On February 1 current Federal Reserve chairman, Ben Bernanke, will leave office. The accolades and praises of the Fed’s performance under his lead have begun to flow. Not surprisingly so, since Ben has ‘saved’ the capitalist banking system by providing about $20 trillion in near free and subsidized money for the banks, shadow banks, and wealthy investors since 2008. Conversely, that ‘liquidity’ injection unmatched in history has done little for the rest of the economy and the remaining 99% US households.
There is a great misunderstanding that the purpose and primary function of the Fed is to regulate the money supply and to supervise the banks. The purpose of the Fed, as the below referenced article, ‘Bernanke’s Bank: An Assessment’ clearly shows, has been from the Fed’s inception in 1913 to bail out the banks first and foremost. And money supply management and bank supervision have always been sacrificed to that primary objective. From the Fed’s creation to the recent ‘Bernanke Bailouts’ that is the historical record.
The article provides an historical overview of the Fed’s performance under Bernanke, as well as a view of the origins of the Fed and an overview of its performance since the 1970s.
The corollary point is also made that the Fed, in bailing out the banks, not only sacrifices money supply management and bank supervision but sets in motion processes that lead to still further financial instability, crashes, and subsequent bank bailouts. In short, bailing out the banks leads to further need to bail out the banks. But that’s how capitalist finance evolves, survives, and continues as finance capital increasingly ‘socializes its losses’ in order to privatize still further financial gains.
The 5k word feature article, ‘Bernanke’s Bank: An Assessment’, may be read in full in the February 2014 issue of ‘Z’ magazine, as well as accessed from the author’s website at http://www.kyklosproductions.com/articles.html
Dr. Jack Rasmus @drjackrasmus
Jack Rasmus 
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