tag:blogger.com,1999:blog-5592542.post2563737312016924178..comments2024-03-18T17:28:44.693-07:00Comments on Rondam Ramblings: Can Ben Bernanke really be this stupid?Ronhttp://www.blogger.com/profile/11752242624438232184noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-5592542.post-6523079130467763332011-07-12T10:39:15.968-07:002011-07-12T10:39:15.968-07:00My favorite econ blogger, Scott Sumner, has posted...My favorite econ blogger, Scott Sumner, has posted a short and thoughtful analysis of <a href="http://www.themoneyillusion.com/?p=9669" rel="nofollow">what both progressives and conservatives missed</a> about the recent recession.<br /><br />I note in Ron's original post, he writes: <i>The housing crisis was not an unexpected aberration, it was the completely predictable result of the Don Geddishttps://www.blogger.com/profile/04214642122689048677noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-4686732422732941872011-06-24T15:25:33.570-07:002011-06-24T15:25:33.570-07:00Ron, you seem to be confusing a whole bunch of dif...Ron, you seem to be confusing a whole bunch of different issues here.<br /><br />First of all, I agree with you about Bernanke.<br /><br />A second issue is how we as a society choose to pay for government services that we want, and what share of that burden falls on the wealthy vs. the poor. But that's not what we're talking about here.<br /><br />A third, related, topic is how we deal Don Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-20275901059589557902011-06-24T15:04:50.924-07:002011-06-24T15:04:50.924-07:00> You need actual, specific, regulations
> ...> You need actual, specific, regulations<br /><br />> Glass-Steagall is specific<br /><br />I'm starting to worry about you, Don.<br /><br />There are no magic bullets here. Inflation is one way out of this mess, but that is effectively a tax on those whose assets are primarily in currency i.e. savers and those at the bottom of the economic ladder. I don't think that's the Ronhttps://www.blogger.com/profile/11752242624438232184noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-57563468205922291562011-06-24T11:18:13.218-07:002011-06-24T11:18:13.218-07:00Coby: You (and Ron?) seem to view regulation as a ...Coby: You (and Ron?) seem to view regulation as a dial, where the US is now on 3 out of 10, and you want to move the dial up to 7. But it doesn't work like that. You need actual, specific, regulations, not just more of them. What is the specific behavior that is problematic, that you want to prohibit? These questions are not at all easy to answer. (Well, Glass-Steagall is specific, but IDon Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-58918867400080144252011-06-24T11:03:02.889-07:002011-06-24T11:03:02.889-07:00I will go on the record agreeing with Ron on this ...I will go on the record agreeing with Ron on this one, though I don't think picking a particular year is a safe prediction. We are headed for another crash and it is in no small part due to the complete lack of a proper remedy for the first one. Glass-Steagal should be restored, derivatives and CDSs regulated, existing regulations toughened and properly enforced. <br /><br />US economic cobyhttp://scienceblogs.com/illconsiderednoreply@blogger.comtag:blogger.com,1999:blog-5592542.post-91203300479519994172011-06-24T08:11:35.019-07:002011-06-24T08:11:35.019-07:00Stagflation was notable at the time, because it wa...Stagflation was notable at the time, because it was such an unusual economic situation. Rarely seen before or since (and certainly not the case today), and complex to account for in macroeconomic theories.<br /><br />All that said, my original point stands: most Fed actions either lower unemployment by raising inflation, or vis versa. The Fed has a tradeoff to make. That's independent of Don Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-82904261310130389622011-06-24T07:50:02.658-07:002011-06-24T07:50:02.658-07:00> If he claimed to be confident about economy t...> If he claimed to be confident about economy that would not be any better.<br /><br />There is a big difference between being confident in the economy and being confident in one's ability to understand the economy. From the Fed chairman I expect the latter, not the former.<br /><br />> That unemployment rate is close to directly controllable by the Fed.