Blind Leading the Blind

Can the guy who has a small army of research economists really be this clueless about the future?



And this is the guy who wants to gather the new powers of "risk czar" with responsibility for peering into the future and identifying trends that would raise risks and therefore should be reeled in by appropriate regulation.

Something is wrong with this picture. How can a guy be so wrong in some many ways still be in charge? Do we need the blind to lead the blind?

Note: Warning! This video was compiled by a right wing ideologue. So I may have been suckered by the message. I don't have the resources to check out all the facts, but from what I know the text comments in the video are correct. Certainly Bernanke has been accused by others by being a "tool" of Greenspan's right wing "markets can never be wrong" philosophy. On the other hand, Bernanke was an academic specializing in the Great Depression so he knew he had to act to save the US in the fall of 2008. So my view is that Bernanke has been on both sides. He helped lull the country into the disaster but he also rushed in to save the country after the wheels came off. You may argue that he was a pyromaniac who sets fires to become the hero that puts them out and therefore should be tossed out. I don't think so, but I can see how it might appear to be so. In general I wouldn't touch Alan Howitzer's material with a barge pole, but this video appears to be factually correct. What a guy like Howitzer won't tell you is that it was the right wing's de-regulate and "the market is never wrong" philosophy that created the crash, not Bernanke. At best, Bernanke was a follower who believed the right wing nonsense so he was complicit in letting it happen. Now that it crashed, Howitzer targets Bernanke as if he was the instigator. It was the right wing ideology that was the true instigator.

Update 2009aug6: For a contrary view, Brad DeLong has reiterated his support for Bernanke in a posting on his web site:

There follows Lucas’s praise of Bernanke (and his Federal Reserve colleague Ric Mishkin) and his excoriation of the critics of economics:

Mr Bernanke and Mr Mishkin are in the mainstream of what critics cited in The Economist’s briefing call a “Dark Age of Macroeconomics.” They are exponents and creative builders of dynamic models and have taught these “spectacularly useless” tools, directly and through textbooks that have become industry standards, to generations of students. Over the past two years they (and many other accomplished macroeconomists) have been centrally involved in responding to the most difficult American economic crisis since the 1930s.... They have drawn on the ideas and research of Keynes from the 1930s, of Friedman and Schwartz in the 1960s, and of many others. I simply see no connection between the reality of the macroeconomics that these people represent and the caricature provided by the critics whose views dominated The Economist’s briefing...

I approve of Robert Lucas’s praise of Ben Bernanke.

I agree with it.

I am and have long been an enthusiastic fan of and supporter of Bernanke (and Mishkin too). I think he is one of the very best we have, and I do not see any better candidates (I do see some as-good candidates however) for the seat he occupies.