Just Stop, Ben Bernanke

Each month I cringe as I write my rent check. The D.C. lifestyle is no cheap shindig. It takes careful planning to ensure I don't have to turn to debt to finance my spending habits, and it means I need to live in an apartment that fits my budget. After all, after a missed rent check or two, my landlord would throw me out.

Common sense, right?
Apparently not. As millions of people shed tears after losing homes they couldn't begin to afford in the first place, the government is lending a hand to help these "poor" homeowners retain their houses. Well, hey, I don't like how expensive my rent is, so can I give ol' Ben Bernanke a call to plead for some aid as well?

I'd love to pay less each month without getting kicked out. And there's a boatload of materialistic items I have my eye on, so if the act of financial responsibility is of yesteryear, why am I being careful with my money? The Federal Reserve is on a mission to make sure that those who spend too much don't get themselves into trouble. Right?

Donations not wanted
I certainly missed the memo that said the Fed was becoming a charity. Like any other gift-giving entity, I'm sure our government feels all warm and fuzzy after "donating" everything from rate cuts to bailouts. But whether these offerings come straight from the heart or not, they shouldn't be welcomed.

Like a parent with children, you can't keep giving and giving, or the kids will never learn to fend for themselves. The same goes for our economy. The Fed cannot continue to bail out those who made short-sighted decisions. A lot of people screwed up, and a lot of people should suffer the consequences. If they don't learn their lesson, they'll just do it again.

Wall Street's Superman
As the Fed continues trying to save the entire market, I become more and more frustrated. I'm not cold-hearted, but if you can't afford a mortgage that was way out of your league, you simply deserve to lose your house. There are plenty of rental opportunities out there for those looking for a place to live. They just won't be living a government-subsidized life of luxury.

Nothing has infuriated me as much as the historic move to back up JPMorgan Chase's (NYSE: JPM  ) buyout of Bear Stearns (NYSE: BSC  ) . It is not the Fed's job to run around rescuing banks that royally screwed up because of greed, no matter how panicked the collapse would leave investors. Our market needs panic. In fact, we need to let parts of it fail. That's reality. There are plenty more potential writedowns to be expected from every bank from Lehman Brothers (NYSE: LEH  ) , to UBS (NYSE: UBS  ) , to Merrill Lynch (NYSE: MER  ) . Is the Fed really going to step in and offer help to all of these firms?

Rewarding the wrong party
Not only is the Fed rewarding those who messed up, but it's also essentially punishing those who didn't. The lowering of rates has done nothing for our economy, other than screw it up. High inflationary pressures and a plummeting dollar are two consequences to start with. But those who have actually saved (wait, that happens here in the U.S.?) are losing out big-time as interest on savings plummets.

In fact, those who do have a stash of cash left are the people this economy is counting on to stimulate spending (unless, of course, you're still relying on that tax refund package). To truly endorse spending, the savers need to let their wealth appreciate. But with the Fed dropping rates again yesterday, the government is discouraging saving, since the returns available on their cash are abysmal.

True, things wouldn't have been too peachy if the government hadn't stepped in, but I can guarantee that they wouldn't have been this bad. When the dot-com era came to a close, a lot of companies went under. That's what happens in overvalued, gluttonous, and very bullish markets. It doesn't matter whether you're Joe Schmoe who purchased a $2 million beachfront home on a middle-class salary or you're one of the largest financial institutions in the world. You need to pay the price of greed, even if it means you lose everything.

There's no solution but to stop trying
A market bubble burst. Our economy lost a lot of liquidity. Until our government walks away and realizes it cannot repair the damage, regardless of what financial tools it thinks it has, our economy will continue to sink.

No interest rate is low enough and no injection of liquidity into the markets is big enough to undo the destruction that has taken place. It's time for the Fed to fess up. It has made some mind-numbing mistakes and, in effect, whacked out literally every aspect of our economy. Please, Bernanke, it's not time to be a hero -- it's simply time to walk away.


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