Bartiromo Defends Bernanke On 'Meet the Press'
How much of what has happened in the housing market is Federal Reserve Chairman Ben Bernankeâ€™s fault?
Not much, according to CNBC â€śClosing Bellâ€ť host Maria Bartiromo. Bartiromo and CNBC â€śStreet Signsâ€ť host Erin Burnett were the featured guests on NBCâ€™s March 23 â€śMeet the Press.â€ť
â€śMeet the Pressâ€ť host Tim Russert asked Burnett and Bartiromo if Bernanke was â€śup to the taskâ€ť to take on problems with the U.S. economy. Bartiromo didnâ€™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.
â€śI really donâ€™t think you can blame Ben Bernanke for this, Tim,â€ť Bartiromo said. â€śYou know, I think that he is, as Erin said, throwing the kitchen sink, doing a lot at this point. And remember, heâ€™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.â€ť
What was â€śput in placeâ€ť 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.
Greenspan began to raise rates beginning in June 2004. In February 2004, Greenspan suggested subprime adjustable-rate mortgages (ARMs), which have been at the root of the current housing crisis, might be â€śa good deal,â€ť according to a June 23, 2004, USA Today article written by Sue Kirchhoff and Barbara Hagenbaugh.
â€śHe said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs,â€ť Kirchhoff and Hagenbaugh wrote. â€śThose savings would not have been realized, however, had interest rates shot up.â€ť
â€śAmerican consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,â€ť Greenspan said at a speech to a Credit Union National Association meeting, according to the article.
The article even included comments from Joseph McKenzie, deputy chief economist at the Federal Housing Finance Board in 2003, who said, â€śThere are lots of innovative programs, especially targeting low-income and first-time buyers.â€ť
Bartiromo gave Bernankeâ€™s job performance an overall positive assessment and said he was doing a lot to tackle current economic troubles.
â€śI actually think heâ€™s doing a good job,â€ť Bartiromo added. â€śAnd sure, you know, maybe they needed to watch to see how steep things really got before they actually got very aggressive. But, theyâ€™re certainly aggressive now.â€ť