Transcripts of the US Federal Reserve Board’s 2007 meetings reveal that the man who is now experimenting with America’s (and, by extension, the world’s) monetary health—by whom I mean Ben Bernanke, the current Fed chairman who is continuously shooting adrenalin into his patient’s heart in the decreasing hope he can induce a flicker of new life—had no idea at all in 2007 that catastrophe was about to strike. No idea whatsoever.
Despite the world being already in the Greatest Depression since the Great Depression, this bozo and his colleagues around the boardroom table never even saw the train wreck coming. Bernanke
noted that housing was “very weak” and manufacturing was slowing but sounded an optimistic note. “Expect for those sectors, there is a good bit of momentum in the economy,” Bernanke said.
At the same meeting, Timothy Geithner, then president of the Federal Reserve Bank of New York and now Treasury secretary, said “developments of financial markets on balance since the last meeting have been reassuring. The panic has receded.”
By December, the economy had plunged into the recession, which would officially last until June 2009. Five years later, the economy has yet to fully recover.
Note that these are not dumb people. They are not bozos because they lack intelligence; they are bozos because they think knowledge of economics gives them complete knowledge of the economy, and with that the ability to tinker with it.
They are wrong. They were wrong then, and they are wrong now.
They are wrong because they didn’t even know what they didn’t know. They never realised that, as Hayek pointed out (as translated into rap) “The economy isn’t a class you can master in college. To think otherwise is the pretence of knowledge.”
Not only do these bozos not even understand what Hayek’s point is trying to tell them, all those very same bozos who helped deliver the greatest economic catastrophe in seventy years are still in charge of the recovery.
Is it any wonder there isn’t one?