Email | Twitter
Central Planning is tough work. But there's never a shortage of Princeton professors who aren't ready to tackle the impossible task.
Our current professorial price-fixer is once again struggling to find that sweet spot. He turns a wrench here...hammers a nail there...and those darn humans just aren't acting the right way.
"Don't worry," the talking heads keep telling us year after year "Ben and his mastermind team will eventually crack the code. They'll figure out the combination to the magic lock."
Back on Oct. 15, 2007, Bernanke said in a speech (my emphasis):
Subprime mortgages originated in late 2005 and 2006 have performed especially poorly, in part because of a deterioration in underwriting standards.You see...standards were too low. Anyone with a heartbeat was able to get a loan. We need tighter regulations and more oversight. Just give the authorities more power (and more time) and they'll fix this thing up. You watch.
Now fast forward five years to 2012:
You've got to be kidding me!
Now lending standards are too tight?!!
It's true, Yahoo has it right here in black & white (my emphasis again):
Federal Reserve Chairman Ben Bernanke said Thursday that banks' overly tight lending standards may be holding back the U.S. economy by preventing creditworthy borrowers from buying homes.I guess it's back to the
Bernanke is good at manufacturing more than just electronic digits. Excuses are also in abundant supply. And it's always those other people that are the problem - Banks, Congress, Speculators, Europe...you name it.
If only an alternative could be found for this. If only something existed that could balance savings and investment. Something that factored in everyone's time preferences.
Boy, we can really use it.
Then we can send these hard working teachers back to their universities, relieving them of this impossible task of "managing the economy." Ninety-nine years of watching a dog chase its tail is enough.
Perhaps someday, someone out there will discover an alternative.
Let's keep our fingers crossed.