Can Ben save the world?
For some people Ben Bernanke is a mysterious person, for some he is the marionette of Obama, for some he is one of the smartest person in the world but nearly everyone think that Ben has some of the power “to make the world go round”.
Ben Bernanke is the current Chairman of the United States Federal Reserve, “He just happens to be the most powerful nerd on the planet” (Time Magazine 2009).
The Fed controls the money supply and is an independent government agency that conducts monetary policy, which means it sets short-term interest rates. Ben is therefore influencing inflation, unemployment, the strength of the dollar and therefore the strength of your wallet.
According to Spiegel, Ben´s nightmare is the presence of global economic crisis. But worse would be that he is in charge and taking the wrong decisions. Spiegel and Focus, two German newsmagazines were determining Bens work last week in a kind of humorous but also scary way. The main focus was on the power that is given to one person in the 21th Century. Also if Ben looks like being the “right one” but is it right to give so much power to “King Ben”?
When the housing market crisis of the U.S. turned into the worst global financial crisis since many years, Ben blasted trillions of new dollars into the economy to rescue falling private companies, he ratcheted down interest rates to zero and gave money to borrowers who had never dreamed of receiving Fed cash.
The US Time Magazine is describing the situation very exorbitant what makes the situation funny and the reader smile but behind the whole scenario is pure seriousness what the reader never should forget. Probably the whole situation about the Fed and its global influence is so unreal and inconceivable so that you can only joke about it.
Focus is presenting facts about the Fed and its development under Ben Bernanke but not even close to the overwhelming and smart way as the US Time Magazine does it.
In comparison to Focus, Spiegel focuses strongly on future development and possible change of the influence and power of the Fed. Conspicuous but also coherent is that Ben directly tries to protect the power of the Fed. I think there is much more going on behind the setting what we cannot see from outside. How close is Ben to President Obama? What deals are made there?
“It is with considerable gratitude and not a little humility that I begin a second term as Chairman of the Board of Governors. I thank President Obama for the confidence he has shown in me by renominating me and the members of the Senate for confirming my nomination” (Speech, Chairman Ben S. Bernanke, Feb. 03.2010). The New York Times is writing critically about the second nomination what I think is correct because the reader should be stimulated to think about what is going on when such important steps are taken without any vote or democratic activity.
In my point of view Ben is one of the most important player guiding the world's most important economy. He definitely helped ensure that 2009 was a period of weak recovery rather than catastrophic depression. What scares me is that one institution, one man; one Ben has so much power to shape the path of the U.S. prosperity and even the direction of politics. What happens if this power is in the wrong hands? Did we not learn in the past years of history that too much power hold by one person can lead to the ruin….
I think Ben is one of the personalities that can manage this job, but what if he wants too much? Saving the world is not always easy and the future will bring up quite interesting challenges. Yen contra Dollar. Enthusiasts are switching out of dollar and into alternative low-yielding currencies such as yen. The dollar is therefore becoming less and less popular. This is only one issue Ben has to keep an eye on during his next four years at the Fed.
Ben has to learn that he cannot be friends with the whole world. Perhaps the dream of “saving the world” all the time is lovely but also keeps huge possibilities of failure. It's now up to our dysfunctional political system to let him do his job — and to fix the financial system so that he never has to save the world again.
Ben, good luck!
Sources used:
-Financial Times, Friday March 12, 2010
Increasing interest sparks movement
-The Time Magazine
Viewed: 14.03.2010
Available URL: http://www.time.com/time/specials/packages/article/0,28804,1946375_1947251_1947520-6,00.html#ixzz0iEkQtwpc
-Focus
Viewed: 12.03.2010
Available URL: http://www.focus.de/finanzen/news/konjunktur-bernanke-sieht-moderate-erholung_aid_483883.html
-Fed
Viewed 12.03.2010
Available URL: http://www.federalreserve.gov/newsevents/speech/bernanke20100203a.htm
-Spiegel
Viewed 10.03.2010
Available URL: http://www.spiegel.de/wirtschaft/soziales/0,1518,683512,00.html
-The New York Times
Viewed 14.03.2010
Available URL: http://topics.nytimes.com/top/reference/timestopics/people/b/ben_s_bernanke/index.html
-Business Week
Viewed: 14.03.2010
Available URL: http://bx.businessweek.com/ben-bernanke/view?url=http%3A%2F%2Fc.moreover.com%2Fclick%2Fhere.pl%3Fr2621123950%26f%3D9791
-Financial Times
Viewed 12.03.2010
“Alan Greenspan and Ben Bernanke still do not believe monetary policy bears any blame for the crisis” (headline The Economist 20th – 26th March, page 72)
ReplyDeleteA good entry and nice to see you focus on a personality which shows you can write about all sorts of different topics. Well written 7/10
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