Bernanke - no longer a Republican.....

In a bright ballroom of Seattle University, Ben Bernanke and Gary Locke took us back to a darker time, 8 years back when one-half of all mortgages were underwater, unemployment was north of 10 percent, and panic ran amok inside the American financial system. 

It’s a familiar history now – the subprime mortgage scam, the collapse of Lehmann Brothers, the near death of AIG - the world’s biggest insurer of financial deals - the still-debated $700 billion TARP bailout, and a regulatory system that couldn’t keep up with derivatives and other at the edge investment inventions.
Bernanke, director of the Federal Reserve System through all of it, came to the ballroom – interviewed by Locke – to tout his book about America at the edge of ruin (his spin), “The Courage to Act.”

Some moments:

- the subprime mortgage collapse and other events may have set off the financial run, but it was panic – a collapse of belief – that really caused the damage. An economic system depends on confidence; when that’s gone, the lights go out. 

- Lehmann Bros. went down because there was no buyer to save it, and no TARP yet to bail it out – Congress wouldn’t act, telling Bernanke “there’s been no real damage yet.” 

- Bernanke throws a lot of blame on that same Congress for its unwillingness to act on the fiscal side – pushing more $$$ into the economy – while leaving the burden to the Fed’s monetary moves re liquidity. They, he claims, just didn’t do their job. 

- he’s no longer a Republican, describing the party as in the hands now of know-nothings who know nothing about governing.

- asked about dangers to come, he warned that the current recovery still isn’t working for everyone, not with increasing inequality, and fails the basic purpose of an economic system – to produce broad-based benefit.

- asked if he’d seen the film about the near collapse of 2008-2009 - ”Too Big Too Fail” – he said “No, but I like to say that I saw the original………”