Tuesday, October 7, 2008
Uncle Ben makes my Starbucks taste bad! We all know Uncle Ben.... Bernake, the Fed chairman. We like to point the finger at greedy corporations, CEOs, and unscrupulous mortgage brokers for the collapse of our economy, but it goes much deeper. These people are just a small part of the much bigger problem.
It began with Alan Greenspan. Greenspan loved low interest rates. He, along with the Federal Reserve put pressure on lending institutions to extend loans to all Americans. Therefore, the ARM and the interest only loans were marketed based on the idea that home values would continue to go up, and so would paychecks. But, Alas! Greenspan is gone and Bernake is here. Bernake was concerned about inflation, therefore interest rates were boosted!
Interest rates went up, home values went down, sub-prime borrowers began to default, banks started losing money on write downs. By the time Bernake caught on, too much money was lost to save the banks, or the economy. Now, even a bail out has not helped.
Is this guy a zero, or what? While they talk about sending CEOs to jail, this guy still has a job! The first thing a new president needs to do is get rid of Uncle Ben.