ARROYO GRANDE, Calif. (MarketWatch) -- At last week's annual Jackson Hole meeting of Fed execs, Boss Ben Bernanke's braggadocio about saving the world from another Great Depression had the feel of an egomaniacal dictator trying to cement his legacy in history.

Any good behaviorist would tell you Bernanke's got some dangerous biases isolating him from reality (remember two years ago when he was denying the meltdown). His brash claims and radical, secretive policies present a grave danger to American capitalism and democracy.

In fact, Bernanke now appears to be America's (and the world's) most dangerous man, far more dangerous than Hank Paulson and the "Goldman Conspiracy" ever was. He's now acting like the supreme dictator of that larger conspiracy Jack Bogle called the "Happy Conspiracy" in "The Battle for the Soul of Capitalism: How the Financial System Undermined Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions -- And What to Do About It."

This indictment of Bernanke as a dictator leading Wall Street's "Happy Conspiracy" became clear after reading "Dismantling the Temple," William Greider's brilliant essay in The Nation magazine. Greider is the author of "Secrets of the Temple: How the Federal Reserve Runs the Country." Greider's essay is an absolute must-read for anyone interested in the future of capitalism, the decline of democracy, the next mega-meltdown, and the real "Great Depression 2" ... from which Bernanke cannot save us.

Why worry? Because the danger really is imminent. The same clueless Congress that did nothing when Paulson and the Goldman Conspiracy nearly bankrupted America is now about to give Bernanke's out-of-control "Happy Conspiracy" even more power, and another bigger chance to destroy our capitalism.

Here is a summary of Greider's history about how the Fed is sabotaging America:

The Fed was created by Congress in 1913, "independent" from "the rest of government, aloof from regular politics and with one powerful exception: the bankers." However, the destructive ideologies of Greenspan and Reaganomics prove how the Fed is manipulated by and dangerously dependent on politicians.

The Fed is "the black hole of our democracy -- the crucial contradiction." And the recent credit crisis blew "the Fed's cover." Voters and taxpayers have no "voice in these most important public policies" because the Fed "operated in secrecy."

"The past year, the Fed has flooded the streets with money, distributing trillions of dollars to banks, financial markets and commercial interests. ... People and politicians are shocked ... confused ... angered."

Where did the Fed get those trillions? They "printed it, out of thin air. That is what central banks do. Who told the Fed governors they could do this? Nobody, really -- not Congress or the president." The Fed "does not submit its budgets to Congress for authorization and appropriation. It raises its own money, sets its own priorities," keeps Congress and the American people in the dark.

Wall Street bankers own the Fed, it's their private club. They "collaborate closely on Fed policy. Banks are the 'shareholders' who ostensibly own the 12 regional Federal Reserve banks. Bankers sit on the boards of directors, proposing interest-rate changes for Fed governors," serve on a "special advisory council that meets privately with governors to critique monetary policy and management of the economy." The Fed's a legal conspiracy making bankers very, very "happy."

Congress is now "demanding greater transparency." Bernanke says "no," an audit would amount to "a takeover of monetary policy by the Congress." What a dictator. Greider quotes the Constitution: "The Congress shall have the power to coin money [and] regulate the value thereof." He adds that the Constitution "does not grant the president or the Treasury secretary this power. Nor does it envision a secretive central bank" acting as a megaphone for a president's political ideology.

Bernanke's powers go far beyond anything Paulson demanded last year. And he's now fighting a turf war because the "Happy Conspiracy" needs secrecy: no audits, no supervision, no transparency, no oversight, and zero accountability to taxpayers. Why? That way they can steal from the American people at will.

Greider's big warning: Recently Obama made a monumental mistake when he "proposed to make the central bank the supercop to guard against 'systemic risk' and set its own regulations. Obama's proposal gives the central bank even greater power" but does "not propose any changes in the Fed's privileged status."

Giving the Fed more power to self-regulate in secrecy is a guaranteed set-up for a bigger mega-meltdown around 2013, the Fed's centennial anniversary. Now is "a good time to dismantle the temple" warns Greider. "Democratize the Fed. Or tear it down. Create something new in its place that's accountable to the public."