<br /><br />That theory was Ronhttps://www.blogger.com/profile/11752242624438232184noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-76928840881379171662011-06-24T07:22:47.193-07:002011-06-24T07:22:47.193-07:00Dennis, you're probably right about the long-t...Dennis, you're probably right about the long-term <i>possibility</i> of the economy, but certainly not about the short-term actual economy.<br /><br />The US had 4-6% unemployment from 1996-2008. And 9-10% unemployment from 2009-now. Those missing 5% of the working population could have been doing something productive for the last couple of years, and the US would currently be wealthier if Don Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-33240881443121254412011-06-23T23:05:51.094-07:002011-06-23T23:05:51.094-07:00I don't see any problem with Bernanke claiming...I don't see any problem with Bernanke claiming to be caught off guard.<br />If he claimed to be confident about economy that would not be any better.<br /><br />Bernanke's job is to keep US Economy relatively stable and so far he's doing ok. There is no big dip since 2008.<br /><br />Overall long-term progress of the economy is not under Bernanke's control anyway.<br />Long term Dennis Gorelikhttps://www.blogger.com/profile/17700219093521377626noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-20176207963472927122011-06-23T20:41:23.168-07:002011-06-23T20:41:23.168-07:00I agree that Bernanke is screwing up. I happen to...I agree that Bernanke is screwing up. I happen to think it's for a different reason than you do, but he's the one with all the controls for the economy. When he says that he was "caught off guard" and doesn't know why the slow growth is "more persistent than we thought", that's a self-admitted failure.<br /><br />"I don't know what is happening"Don Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-49444299652101763812011-06-23T19:56:14.931-07:002011-06-23T19:56:14.931-07:00Also, just for the record, I will be thrilled if i...Also, just for the record, I will be thrilled if it turns out that I'm wrong and Dennis and Don are right.Ronhttps://www.blogger.com/profile/11752242624438232184noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-84068610288628437732011-06-23T19:53:10.492-07:002011-06-23T19:53:10.492-07:00Time will tell which of us is right, but one thing...Time will tell which of us is right, but one thing is certain: history will not vindicate Bernanke, because he is not taking a position. He's standing there with his dick in his hand saying that <i>he doesn't know what is going on</i>. I may be wrong, but at least I have a defensible and testable theory. He doesn't. And that's bad because it's his fucking job.Ronhttps://www.blogger.com/profile/11752242624438232184noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-92041959065186496942011-06-23T19:31:52.563-07:002011-06-23T19:31:52.563-07:00Could you please remind us what is top marginal ra...Could you please remind us what is top marginal rate in Hong-Kong and how deep is economic crisis there?<br /><br />Let me go on the record here too:<br />In the five years (2016) our economy would be nothing like economic crisis of 2008. It would be at the highest prosperity level ever.<br />It would resemble 1999 with inevitable bubble burst in the following years, but that burst would be no Dennis Gorelikhttps://www.blogger.com/profile/17700219093521377626noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-15379971319278203582011-06-23T17:35:03.575-07:002011-06-23T17:35:03.575-07:00Or, let me try a different way: you're probabl...Or, let me try a different way: you're probably right, that financial deregulation leads to increasing financial instability. But that could be a perfectly fine tradeoff for an economy to make, to achieve greater average growth.<br /><br />The "real problem" is that the financial instability led to an economy-wide (even global!) recession.<br /><br />Compare the dot-com crash in Don Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.comtag:blogger.com,1999:blog-5592542.post-51338905323162655212011-06-23T17:29:21.654-07:002011-06-23T17:29:21.654-07:00You say that your theory of what caused the financ...You say that your theory of what caused the financial crisis is "blatantly obvious to an amateur like" you, and wonder why Bernanke can't figure it out.<br /><br />The obvious possibility, of course, is that your theory is simply wrong, and, as expected, Bernanke is smarter (or at least more knowledgeable) than you.<br /><br />For example, without going into any of the details, Don Geddishttps://www.blogger.com/profile/14921093108555061757noreply@blogger.com