Tags: Forbes | Bernanke | Supreme | Socialist

Forbes: Bernanke 'Supreme Socialist'

Thursday, 16 Feb 2012 10:13 AM

Federal Reserve Chairman Ben Bernanke is running the economy in such a heavy-handed manner that he more resembles a socialist strongman reminiscent of the Soviet Union than the head of the world's largest and most iconic of capitalist economies, former GOP presidential hopeful and publisher Steve Forbes writes.

By swelling the Fed's balance sheets via massive purchases of Treasurys and mortgage-backed securities from banks and by controlling interest rates and money supply with various monetary policy tools, Bernanke has become a "supreme socialist" who dictates how Americans manage their money.

"Our central bank tries to manipulate our economy in ways befitting a Soviet commissar. Take interest rates. Fixing the price of money is a form of price control, pure and simple," Forbes writes in a column in the magazine that bears his name.
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"Until Ben Bernanke, our central bank was content to fix short-term interest rates, which he announced would be kept at virtually zero through 2014. But in the aftermath of the financial crisis Bernanke is, in effect, dictating the price of all money, regardless of duration."

Bernanke claims his ultra-loose monetary policies, which include keeping interest rates low through 2014, were necessary to steer the economy from the edge of deflationary collapse and to spur job creation.

Critics say the tactics have distorted portions of the economy while sapping the dollar of most of its strength and pushing up inflationary pressures in the process.

"All of this means the government is picking winners and losers. And in this case the losers are savers. Bernanke & Co. want to effectively force Americans to put their cash in riskier assets, such as stocks," Forbes writes.

"You thought socialism was dead, other than in miserable countries such as North Korea and Cuba? Think again. It’s alive and well at the Federal Reserve, and we and the world are paying a price for it."

Bernanke, meanwhile, tells Congress his policies are going nowhere.

Even though unemployment rates are falling, they still remain a big problem for the economy.

The unemployment rate measures the percentage of those who are out of work but are actively looking.

Those workers who have lost their jobs and have given up looking aren't counted as part of the labor force.

Factor them in as well as younger workers entering the work force and the unemployment picture becomes a lot bleaker.

"It's very important to look not just at the unemployment rate, which reflects only people who are actively seeking work," Bernanke told a Senate hearing recently, according to the Associated Press.

"There are also a lot of people who are either out of the labor force because they don't think they can find work. ... There are also a lot of people who are working part-time, and they'd like to be working full-time but they can't find full-time work."

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2012-13-16
Thursday, 16 Feb 2012 10:13 AM
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