Ben Bernanke

Ben BernankeI watched Ben Bernanke do an interview on a recent edition of 60 minutes tonight (we’d recorded it earlier).

There were many interesting things in the interview but there were two main ones I came away with:

(1) of all the things he discussed about how we might avoid another melt down in the future, the only one he mentioned that seemed significant to me was the idea that we need a level of  ‘systemic regulation’.

Indeed, it seems to me that there were very few people who really saw this thing unfolding and, of those, none of them were in a real position of power to do anything about it.  It was a big case of ‘no single raindrop thinks it is responsible for the flood’.

(2) The second thing was what he didn’t say when he was asked about what a recovery might look like.

He talked about the financial system firing up again and banks being able to borrow and lend money.   He talked about the U.S. economy being the strongest in the world and that we will be able to maintain that position.

What he didn’t acknowledge is that firing the economy back up and resuming business as usual just isn’t viable – if business as usual means more growth, more production, more population, more pollution and more consumption.

In a larger context, the current economic problems are a small tempest that may sort itself out in six months or two years, but it probably will.   But, if we resume growth, as we were growing before, even if we have good systemic financial market regulation – we will still be bound for a new disaster far far bigger than this minor bump-in-the-road financial crisis we’re currently in the middle of.

Mr. Bernanke is obviously a very intelligent man.   And I am much encouraged by the fact that he seems to be from neither the Wall Street world or the Beltway world.

But, if his measure of success is to resume an economy whose functioning is deeply dependent on incessant growth in a finite world, then he’s just going to take us from the frying pan into the fire – and I didn’t get that he sees that.

One Response to “Ben Bernanke”

  1. mike says:

    Dennis, don’t be so dense. Of course he knows what this means. However, given the position he holds, he is doing exactly what he has spent his life preparing for; keeping the boat floating. John Maynard Keynes said it years ago: “In the long run we are all dead”. As I keep telling ya over and over again, take a chill pill, relax, and enjoy the show. It’s the only game in town.

    Here is just the thing to cheer you up.

    Last Tuesday, as President Obama got off the Helicopter in front of the White House, he was carrying a baby piglet under each arm.

    The squared away Marine guard snaps to attention, salutes and says: “Nice pigs, sir.”

    The President replies “These are not pigs…these are authentic Arkansas Razorback Hogs. I got one for Secretary of State Hillary Clinton and I got one for Speaker of The House Nancy Pelosi.”

    The squared away Marine again snaps to attention, salutes and says, “Excellent trade, sir..”