Bartiromo Defends Bernanke On 'Meet the Press'
How much of what has happened in the housing market is Federal Reserve Chairman Ben Bernanke‚Äôs fault?
Not much, according to CNBC ‚ÄúClosing Bell‚ÄĚ host Maria Bartiromo. Bartiromo and CNBC ‚ÄúStreet Signs‚ÄĚ host Erin Burnett were the featured guests on NBC‚Äôs March 23 ‚ÄúMeet the Press.‚ÄĚ
‚ÄúMeet the Press‚ÄĚ host Tim Russert asked Burnett and Bartiromo if Bernanke was ‚Äúup to the task‚ÄĚ to take on problems with the U.S. economy. Bartiromo didn‚Äôt blame the Fed chief for the current economic environment, but defended Bernanke and said the foundation of the housing problems was in place prior to his tenure.
‚ÄúI really don‚Äôt think you can blame Ben Bernanke for this, Tim,‚ÄĚ Bartiromo said. ‚ÄúYou know, I think that he is, as Erin said, throwing the kitchen sink, doing a lot at this point. And remember, he‚Äôs a new chairman. You know, so what was put in place before he was actually in this role has set us up for this.‚ÄĚ
What was ‚Äúput in place‚ÄĚ prior to Bernanke came under the watch of Alan Greenspan, who served as the Federal Reserve Chairman from 1987 to 2006. Following the economic downturn connected to the dot-com bubble and the Sept. 11, 2001, terrorist attacks, Greenspan slashed interest rates all the way down to 1 percent on June 25, 2003.
Greenspan began to raise rates beginning in June 2004. In February 2004, Greenspan suggested subprime adjustable-rate mortgages (ARMs), which have been at the root of the current housing crisis, might be ‚Äúa good deal,‚ÄĚ according to a June 23, 2004, USA Today article written by Sue Kirchhoff and Barbara Hagenbaugh.
‚ÄúHe said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs,‚ÄĚ Kirchhoff and Hagenbaugh wrote. ‚ÄúThose savings would not have been realized, however, had interest rates shot up.‚ÄĚ
‚ÄúAmerican consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,‚ÄĚ Greenspan said at a speech to a Credit Union National Association meeting, according to the article.
The article even included comments from Joseph McKenzie, deputy chief economist at the Federal Housing Finance Board in 2003, who said, ‚ÄúThere are lots of innovative programs, especially targeting low-income and first-time buyers.‚ÄĚ
Bartiromo gave Bernanke‚Äôs job performance an overall positive assessment and said he was doing a lot to tackle current economic troubles.
‚ÄúI actually think he‚Äôs doing a good job,‚ÄĚ Bartiromo added. ‚ÄúAnd sure, you know, maybe they needed to watch to see how steep things really got before they actually got very aggressive. But, they‚Äôre certainly aggressive now.‚ÄĚ