Revisiting the Financial Crisis: Sen. Michael Bennett Ignores Warnings

This is how clueless Sen. Robert Bennett was during the 2007 hearing of the Committee On Banking,Housing, and Urban Affairs. Bennett made this statement to Federal Reserve chair Ben Bernanke.

Senator BENNETT: And, by coincidence, I suppose the best rebuttal is in a piece that appeared in this morning’s paper by Brian Wesbury, who is the Chief Economist at First Trust Advisors, LP, in Illinois, ‘‘A Portrait of the Economy.’’ I would ask unanimous consent that the entire piece appear in the record.*

Chairman DODD: Without objection.

Senator BENNETT: He starts out, ‘‘It is the best of times. It is the scariest of times. Last year, U.S. exports, industrial production, real hourly compensation, corporate profits, Federal tax revenues, retail sales, GDP, productivity, the number of people with jobs, the number of students in college, airline passenger traffic, and the Dow Jones In-dustrial Average all hit record levels. For the third consecutive year, global growth was strong, continuing to lift and hold millions of people out of poverty. From 30,000 feet—heck, from 1,000 feet, it sure looks like the best of times. In relative terms, the first 5 years of the current recovery have been much better than the first 5 years of the 1990’s recovery. But this has not softened the pessimism of many pundits and politicians who are either unimpressed or expect the whole thing to come crashing down any minute, unless the Government firmly grabs the rein of the global economy and steers it clear of disaster.

And then he goes on to outline the history of how badly things have gone every time the Government has tried to step in and steer it clear, starting with the 1930’s and then the 1970’s. He makes this comment about the 1970’s, which I responded to, and it says, ‘‘Forgotten in the rush to pass judgment on capitalism is the fact that the last two times the Government seriously tried to control the economies in the 1930’s and 1970’s and made a terrible mess of it’’—well, I will leave the rest of it for people to read, but the one thing I would say to you, Mr. Chairman, if he is right—and I think he is—in the year of your stewardship, the last year, exports, industrial production, real hourly compensation, profits, tax revenues, retail sales, all are at record levels, you must have been doing a pretty good job. And if you were running for office, you would take full credit for absolutely all of it. Thank you, Mr. Chairman.

People were warning of an impending financial crisis and Bennett decided to treat this as utter nonsense. Bennett and other members of Congress can't say they weren't warned about a pending economic crisis. They heard these warnings and ignored them.

FEDERAL RESERVE’S FIRST MONETARY POLICY REPORT FOR 2007 by Michael Robert Hussey