Ben Bernanke: Wall Street's servant

[CHIMO]

Last week, the Fed announced that it would use the proceeds from retired mortgage-backed securities to buy up more government bonds. This may have a very modest effect in keeping long-term interest rates low, thereby giving a small boost to the economy.

Such a measure would be reasonable if the economy was basically fine and just in need of a modest lift. But this is not the case.

The unemployment rate is 9.5% and virtually certain to rise in the 2nd half of the year. Job growth has basically stopped and GDP is likely to be in the range of 1-2% in the next four quarters, as state and local governments cut back spending, the stimulus phases down and the housing market resumes its slide.

The country badly needs a central bank that is independent of Wall Street, where its governors can do what they believe is best for the economy and the country. Unfortunately, we do not have such a Fed. Until Congress and the public start putting heat on Bernanke for his policy failures, we can expect to get kicked in the face again and again.
http://www.guardian.co.uk/commentisfree/cifamerica/2010/aug/16/ben-bernanke-banks-unemployment