I was going to write about a different topic for today but as soon as I saw the article regarding Barney Frank on Bloomberg.com I became very upset and decided this was just as important as my other topic.
Barney's lack of understanding shows through now as much as in the past, which is why I borrowed the title quote from Bernard Berenson, the Boston raised and Harvard educated art critic who died in 1959. As you know dear reader I do not like to write about political issues and prefer to stick to the markets, however, at a point when the governments share of the GDP is growing and now accounts for just under 44% of GDP up from just under 37% two years ago I think you have to look at politics as they have a direct impact on your investments.
If you don’t believe that politics can play a part in your investments just ask one of the poor bondholders from Government Motors. You may feel dear reader what is the big deal about the GM bondholders, in the first place if it was your bond you would think differently and in the second place the coercion to force bondholders to accept a deal that was an abrogation of contract law hurt the US and sets poor a precedent for the future. One of the things that made America the investing capital of the world has been our rule of law and respect for property rights, but that era has passed for expediencies sake as opposed to making hard choices.
Let’s get back to our pal Barney and his article “Frank Defends Bernanke, ‘Appalled By Republican Critism of FED Chairman’”. Frank says he is appalled by Republicans who he claims have sided with foreign central banks in criticizing Bernanke. He is very distressed because he claims it is Republicans joining China in criticizing and it is very distressing to him. He goes on to call the $600 Billion that “B52 Ben” is printing up via QE a very reasonable thing “that is not fueling inflation”.
Of course “BarF” as I like to call him (I must give credit to zerohedge.com for that one) has training as a lawyer and not an economist in fact he has never held a job in the private sector let alone run a business or met a payroll. I know that for many years he sat as the Chair of the Financial services committee where he had the ability to prevent the financial mess we currently find the US in but instead he was just intoxicated by his own power, which he demonstrated frequently by bloviating and attacking anyone who disagreed with him. Now, however, he wants us to believe that he knows what the outcome of “B52 Ben’s” money follies will be. He takes it one step further by trying to pontificate that opposition is based upon a partisan divide and using politics as usual he is trying to smear the opposition and obfuscate any rational discussion as to the outcome of the money printing.
Well “BarF” we may not have inflation here now but the inflation that we are not experiencing is being exported in large quantities elsewhere. Why do you think the Chinese are raising reserve requirements at the banks or the Korean’s raising interest rates? It is not because they want to but because they have to since their economies are growing and the capital that “B52 Ben” is printing up in the basement of the FED is sloshing everywhere but here….YET.
Frank Goes on to say “I wish we had some more fiscal stimulus”. “In the absence of that, given unemployment, given the complete absences of inflation, he is doing a reasonable thing”. Well “BarF” we have had the FED produce on the order of about $3 Trillion to fund your so called idea of the remedy that ails the economy and what do we have to show for it? We have exported inflation waiting in the wings for us at some point and a stubbornly high unemployment rate, all in all not a lot of success for the price tag. Notice how he says he wants more of it, of course he does so there can be more money for wasteful spending and transfer payments, none of which will help the economy in the long or short run.
Why should we listen to “BarF” just because he has an opinion and he is the current and soon to be the ex Financial Services committee head? “BarF” has a total lack of experience in the real world and he possesses virtually no knowledge about how an economy works or a business operates, yet he managed to hold on to the Financial Services chair strictly due to politics and went even further to author a financial reform bill that did not repair the major problems. It is simply astounding to me that this was allowed to happen, I am not saying that he needs to be an economic expert but at least he could have some knowledge of economics, the real world and maybe have held a job outside of government. You would not elect someone attorney general if they were not an attorney so why put someone in charge of the political arm of the economy when they have no background whatsoever in it.
So “BarF”, forgive me if I do not side with you on your calls to not criticize “B52 Ben” and his lunacy, but your track record on identifying economic problems is less than stellar. Moreover, it appears to me that the calls criticizing “B52 Ben’s” money adventure is hailing from more than just Republican corners but of course it make better press coverage when you inflame like that. If you recall in 2003 when Barney stated that Fannie and Freddie were fundamentally sound and even if they were not they would not be bailed out by the Federal Government. Once again in 2005 Barney was out there on TV claiming that there would be no collapse in Fannie or Freddie and that it housing was not a bubble. He even went further to state that the degree of leverage was not that of the Dot Com situation as these homes are owner occupied. Instead we will see an ebb and flow in house prices but not a collapse and that you would continue to push for homeownership. Remember all that…I did not think so Barney, especially since today in 2010 you are out on the TV bloviating that you were always critical of the homeownership aspect of housing and only wanted to push for rental housing. Moreover, in the ultimate irony you state that the Federal Government should not be sticking its nose in there. Simply unbelievable.
I have included a link to a couple ads from Barney’s opponent here in Massachusetts that plays along the lines discussed above since they are kind of amusing. Ad Number 1 , Ad Number 2 and the most humorus Ad Number 3.
Please understand dear reader I am not a Republican nor am I a Democrat I was raised to look at the individual and what they stand for and cast my vote to elect the individual that I believe will do the best job regardless of party; and I have voted for politicians in both parties. I really take exception to “BarF” because I live in his district and I will honestly tell you I voted against him as I cannot stand his partisanship which is exactly what creates the climate of decline we are currently trapped in. The only ideas and actions that Barney likes are the ones he or his party came up or allow him and his ilk to spend your money at alarming rates.
So the bottom line here is that I believe that we should all let “BarF” know that we disagree with his assessment and he should stick to learning to be able to identify pot plants and becoming the outdoors man that he is not currently. The real implication here is that like him or hate him “BarF” still has influence and he will push to keep the printing presses rolling and something tells me that he is already posturing to aid “B52 Ben” with QE3 since QE2 is just barely maintaining the status quo. In effect this is Barney's version of MOPE. Long live the Assignat!...er I mean Dollar!
You can call Barney to tell him what you think at (202) 225-5931 or email him (you need to put in Massachusetts and use a zip code in his district like 02459) or Fax him 202-225-0182. Let Barney know that “B52 Ben” is misguided and so is he.