The Case Against Ben Bernanke

Original Article from Seeking Alpha Editor’s Pick

Daryl Montgomery submits:

Economics is one of the few professions where incompetence is regularly rewarded. The attempt to keep Ben Bernanke as head of the Federal Reserve for a second term is one of the most glaring examples of this practice – and one that will have serious negative repercussions for the United States going forward.

When President Obama announced that he was reappointing Bernanke last August, the reason he gave was that Bernanke "prevented another depression." This sound bite has been mindlessly repeated by politicians – Senate leader Harry Reid most recently – and economically challenged media commentators ever since. Until the U.S. economy returns to its pre-Credit Crisis state, we will not know whether or not that we have been saved from another depression. There is more than enough evidence to indicate that we haven’t been – double digit unemployment, bank loan portfolios that continue to deteriorate, rising bankruptcies and bank failures, lack of lending by the banks and a housing market that only functions because of numerous government programs that prop it up are just a few reasons why this claim is wrong. Obama would not be the first U.S. president to prematurely

call the end to a depression: Herbert Hoover did so in June 1930 when he told the press that the Great Depression was over – it was almost three years before the bottom and at least another decade before that was indeed the case.

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