The Pretense of Knowledge Is Alive & Well

By, Chris Rossini

Ezra Klein put out a list that supposedly makes the case for Larry Summers as the next Fed Chairman.

It must be clarified, before going any further, that the whole Yellen vs. Summers match is purely for entertainment purposes only. In the real world, no man (or woman) can possibly succeed in centrally planning the economy. But, we are dealing individuals who operate under The Pretense of Knowledge, so let's play along for fun.

Here are some of Ezra's findings on the case for Summers:

— Summers will be a more engaged regulator - [...] Outside the White House, the knock on Summers is that he’s a tool of the banks — he helped with the financial deregulation of the 1990s, and he was skeptical of the Volcker rule during Dodd-Frank, and he’s taken millions of dollars in consulting and speech fees from Wall Street.

This drives his supporters crazy. They see the 1990s as basically irrelevant. They think Summers made good points about the difficulty of enforcing the Volcker rule. They think his Wall Street experience is a plus, as it means he actually understands the industry.

The truth is that The Federal Reserve itself is a tool of the banks. It's a banking cartel. Trying to separate the banks from The Fed is an error. It's one big happy thieving family. Any (and all) government regulations that are put in place (or removed) are done for the benefit of the entire system.

The best way to picture it is to think of a giant octopus. The head is The Federal Reserve and the sprawling arms are the banks. It's all one unit. "Regulations" and "Deregulations" are just fodder for the masses out there to think that "government is doing something".

To think that The Fed is some kind of "regulator" is the same as thinking that the arsonist "regulates" the fire.

— Summers knows how to manage a crisis. This White House is particularly attuned to the idea that the economy can fall apart at any moment. Summers, they think, knows what to do when that happens.

Really the "recovery" can fall apart?

Of course it's going to fall apart; as do all castles that are built on sand.

All that the Fed has been doing (for decades now) has been a successive continuation of distorting and contorting the economy. They continue to rack up the malinvestments, while also preventing the liquidations.

At some point (and no one can no exactly when) the market will finally show it's wrath, and deliver a massive coup de gras. Whether it'll be under the next Chairman's term, or five Chairmen from now is anyone's guess.

But, whoever the unlucky one is, he or she will be as effective at "managing the crisis" as this guy:

— He’s really brilliant. [...] The experience of taking an idea to Summers, they say, is the experience of having the smartest person you’ve ever met focus intensely and seriously on what you just told them and then give you 10 reasons you never thought of for why it’s idiotic or won’t work or needs revision. And those 10 points are good points.

You know who else used brilliance for nefarious reasons? Anyone remember the "geniuses" that ran Long-Term Capital Management?

There was also this guy:

Smarts, connections, experience, good intentions...None of it matters!

No one should be Chairman of an organization that should not exist.

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