Monday, December 17, 2007

Is Ben Bernanke More Like Santa Claus Or The Grinch?

After cutting interest rates yet again, most people would logically lean towards Bernanke acting more like Santa Claus; after all, he is trying to help investors out and boost the economy, right? While many investors were hoping for a nicer present this Christmas--i.e., a 0.50 percent rate cut--they still got a present nonetheless.

However, many investors are pointing towards Bernanke being more like the Grinch at this point. But that could just be because they are acting like greedy little kids crying because they only got an Apple iPhone for Christmas when they expressly told you they wanted an iPhone AND a Nintendo Wii.

The Grinch wouldn’t even bother to give a present at all, right? In fact, if Bernanke was the Grinch, he probably would have raised rates and then gone to his little cave and laughed himself to sleep. Yet others are saying Bernanke pulled a fast one and is really the Grinch disguised as Santa Claus. Come to think of it, the Grinch just might try something like that--at least you couldn’t put it past him. Here are a few arguments for each case.

Ben Bernanke is the Grinch in disguise:

Ron Paul is one person who believes that Ben Bernanke is the Grinch operating under the disguise of Santa Claus. Paul claims that Bernanke and the Fed are robbing from Americans' savings by decreasing the value of the dollar through interest rate cuts and money supply increases. Even a 0.25 percent increase is too much. An entertaining video of a Q & A session with Ron Paul and Ben Bernanke speaks to this point:

Bernanke is the Grinch:

Morris Beschloss, an economist and columnist for The Desert Sun (Palm Springs), said “Bernanke is so far behind the curve now….There is such a down-drag now in the banks. Even if the banks wanted to help out with the foreclosures banks don’t like to take property. But they themselves are in trouble. I would have absolutely bet today that they would have went with 50 basis points. I got angry. I thought this was an absolutely [done] deal. I thought they might even go 75. To me, I would call this the worst action the Fed has ever made.”

Ben Bernanke is Santa Claus...still looking…

Okay, so no one thinks Bernanke is Santa Claus. Either he didn’t deliver a big enough rate cut or else any thought of a rate cut is simply blasphemous--it doesn’t seem like there is much of a middle ground here in people’s minds. No wonder everyone hates the Fed Chairman: They can never do enough. Maybe we all should send Bernanke a Christmas card in the spirit of the holidays. After all, even in the movies, the Grinch and Scrooge didn’t turn out to be all bad.

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