Ben Bernanke’s able use of monetary policy to steer the economy during the current financial crisis sometimes makes it easy to forget that Bernanke helped steer the ship into that crisis early in his term as Federal Reserve Chairman and a member of the Fed’s Board of Governors. That’s a point Strategic Forecasting (Stratfor) founder and CEO George Friedman made when asked the likelihood of President Obama reappointing Bernanke.
“The probability of Bernanke being reappointed to the Fed is near zero,” Friedman said during an interview on CNBC’s Aug. 11 “Squawk Box.”
“Bernanke presided over the events leading up to the greatest financial crisis we’ve seen in quite a while,” Friedman told CNBC’s Steve Liesman. “The best that can be said is that he didn’t make it any worse than he already made it. The president is not going to be wanting to reappoint the man that most of the country regards as responsible for the problem.”
Wall Street has had a love affair with the current Fed chair as of late. He had been roundly criticized by the likes of CNBC’s Jim Cramer in 2007 for not acting promptly in the face of a pending economic crisis, but had won favor after showing a willingness to slash rates and avert the crisis. However, Friedman said the bad press of the last few years has marginalized Wall Street’s influence.
“Wall Street’s desires at this point are next to nothing in anybody’s calculation,” Friedman said. “Wall Street is seen as the problem. The idea that Wall Street is going to dictate the solution at a time when they don’t even have enough sense to control the bonuses that are given out – I mean, that’s just not of interest to the president.”
Friedman noted that the power has shifted from the financial community to
“The economic decision makers have lost all power over their own system,” Friedman said. “The political leaders are moving in to stabilize the system. So, the most important effect of this entire downturn is that for a period of time right now, it really doesn’t matter what the financial community thinks about things. The politicians are making decisions and that’s worldwide.”
Freidman’s Stratfor has a solid reputation in matters of global intelligence and their impact on financial markets worldwide, often cited by Barron’s and conservative host Rush Limbaugh.