Former Federal Reserve Chair Ben Bernanke told a group of economists and financial professionals in Toronto during a speech at the Economic Club of Canada on Tuesday that it was very hard to sell the central bank’s immense quantitative easing measures to the general public because citizens felt it was just a matter of bailing out the rich.
Bernanke explained that the public believed the Fed was favoring Wall Street as opposed to Main Street and noted that there still are people out there that do not comprehend why the Fed acted the way it did.
He even conceded that the Fed’s monetary policy directive can create distortions in the financial markets and went a step further by acknowledging that the central bank “didn’t identify all the aspects of the [financial] crisis” at the time and “in the fog of war there are many things we did that were imperfect.”
There you have it: Bernanke couldn’t garner the approval by the public because they knew he was destroying the currency, helping out financial institutions that didn’t need any help in the first place (see: David Stockman’s “The Great Deformation”) and hurting savers with near-zero interest rates and inflation.
Of course, Bernanke is blaming the public for not understanding what happened (we’re all stupid, remember?) At lease he admitted that the unintended consequences of the Fed’s mandates create distortions in the marketplace.
In the next four to eight years, what will current Fed Chair Janet Yellen tell an audience filled with the very same individuals that benefit from Fed stimulus? Pretty much the same thing.