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To: 1010RD; sickoflibs
Politics makes Bernanke wrong. Schiff has no similar encumbrance.

I am guessing that you mean that Bernanke, although his job is not supposed to be political, has nonetheless an unspoken political obligation to say optimistic things about the economy. In a sense, Bernanke would have been swimming against the current if he had been less optimistic (Bush and McCain: the economy is "fundamentally sound").

In fact, one could argue that a FED chairman who is too pessimistic would do some psychological damage to both "consumer confidence" and the "morale" of business investors. However, there is obviously a downside if a FED chairman is "irrationally exuberant."

My concern with Bernanke goes beyond the question of optimism though. How much arm twisting was applied to Bank of America to "convince" it to buy Merrill, warts and all?

12 posted on 08/03/2009 6:40:27 AM PDT by ding_dong_daddy_from_dumas (Obama's multi- trillion dollar agenda would be a "man caused disaster")
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To: ding_dong_daddy_from_dumas; sickoflibs
My understanding is that the Fed is supposed to be the “adult” in the room. Neither cheer leading nor talking down the economy.

There are plenty of doom-mongers and plenty of cheerleaders available in the market. The Fed gets caught flat footed too regularly to not be political. DC is a big club and it is near impossible to have a normal social life without entering in to conflicts of interest, let alone the natural conflicts that already exist.

The pressure to do something and to keep the party going is naturally strong. I don't know how you keep politics out of the process.

16 posted on 08/03/2009 11:12:44 AM PDT by 1010RD (First Do No Harm)
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