John McCain: Economy Is 'Bleeding' Thanks to Bernanke, Dimon

Friday, 12 Oct 2012 09:32 AM

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The U.S. economy is bleeding thanks to the interest of big Wall Street banks and policymakers like Federal Reserve Chairman Ben Bernanke who cater to them, said Sen. John McCain, R-Ariz.

JPMorgan Chase CEO Jamie Dimon said recently he did the Federal Reserve “a favor” by agreeing to take over troubled Bear Stearns during the 2008 financial crisis that ended with the government bailing the sector out.

“I don’t owe Mr. Dimon anything,” McCain told CNBC.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

“Mr. Dimon has done very well, as have major financial institutions, and the American people are very unhappy and dissatisfied with it, as they should be.”

Meanwhile, McCain said he wasn’t sure he would support Bernanke for another term in light of the U.S. central bank’s decision to pump trillions of dollars into the financial system by buying mortgage debt and Treasury holdings held by banks.

The monetary stimulus tool, known as quantitative easing, aims to spur recovery via pushing down borrowing costs and encourage more investing.

“I’d have to think about it. … But I’m very unhappy with his performance and what’s happened to the economy when he’s announced all these measures and all the easy money. Who gets the benefit of the easy money? The big businesses on Wall Street,” McCain said.

Meanwhile, policymakers must find ways to pay off the country’s $16 trillion debt, and partisan bickering over such fiscal reforms needs to end.

“We need to sit down all of us with our president and say, this is our deficit, this is our goal, here is the period of time that we have in order to fix it and here are the measures that have to be on the table,” he said.

“Whether we agree or disagree on the measures needed. We’ve got to stop the bleeding, and that means putting everything on the table.”

Dimon, meanwhile, lashed out against a lawsuit filed against the bank for alleged misdeeds that took place at Bear Stearns before JPMorgan took it over.

New York Attorney General Eric Schneiderman recently filed a civil fraud lawsuit against JPMorgan concerning securities sold by Bear Stearns, which JPMorgan bought in 2008.

The suit claims that Bear Stearns failed to ensure the quality of loans forming part of mortgage-backed securities it sold in 2006 and 2007.

“I’m going to say we’ve lost $5 billion to $10 billion on various things related to Bear Stearns now. And yes, I put it in the unfair category,” Dimon said, speaking at a Council on Foreign Relations event in Washington, according to Reuters.

“We didn’t participate with the Federal Reserve, OK?” he added.

“Let’s get this one exactly right. We were asked to do it. We did it at great risk to ourselves ... Would I have done Bear Stearns again knowing what I know today? It’s real close.”

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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