Here are his "six reasons why granting the Fed even more power is a really bad idea:"

1. More power rewards failure, creating 'moral hazard'

Get it? Under Greenspan and now Bernanke the Fed has been a dismal failure: "Like the largest banks that have been bailed out, the Fed was a co-author of the destruction," says Greider. "During the past 25 years, it failed to protect the country against reckless banking and finance adventures," blinded by the politics of Greenspan and Reaganomics. "The Fed did not see this disaster coming ... did nothing to warn people." Or they did see it and let it happen, blinded by Wall Street's greed.

2. Fed policies will continue destabilizing U.S. and global economies

Under Greenspan and Bernanke the Fed has dangerously destabilized the American economy and global credit, stock and currency markets. Greider warns: "Its extreme swings in monetary policy, combined with utter disregard for timely regulatory enforcement, steadily shifted economic rewards away from the real economy of production, work and wages and toward the financial realm, where profits and incomes were wildly inflated by false valuations" as "the Fed tilted in favor of capital over labor."

3. The Fed's not objective, cannot investigate its own systemic flaws

Wall Street owns the Fed and has a monstrous conflict of interest. Greider's example: "The Fed served as midwife to Citigroup, the failed conglomerate now on government life support. ... Now the Fed keeps Citigroup alive with a $300 billion loan guarantee," protecting "the banking behemoths that it promoted, if only to cover its own mistakes."

4. The Fed cannot be trusted to protect taxpayers against Wall Street

Rich Wall Street executives manage the Federal Reserve System. Only a fool (or a clueless Congress) will ever trust the Fed to protect taxpayers. The Fed needs independent oversight. Congress needs to take back its constitutional responsibility.

5. More Fed power means more companies want 'too big to fail' status

If Congress continues neglecting its constitutional responsibilities and gives Bernanke supreme dictatorial powers over the "Happy Conspiracy," Greider says "a new superclass of 40 or 50 financial giants will emerge as the born-again 'money trust' that citizens railed against 100 years ago. But this time, it will be armed with a permanent line of credit from Washington. The Fed, having restored and consolidated the battered Wall Street club will doubtless also shield" companies like GE "against failure."

6. The Fed will be a rich-man's club dominating everything from the top

The Fed will "dominate everything from the top down" if Bernanke is anointed absolute dictator over the "Happy Conspiracy." Obama's misguided proposal will "foster even greater concentration of financial power."

Every "large company left out of the protected class will want to join by growing larger and acquiring the banking elements needed to qualify." And "most enterprises in banking and commerce will compete with the big boys at greater disadvantage, vulnerable to predatory power plays the Fed has implicitly blessed."

If Congress is stupid enough to abdicate its constitutional powers to the Fed, God help America's democracy. And for capitalism, this will go down as the biggest blunder of Obama's presidency, worse that Clinton's dismantling of the Glass-Steagall Act.

And yet, Greider hints that the worst-case-scenario may be inevitable: "The obstacles to democratizing the Fed are obviously formidable. Tampering with the temple is politically taboo. But this crisis has demonstrated that the present arrangement no longer works for the public interest. The society of 1913 no longer exists."

Still, America "has a rare opportunity to reconstitute the Federal Reserve as a normal government agency, shorn of the bankers' preferential trappings and the fallacious claim to 'independent' status as well as the claustrophobic demand for secrecy."

But unfortunately, "many in Congress will be afraid to take on the temple and reluctant to violate the taboo surrounding the Fed. It will probably require popular rebellion." Why? Because Congress (like the Fed) dances to the bidding of Wall Street and its lobbyists who donate megabucks to their campaigns. So don't expect reform until the next crisis, a mega-meltdown around 2013, the centennial anniversary of the Fed.

Till then, you're on notice that the man most likely to destroy American capitalism is Ben Bernanke and his "Happy Conspiracy" of Wall Street bankers that own our Federal Reserve Banks.