Friday, September 18, 2009
The Sarcastic "Economist"
"As the financial crisis gathered force in August 2007, Jim Cramer, a hyperbolic market commentator on cable television, hurled the worst epithet he could muster at the chairman of the [Fed]: 'Bernanke is being an academic. It is no time to be an academic!' ... It is too soon to declare that the threat of depression has passed, but not to conclude that Mr Bernanke's academic background, which seemed a liability at the start of his tenure, has proved his greatest asset. ... The recovery now under way will be feeble: deflation will remain a bigger threat than inflation for at least a year. ... He will also have to create a new monetary regime to replace the single-minded focus on low inflation, says David Blanchflower, who recently quit the Bank of England's monetary policy committee. ... But Mr Bernanke not only acted more quickly and forcefully, he faced unique constraints. ... But America's economy is now dominated by a shadow banking system of investment banks, financial firms and investment funds. Mr Bernanke's staff devoted much of their creativity to overcoming the legal and technical barriers of the Fed's 20th-century charter and, when they hit the limit, convincing Congress and the administration to pick up the baton. ... Professional economists have applauded Mr Bernanke's action, but the public has not", my emphasis, Economist, 27 August 2009, link: http://www.economist.com/businessfinance/PrinterFriendly.cfm?story_id=14327657.
Where to begin with this? "Begin at the beginning", said the King in Alice. The story is titled, "The very model of a modern central banker". This tells us what the Economist really thinks of Zimbabwe Ben (ZB), not much. How do we know? The Economist likens him to Gilbert & Sullivan's "modern major general", my 25 August 2008 post: http://skepticaltexascpa.blogspot.com/2008/08/new-army-career-path.html. Laugh. "Deflation will remain a bigger theat than inflation"? We are on the other side of the looking glass. "Single minded focus on low inflation", huh? Are all central bankers Mad Hatters? "Devoted much of their creativity to overcoming the legal and technical barriers", ah, ZB runs the Enron of central banks. Now POTUS Obama can pardon Andrew Fastow (AF) and put him on the Fed at the next opening. Alternatively, AF would make a fine replacement for Timmy Boy. Who could object to AF at Treasury? I can't. He never worked a day in his life for Goldman Sachs!