First of all the correct answer is "I don't know". But I do have an opinion.

I think guys like Greenspan and Bernanke really do believe they are doing the "right" thing. I am not saying that the "right" thing would perfectly align with what we as citizens would agree was the right thing for the population in general, but I do not believe they are some sinister force that is purposely trying to bring down our nation or any conspiracy theory like that. I think they are doing the best job they think they can.

I do think they suffer from a generation of wrong thinking on economics. What they have done in the latter part of my life time is very much in opposition to what previous people in their position would have done. Kennedy, for example, even being a liberal was a very much strong dollar advocate and even issued silver certificate currency (dollars backed by silver- some conspiracy types even speculate that is one of the reasons he was assassinated). What is being done today is very much in opposition of what would have been considered "right" a generation ago.

For example, the statement "If a country's government spends more money than it takes in with tax revenues, they are eventually going to be in deep do do" would have been very much conventional wisdom generations prior. Now the Paul Krugman's of the world seem to think that a government or central banks balance sheet is of only minor concern. That is very much 21'st century thinking. I think history is going to prove them wrong in a very meaningful way.

What I don't know for sure is if Bernanke actually knows we are in deep do do and he is putting out fires to try to keep the ship from sinking or if the smoke he smells he thinks is just from a cigar so is ignoring it. In other words Bernanke could be doing what he is doing because he thinks it is the right thing or we could already be way past the point of worrying about doing the right thing and he is doing what he is doing out of desperation to keep things from completely imploding. This part I really don't have a feel for. He seems calm on the outside, which is a prerequisite for a central banker, even when the walls are falling down around them. Any sign of panic would surely panic the public.

The other thing I am absolutely certain of is the powers that be will do everything in their power to maintain status quo. Bernanke and the rest have invested their entire lifetime working for a system they believe in. It is almost impossible for a person that has stood for something their entire lifetime to stand up and say "I was wrong about everything. Everything I have worked for and believe in has been wrong. I am a failure". One in a million people might be capable of something like that. They believe in the system. They believe in central banking and their ability to manipulate things for what they consider is the greater good. So they will fight tooth and nail almost to the death to see that the establishment and system survives. All organizations are inherently this way. Once established the organization takes on a life of its own and will fight for its survival.

So if the economy has to be thrown under the bus to save the banking system, do I think Bernanke would do it? In a heartbeat. Because in his mind a society without a banking system (and more specifically the current banking system) is doomed anyway.

It has ALWAYS been about saving the banking system. From the very beginning of the financial crisis to this day. Any inquiry at any level below the surface will readily show that to be the obvious case. But that is not what they will tell us. They can't tell us that, for fear they would end up wearing tar and feathers.

So in summary, I believe Bernanke is doing what he believes is the right thing. I do not think what he believes is the right thing is also the right thing for most Americans.

John