Apparently, not too long after President George W. Bush tried to assure the Economic Club of New York about the soundness of the economy, Federal Reserve Chairman Ben Bernanke addressed the annual meeting of the National Community Reinvestment Coalition. Here is the lead from the report filed by Glenn Somerville for Reuters:
Federal Reserve Chairman Ben Bernanke on Friday pledged the U.S. central bank will make every effort to soften the damage from a wave of home foreclosures, which he said stem partly from reckless lending.
However, if Bernanke was trying to be more specific than Bush, we have to try to tease out even more specificity: What damage and to whom? Those who would think this is too nit-picking should consider Somerville's account of that Bernanke actually said:
"Far too much of the lending in recent years was neither responsible nor prudent," he said, but he felt lending to less creditworthy borrowers had been beneficial in the past and will be again at some future point.
The way I read this, the damage that Bernanke wants to soften is the damage to the lending institutions, rather than to those victimized by those institutions. Indeed, he seems to be saying that the predatory practices that brought this mess on in the first place may rise again after the economy has recovered! Unlike Senator Christopher Dodd, Bernanke seems to have lost touch (assuming he ever had it) with the real victims whom the government is supposed to support in times of crisis. Having recently invoked the metaphor of generals in the War Against the Poor, Bernanke's position throws a new light on just what our Commander in Chief is commanding and who his chief aide is!