Former Fed Chief Ben Bernanke and Presidential hopeful Bernie Sanders have never seen eye to eye on the financial crisis and now Bernanke is openly attacking the Vermont politician.
On Wednesday Bernanke took a direct jab at Sanders. In his newly released book, The Courage to Act, Bernanke said that far-left Democrats “suffered their own delusions” about the facts of the financial crisis. He then adds, “Senator Bernie Sanders of Vermont…seemed to see the world as a vast conspiracy of big corporations and the wealthy.”
During the Democrat debate one major topic area was the Glass-Steagall Act, a major piece of Depression Era banking law that was in place from 1933 to 1999.
Sanders said he wants it reinstated. For years, he has blamed a repeal of the law for the financial crisis.
Bernanke doesn’t understand why Sanders is still talking about that particular act. “I’m actually a little puzzled by the focus on [Glass-Steagall],” in the presidential campaign, Bernanke said at a Politico-organized event in New York. “If you look at what happened a few years ago in the crisis, Glass-Steagall was pretty irrelevant to it.”
Bernanke points out that Bear Stearns and Lehman Brothers, were the first two banks to fail and they only serve Wall Street, while the Glass-Steagall act aims its sights on banks that serve both Main Street and Wall Street.
Bernanke took another jab by arguing that Sanders’ style of politics is bad for the U.S. government. He argues that Sanders and others in Congress used public anger during the financial crisis to blur the facts of the crisis and the Fed’s role.
“A dose of populism is healthy for any democracy,” Bernanke writes, “But in extreme forms, populism can also lead to cynical manipulation of legitimate public anger…when these aspect of populism dominate political discourse, good governance is nearly impossible.”