Anyone hoping that the departure of Ben Bernanke as chairman of the Federal Reserve will mean more responsible monetary policy is in for a rude surprise if Obama’s nominee Janet Yellen is confirmed.

At her confirmation hearing Thursday, Yellen said that:

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[S]he will pursue policies that hurt people who try to build up wealth, claiming that impoverishing savers serves the collective good of society.

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Senator Mike Johanns (R-NE) observed that artificially suppressing interest rates hurts those who have saved:

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“You know, explain to the senior citizen who is just hoping that a CD will earn some money so they don’t have to dig into the principle,” Johanns asked, “what impact you’re having on a policy that says we’re going to — for as far as the eye can see or foreseeable future — keep interest rates low.”

“They are hurt by that policy,” the senator added.

Yellen said she agreed. “But you know, if we want to get back to business as usual and a normal monetary policy and normal interest rates, I would say we need to do that by getting the economy back to normal.”

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The Keynesian notion that explosively increasing the money supply to finance massive government spending will one day get the economy back to “normal” is an article of faith shared only by those committed to liberal ideology:

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Yellen avoided hard questioning from a Senate Banking Committee staffed mostly by believers in the Keynesian economics to which she subscribes. According to this belief system, excessive government spending can restore “equilibrium” to national economies. “Monetarism,” an outgrowth of the Keynesian creed, holds that central banks can plan economic activity by, among other things, creating more money — and thus more wage and price inflation — during slack periods.

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Not even John Maynard Keynes himself would have recommended a monetary policy consisting of perpetually throwing excessive money around. His contemporary Winston Churchill compared a government trying to tax and spend its way to economic health to trying to lift a bucket while standing in it.

As for outgoing Helicopter Ben:

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Current Fed Chairman Ben Bernanke, a student of the Great Depression, responded to the 2008 real estate correction with a quadrupling of the U.S. money supply, mostly through the policy of “quantitative easing” which creates about $85 billion in new money per month. While the policy arguably prevented house prices from reaching their natural lows at the end of the last decade, it has also created the longest period of economic stagnation since the end of World War II.

Yellen was not called upon to defend these policies, which she has signaled an interest in maintaining and expanding. She also suggested savers should be willing to see their wealth eaten away for what the Federal Reserve considers the greater good of society.

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When you hear progressives talking about sacrificing people to the greater good, be afraid. Be very afraid.

Senior citizens living on their savings aren’t only hurt by the low yield on their CDs. Every day money sits in the bank while the Fed spews out more of it, that money is worth less.

By using the Fed to endlessly increase the money supply, Obama et al., are effectively taxing every penny in existence through inflation. With no brake on their greed, they will keep raising this tax until American currency has been destroyed.

Janet Yellen was nominated because she will provide no such brake.

http://www.absoluterights.com/yellen-as-...war-on-savings/