half of 2009. The jobless rate is now at a 26-year high of 9.5 percent. In a "few years" the economy will be back on track and "growing strongly again," Bernanke said. "It will take some patience."

The Fed, he said, "has been putting the pedal to the metal" to turn the economy around.

Inflation, meanwhile, will remain "quite low" for the next couple of years, Bernanke said. Given the outlook for a slow recovery, companies won't be in a position to jack up rates or feel inclined to beef up workers' wages, he said.

Bernanke's appearance on the program is part of a broader campaign, unusual for a Fed chairman, to reach out to ordinary Americans. In March, Bernanke granted a rare TV interview, appearing on CBS' "60 Minutes."

"I'm answerable to the American people," Bernanke told the audience at the town hall meeting.

His efforts to explain the Fed's actions to get the economy and financial markets back on firm footing comes as the clock ticks on Bernanke's term as Fed chief. His term expires early next year, and President Barack Obama has not said whether he will be reappointed.

The Fed chief, who took the helm on February 2006, has been on the front lines of efforts to battle the financial crisis and end the recession, the longest since World War II.

His aggressive and unconventional actions — including supporting the bailout of AIG to the tune of more than $180 billion — have been credited with averting a financial catastrophe last year but also have touched off anger from the public and lawmakers on Capitol Hill about helping financial companies that made reckless gambles.

They weren't "reckless gambles". It was a crime spree, and the bailout is part of it. Obama did not start it, but he reversed himself in the Senate to vote for it and to encourage everyone else to vote for it, and he's as brilliantly mismanaging it as they ever could have hoped for. Avid for the post as she was, Hillary couldn't possibly have pulled it off this smoothly.

I don't think we can even be thankful that neither she nor McCain made it... even though we'd probably already be in WWIII with either of them in the White House, because all this White House is doing is finessing it... making us look better before we do it.

If you can tell me how these evil bastards are going to handle this, short of WWIII, I'd welcome your input....

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Watch Kucinich talking to SIGTARP....