Tags: Stockman | Bernanke | Fed | arsonist

David Stockman: Bernanke Resembles ‘Arsonist Lecturing on Fire Prevention’

By    |   Tuesday, 07 February 2012 07:49 AM

David Stockman, a former congressman and budget director for President Ronald Reagan, isn’t too impressed with Ben Bernanke’s stewardship of the Federal Reserve.

Specifically he’s upset with the Fed’s accommodative monetary policy and Bernanke’s suggestion that Congress cut the budget deficit, but not too quickly in light of the economy’s weakness.

“Bernanke testifying on the budget is about as credible as an arsonist lecturing on fire prevention,” Stockman tells Yahoo.

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“They’ve crushed interest rates, they’ve flattened the yield curve, they’ve made financing the deficit almost pain free. When you do that, you totally eviscerate any resolve on Capitol Hill to face down this monster.”

Congress won’t act on cutting the deficit unless it fears the consequences of not acting, Stockman says. “If you’ve got the Fed chairman saying interest rates will be zero through 2014, why is anyone going to worry?”

Bernanke has put the economy at risk, Stockman says. “We have a central bank run by a Keynesian who thinks you can print your way to prosperity. That’s why we’re in such trouble and why the Bernanke Fed is a clear and present danger for any hope of economic recovery.”

Plenty of economists agree with Stockman, but plenty don’t as well. One who doesn’t is Nobel laureate economist Paul Krugman.

“Policy makers should be doing everything they can to get us back to full employment as soon as possible,” he writes in The New York Times.

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