Wednesday, February 25, 2009
In the quote of the day, Bernanke told Congress:
"We're not making it up . . . We're working along a program that has been applied in various contexts. We're not completely in the dark".Now I'm reassured. Except for one little thing . . .
Bernanke is a disciple of Milton Friedman (who actually came up with the whole "Helicopter" thing). And Friedman and the mainstream economics that Bernanke follows are totally wrong about how to prevent or get out of a depression.
As economist Steve Keen summarizes it:
Thanks to Milton Friedman and neoclassical economics in general, the Fed ignored the run up of debt that has caused this crisis, and every rescue engineered by the Fed simply increased the height of the precipice from which the eventual fall into Depression would occur.
Given that the most basic economic theories that Bernanke has been operating under are nothing but voodoo, it might be better if he were just making it up. Like a monkey typing on a computer, he would be bound to accidentally do something right every on occassion.