Bartiromo Defends Bernanke; Ties Current Woes to Events During Greenspan’s Tenure
It's not Ben Bernanke's fault, according to CNBC's Maria Bartiromo.
Bartiromo appeared on NBC's March 23 "Meet the Press" with CNBC's "Street Signs" host Erin Burnett as the program's featured guests.
"Meet the Press" host Tim Russert asked Bartiromo and CNBC's Erin Burnett if Bernanke was "up to the task" to take on problems with the U.S. economy. Bartiromo didn't blame the Fed chief for the current economic environment, but defended Bernanke and said the foundation of the housing problems was in place prior to his tenure.
"I really don't think you can blame Ben Bernanke for this, Tim," Bartiromo said. "You know, I think that he is, as Erin said, throwing the kitchen sink, doing a lot at this point. And remember, he's a new chairman. You know, so what was put in place before he was actually in this role has set us up for this."
What was "put in place" prior to Bernanke came under the watch of Alan Greenspan, who served as the Federal Reserve Chairman from 1987 to 2006? Following the economic downturn connected to the dot-com bubble and the Sept. 11, 2001, terrorist attacks, Greenspan slashed interest rates all the way down to 1 percent on June 25, 2003.
Even revered economist Anna Schwartz, referred to as the "high priestess of US monetarism" by The Telegraph (U.K.) pointed the finger at Greenspan. According to a January 14 article in The Telegraph, the Fed under Greenspan's watch was the chief cause of the credit bubble.
"There never would have been a sub-prime mortgage crisis if the Fed had been alert. This is something Alan Greenspan must answer for," Schwartz said to The Telegraph.
A March 24 Reuters story reported Democratic presidential candidate Hillary Clinton will propose Greenspan to head up a group to solve the foreclosure crisis.
Bartiromo gave Bernanke's job performance an overall positive assessment and said he was doing a lot to tackle current economic troubles.
"I actually think he's doing a good job," Bartiromo added. "And sure, you know, maybe they needed to watch to see how steep things really got before they actually got very aggressive. But, they're certainly aggressive now."