"I, Bernanke"
And the Nobel Prize for economic recklessness and financial flimflam goes to...
“I, Bernanke
“Twerp… dweeb… nerd. Yes, that’s what they called me in school. In Hebrew School they had even worse words for me – putz… schmuck… and so on.
“But I showed them, didn’t I? They didn’t get the Nobel Prize. I did.
“How did I do it?
“That’s the interesting story. Even in Washington they took me for bupkis.
“I followed Alan ‘Bubbles’ Greenspan at the Fed. He understood how markets function. He had spent his time on Wall Street. He had studied the Austrian classics. He dated Barbara Walters and married Andrea Mitchell. He also knew what he wanted – power, fame, and status. He sold out and everybody knew it.
“In Washington, you have to choose – power or honesty. Not both. Greenspan went with power. And me, I was a guy with no experience, neither on Wall Street nor Main Street. I was an ‘academic economist,’ they said, with no knowledge of the real world.
“But I played them all. I was the consummate technocrat, with a Ph.D, spouting BS like an overflowing toilet. The ‘neutral rate’… economic capacity… excess saving…dynamic stochastic models -- all nonsense, of course. But if you really want to play the game in Washington, you need to play on both sides.
“Old Greenspan was too clever by half. Everybody knew he was lying. And he didn’t get the Nobel Prize. But when I lied, they just thought I was stupid. That was my great achievement.
“I did my academic work in the shadow of the great Milton Friedman. Friedman was ‘great’ because he recognized that governments are fundamentally parasites and that the less government you have the better off you are.
“He saw the money supply as the critical variant… and the collapse of banks in the 1930s as the main cause of the Great Depression. When the banks failed, depositors lost money, the money supply fell… and you had – a depression.
“I knew perfectly well that the bank failures did not actually cause the Great Depression. Banks failed because they had lent too much money to too many people who couldn’t pay it back. Left alone, the bank failures would wipe out bad debt and the system could soon get back on its feet.
“But I knew that view would never fly in Washington. So, when I was put on the spot on Friday, Oct. 3, 2008, I pretended to be a moron.
“If you don’t pass this legislation, I told Congress, you may not even have an economy by Monday.
“This was pure claptrap. I was surprised the clowns went for it. Markets adjust to whatever news they get. The failure of a few over-stretched mortgage lenders was never going to stop the whole economy.
“Markets don’t care who fails. And they don’t care about prices either. Or interest rates. They only care that they be true. I deliberately distorted them. First, by helping panic Congress into funding a huge Wall Street bailout. Then, by taking the Fed on a printing-spree… adding $21 trillion to the national debt since 2008. This is what led to the Bubble Epoch – 2009 to 2021 – and made it almost impossible to return to ‘normal’ without catastrophic losses.
“By then I had fully realized how fraudulent the whole system had become… with the cretins in Congress pretending to carefully consider the issues… the mountebanks at the Fed pretending that they know what interest rates should be… and ‘The People’ themselves pretending to have any idea of what is going on.
“It was then I decided on the title for my book, “The Courage to Act.” It was a laugh I shared only with my wife. Courage? It didn’t take courage to print trillions of dollars and set the stage for today’s inflation. No, it didn’t take courage. It took cynicism.
“I, Bernanke, mastered it. I did it. And I got the Nobel Prize for it.”
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