Harkin will vote no on Bernanke

Senator Tom Harkin told the Des Moines Register and Radio Iowa today that he will vote against confirming Ben Bernanke to another term as chairman of the Federal Reserve. Radio Iowa quoted him as saying he’s "tired of being held hostage by Wall Street":

“I just think Mr. Bernanke is going to continue the policy of The Fed of taking care of the big financial institutions and to heck with Main Street,” Harkin says.

Harkin faults Bernanke for the handling of the Wall Street bailout. “Mr. Bernanke gave away trillions of dollars of taxpayers’ money to AIG at almost zero percent interest rate, and then they turned around and they held their counterparties – French, Germans, Swiss and many others – harmless. They didn’t have to take a hair cut at all,” Harkin says, “They got paid off in full and yet we (taxpayers) lost trillions.” […]

“I’ve had it with being told that some bank is too big to fail and I’ve had it with being told that someone, some person is so important that we have to have that person in this position.  That’s nonsense,” Harkin says.

Looks like someone didn’t get the memo about “our mild-mannered economic overlord” saving the country. Good for Harkin.

Meanwhile, Senator Chuck Grassley told the Des Moines Register, “I think I made a decision [on Bernanke] […] But I don’t think I’ll announce it.” Grassley went on to criticize the Fed for doing too little to fight inflation, suggesting we could be on a path to hyper-inflation like we had in 1979.

With unemployment at a 26-year high, I’m surprised Grassley is so concerned about hyper-inflation. Economists, correct me if I’m wrong, but isn’t deflation a greater risk right now?

  • Sweet

    I hope he loses!  That would be sweeeeeeet.

  • Hyperinflation? Really, Chuck?

    I’ll try to come back with some more complete economics later, but suffice it to say that worrying about inflation at all—much less "hyperinflation"— when the number of unemployed Americans has doubled in the last two years, is, in a word, bizarre.

    It’s like worrying about the water damage while you’re trying to put out a house fire.

    It’s like thinking about a new layer of shingles while the foundation of your house is crumbling into the ground.

    No, wait. These ho-hum “house similes” just don’t quite capture the utter goofiness of Grassley’s statement.

    How about this: Worrying about hyperinflation now, after two years of the worst economic downturn since the Great Depression, is like worrying that a flock of crazed Canada geese is going to swoop down from Minnesota and commandeer all the corn harvesters within a 20-mile radius of Oelwein, after which these honking fiends organize a mechanized corn harvester batallion to lay waste and destruction to the Jasper-Poweshiek-Story County area. Could it conceivably happen? Well sure, anything is possible, I suppose. But the chances are so small that worrying about it for even one second would be a waste of time.

    I think Grassley tipped his hand when he used the term “hyper-inflation.” It’s so over-the-top that it can’t be based on any real, non-ideological analysis of the situation. I’m speculating here, but it sounds like a poll-tested scare word, just like his twirl around the dance floor last summer with “death panels.”

    What has happened to the cardigan’ed senior Senator from the Great State of Iowa? First death panels, now hyperinflation. The guy used to be kind of a statesman.

    • Hyperinflation definition

      Just for the record:

      Hyperinflation is defined as “Very rapid growth in the rate of inflation in which money loses its value to the point where alternative mediums of exchange (e.g. barter or foreign currency) are commonly used.

      (Italics mine.)

      From The Penguin Dictionary of Economics, Seventh Edition (a standard reference work in the field).

      • Somebody should really hold Grassley accountable

        For using language like "hyperinflation." Who wants to write a letter to the editor? All you’d have to do is quote the definition I gave above and ask if Grassley is afraid we will have to start stocking up on gasoline, drinking water, flour, and Canadian loonies.

        I’d write the letter myself but I think it’d be better if it came from a current, rather than a former, Iowan.

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