- Last Updated: 12:20 AM, June 24, 2012
- Posted: 11:00 PM, June 23, 2012
Well, I guess the American public can figure out why Fed chief Ben Bernanke called it Operation Twist — because they got screwed.
Average, hard-working Americans are facing very difficult — and, in many cases, dire — economic circumstances.
This month’s very disturbing job report stated that we only produced 69,000 jobs in May. In a nation of more than 300 million, that’s horrendous. But add to that zero interest rates and a Fed balance sheet of $3 trillion, and that just makes it even worse.
At the very least, it should be an outright embarrassment to all involved: the Obama administration, the Federal Reserve and all those who serve in Congress.
According to Bernanke himself in a February speech, home prices have plunged a whopping 40 percent in the last three years. And, tragically, home valuations remain at those depressed levels today.
Median household net worth has dropped some 39 percent since 2009 as well — almost exactly the same amount. Hmm . . . think there could be a correlation there?
This all happened while Ben and his Board of Bungling Bank Buddies were doing all of their bureaucratic operations.
The real BENeficiaries of all this?
Well, bank profits are up sharply from three years ago. And, by the way, the federal government’s already bloated balance sheet has been easier to artificially finance with the Fed’s easy borrowing for the banks.
Talk about rewarding bad behavior! Where’s the wariness of moral hazard in propping up Too Big to Fails?
The average American with $15,000 in the bank, $60,000 in his 401(k) and a house he paid $200,000 for can’t even earn a real rate of return or yield on his savings.
And if you add in all the new banking fees, the returns are actually negative!
Twisting savers into a corner hasn’t helped housing or job growth yet. Twisting a little harder and longer ain’t gonna do it, either.
The simple truth: It is the Fed’s primary job to do right by its citizens. If that requires admonishing a few politicians along the way for poorly constructed economic plans — or, worse yet, economically constrictive regulations — then so be it. Just do it without political favoritism.
The problem with this economy is not the cost of credit for banks. It’s the accessibility of it for average, hard-working Americans.