Ben Bernanke has received a great deal of criticism for the Fed’s aggressive actions to fight the financial crisis, including tough questioning from Congress last week. Now Bernanke seeks to rebuild confidence in his leadership starting with a town hall in Kansas City. See the following article from HousingWire to learn what Bernanke said.
![filekey=|3812| align=|right| caption=|| alt=|ben bernanke|]Federal Reserve chairman Ben Bernanke defended the Fed’s reaction to the financial crisis Sunday at a town hall-style meeting in Kansas City, Mo. Just under 200 people attended the meeting, which was taped by PBS for broadcast later this week.
Bernanke fielded questions on federal bailouts, monetary policy and the Fed’s responses to systemic risk seen among financial institutions, which he likened to a toppling elephant at one point. He used strong language to describe his own reaction to having to bail out large financial institutions while small businesses suffer financial hardship.
“I’m as disgusted by it as you are,” he said, according to the New York Times. “Nothing made me more angry than having to intervene, particularly in a few cases where companies took wild bets.”
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It has turned out that a few companies taking on too much risk in the kinds of loan products offered and the financial instruments formed with these loans at the core have come under criticism as components of so-called “systemic risk” in the financial system.
Bernanke alluded to the latest buzz word as he defended the Fed’s policy decisions. “When the elephant falls down,” he said, according to the Wall Street Journal, “all the grass gets crushed as well.”
There was another elephant in the town hall, however — one quickly pointed out among media coverage of the event. Bernanke’s four-year term expires in January, which may put into context the unusual town hall meeting and his defense of the Federal Reserve.
“I was not going to be the Federal Reserve chairman who presided over the second Great Depression,” he said.
Bernanke is widely credited by economists like Nouriel Roubini as having averted a depression scenario through quick policy reactions and the lowering of the federal funds rate effectively to zero.
Bernanke cautioned against stimulating the economy into inflation, saying the risk of inflation remains “quite low” under the current federal funds rate, according to Bloomberg. He said he expects the US economy to grow at 1% annualized rate in H209, with unemployment exceeding 10% before declining.
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