Chairman Milquetoast

Mike Whitney cuts through the economic gobbledegook so visible everywhere and writes an insightful analysis of our current economic situation. He ends by criticizing the reappointment of Bernanke as Fed Chair:

This is why Bernanke should never have been reappointed as chairman.
Bernanke understands the issues---underwater banks, overextended consumers,
exotic debt-instruments (derivatives), and an out-of-control financial
system--but he's refused to do anything about them. He's made no effort to
re-regulate the financial system, but (oddly enough) wants Congress to reward
his inaction by elevating him to "Chief Regulator". Go figure? He's also done
nothing to determine which institutions can be saved and which should be taken
into conservatorship and have their assets put up for auction. Instead, he's
given a blanket guarantee to every brokerage house on Wall Street; their garbage
paper can be easily traded for US Treasuries or liquidity at any of the Fed's
handy-dandy lending facilities. That's not a sign of sound judgment; it's a sign
of "regulatory capture". Bernanke is a push-over; Chairman Milquetoast.
That's why Wall Street loves him; he gives them cheap capital with one hand and
a pat on the back with the other.

It's no secret what's wrong with the economy; the banks are
struggling and consumers are broke. But there are remedies, they simply require
fresh thinking about regulation and how to maintain aggregate demand. (A boost
in pay would be a good start) The real problem is the institutional bias of the
Fed itself. The Central Bank's policies are shaped by its allegiance to
its constituents, particularly the big banks. Anything that doesn't advance the
objectives of the financial establishment, is just not on the Fed's radar.
That's why Bernanke's lame efforts to revive the economy will continue to
sputter, because we've gone as far as we can without fixing household balance
sheets and purging the excessive debt from the system.

The Fed is an obstacle to change, which is why more and more people are
starting to figure out that the Fed has got to go.