Simulated Q&A With Ben Bernanke and Barney Frank
Before every major Hill hearing, staff prepare a briefing book for the Chair with simulated Q&A and background information. I imagine the following for next Wednesday morning's Humphrey-Hawkins hearing with Fed Chair Ben Bernanke.
Q. from Chair Barney Frank: "Mr. Bernanke, where are the jobs?"
Expected A: "We create the best possible monetary conditions for job growth. Under the law, that's all we can do."
What Bernanke would like to answer, but won't: "Zero interest rates aren't easy enough money for you! If Congress wasn't always pushing for easy money, we might not be in this mess."
Followup Q.: "Mr. Bernanke, isn't it true that on the night of September 16, 2008, you bailed out AIG with $85 billion of taxpayer money that could have been used instead to create jobs?"
Expected A: "When your neighbor's house is on fire, you don't hire more household help, you fight the fire."
What Bernanke would like to answer, but won't: "Let's trade places here and see how well you do!"
Q. from Chair Ben Bernanke: "Mr. Frank, where are the jobs?"
Expected A: "We threw $787 billion at job creation last February, and we're getting ready to throw some more."
What Frank would like to answer, but won't: "You control the FOMC. You can do anything you please! I've got to scrape up the votes and keep the people back home happy. How many tea parties have been held on Constitution Avenue? Ted Kennedy was my friend. Now I've got to work with Scott Brown!"
Followup Q.: "Mr. Frank, isn't it true that on the afternoon of July 23, 2008, you voted for a plan you created to bail out Fannie Mae and Freddie Mac to the tune of $200 billion each?"
Expected A: "When your neighbor's mortgage is underwater, you send in Fannie Mae and Freddie Mac to buy it. We can't kick voters out of their homes."
What Frank would like to answer, but won't: "Give Fannie Mae and Freddie Mac back to me. These government conservatorships are bad for getting reelected."
Final Q: "Mr. Frank, who is going to pay for all of this? The Fed isn't a piggybank."
Expected A: "It isn't?"
Watch what actually transpires on the House Financial Services Committee web site.
Subsidized Mortgages vs. Property Taxes
"When your neighbor's mortgage is underwater, you send in Fannie Mae and Freddie Mac to buy it. We can't kick voters out of their homes."
Voters get kicked out of their home all the time by government for not paying their property taxes. Wouldn't it make better sense to decrease property taxes than to subsidize home mortgages to encourage home ownership?