Bernanke is Helping Destroy the Global Economy By Doing Too Much, Not Too Little

Business Insider has made a list of ‘The 13 People Who Are Destroying The Global Economy’. I agree with most of the list, but not the reasons. The most notable example of this is Business Insider’s fourth choice, Ben Bernanke.

I am not going to disagree with the lovely people at BI that Bernanke is up there with President Obama and European Central Bank President Draghi as one of the most dangerous people influencing the world economy, but the justification is misplaced:

Bernanke has also received criticism from economists like Paul Krugman for not engaging in enough monetary easing to boost the economy further. Krugman wrote recently in New York Times Magazine, "The Fed is supposed to pump up the economy when it’s running too cold, with unemployment high and inflation low. That’s where we are right now, in the Fed’s own estimation. Yet the most recent minutes, from March, show Fed officials unwilling to take any further action to boost the economy.

Of course. Bernanke is doing too little, not too much. It is the Federal Reserve’s lack of action that seems to earn him number four of BI’s list that includes a seemingly contradictory group of people including Grover Norquist, Rep. Ron Paul (R-Texas), President Hollande, Chancellor Merkel, and Rep. Eric Cantor (R-Virginia).

BI’s main contention with Ron Paul seems to be his opposition to the Fed which has somehow hampered its monetary activism:

His continued insistence on slashing Government spending has informed the Tea Party movement, and any Republican member of Congress that strays too far from their orthodoxy is likely to be challenged in a primary. His rhetoric on returning to the gold standard has politicized the Federal Reserve, helping to constrain Ben Bernanke's actions. He is retiring from Congress in January, but he will continue to use his strong grassroots network to push for smaller government. 

BI also put David Cameron on the list, repeating the tiring myth of his supposed ‘austerity program’.

The Federal Reserve has done a huge amount of harm, and Bernanke deserves to be on any list of ‘The 13 People Who Are Destroying the Global Economy’. He deserves to be on such a list for doing too much, not too little.

Peter Schiff explained Bernanke’s dangerous role in our current discontents to Reason back in April:

 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Wait, the Koch brothers aren't #1? And where the hell is Lex Luthor on the list?

    This list is the most mewling, repulsive example of the idea that politicians must "do something" I've seen in a while.

  • Hugh Akston||

    We all know that you belong on that list. When was the last time you bought a new car? If the answer is anything other than "this morning" you're worse than Hitler.

  • ||

    Look, Hugh, I realize that you think that our wonderful politicians don't have magical powers that can save economies. But they and the media tell me they do, and frankly, who do you think I'm going to believe? I mean, I've played SimCity. I know how this stuff works.

  • Hugh Akston||

    So that's why Pauly Krugnuts keeps angling for Obama to push the Alien Invasion button.

  • ||

    Maybe he should just settle for a Godzilla attack.

  • The Immaculate Trouser||

    Shut up, Epi. They don't have magical powers until they implement the Socialism civic and have their workers all build farms. Obviously someone hasn't played enough Civ.

  • ||

    Just because you choose the "Order" tree and I choose the "Autocracy" tree doesn't make you better than me!

  • The Immaculate Trouser||

    No, but my tanks conquering your last allied city-state does.

    Shouldn't have spent so much time building the Eiffel Tower.

  • ||

    But I needed that +8 Happiness empire-wide!

    Don't worry, the Atomic Bomb I just finished is on its way to your capital.

  • The Immaculate Trouser||

    Damn it. I should have known better than to trust a Mick to fight clean.

    You are a Mick, right? It'd be terribly embarrassing if I got my wops and my micks confused.

  • ||

    Tread carefully, TIT. You don't mind if I call you TIT, do you?

    I knew I should have used my Mohawk warriors to take you out right away. See what happens when you're not viciously aggressive with war?

  • The Immaculate Trouser||

    I thought that was what happened when you were a viscous retard with a lisp. I knew I shouldn't have coddled you at the beginning -- the mentally infirm are never content with being adorably slow, are they?

  • ||

    Yeah, but I'm a viciously aggressive in war retard with a lisp. That makes all the difference. Let's play again. I'll be England and you be India and we'll play on a large archipelago map.

    "I just moved here from Canada and they think I'm slow, eh?"

  • The Immaculate Trouser||

    I'm a patriot, asshole. England v US all the way, baby! We'll see how that works out for you.

    "We're gonna go America all over their asses!"

  • ||

    Look, I didn't go to Vietnam just to have pansies like you take my freedom away from me.

  • ||

    You went to Vietnam to set up a sweatshop, Epi.

  • ||

    And a lot of good men died in that sweatshop!

  • ||

    I'm just biding my time until I have tanks and you don't. Soon...soon.

  • ||

    Anybody else playing the new expansion? I think it greatly improved the game. The religion aspect seemed worthless at first but looking deeper it can be used cleverly to enhance any of the victory goals.

  • The Immaculate Trouser||

    Haven't played the game at all recently. Is the steampunk scenario any good?

  • ||

    I barely have time to play a few hours of Diablo a week; I can't possibly add another game.

  • ||

    It's on my to-get list.

  • ||

    Did you guys read about this?

    http://www.cnn.com/2012/06/18/.....index.html

    I always hated the Civ end game. This only verifies my hatred of it.

  • Killazontherun||

    Replaying Daggerfall 'cause my video board blew up over the weekend. Wont get around to replacing it until next weekend. It is almost impossible not to cheat in this game. Clearing off a shelf while the merchant is watching you. He is right there! Then turning around and selling the goods back to him. You don't even need cheat codes. You just bump into this stuff by clicking the right buttons. Perfect RPG would be a marriage of Daggerfall and Marrowind in the rules system sans the cheats, a decent physics api attached, and Crysis 2 level shaders. You would not hear from me in months.

  • Killazontherun||

    BTW, you wanna play, Bethesda released it for free, and here is a Windows friendly version with a bunch of fixes and missions added to it.

    http://theelderscrolls.wiwilan.....llSetup_EN

  • ant1sthenes||

    I would love to play a future Elder Scrolls game with a similar character system -- less utterly broken, of course, but there was a lot of potential with the different advantages and disadvantages you could choose.

  • ||

    The reader comment highlighted in this article examines that pretty well: http://gameological.com/2012/0.....the-funny/

    I just got a computer powerful enough to play it and I'm waiting for the Steam summer sale to buy it but that sounds disappointing. A good game forces you to make choices and not make good at everything.

  • Hugh Akston||

    So basically everyone on that list falls into two categories:

    1) Retarded austeritarians who don't realize that you can fill any pit if you just dump enough money into it.

    2) Good-hearted champions of infinite debt economics who aren't dumping fast enough.

  • Sam Grove||

    I think that should be "austeritians".

  • SIV||

    Matthew Boesler and Max Nisen are the authors of the piece. Attributing the views to Business Insider is kinda like quoting a George Will column and saying The Washington Post says...

    Sloppy work as usual Mr. Feeney.

  • Tulpa the White||

    You're claiming BI has no control over what tripe is published in their mag, then?

  • SIV||

    No dumbfuck.

    It's a contrarian opinion piece with a byline.

  • ||

    Mr Feeney is also on my shit list for that horrible piece on 5 reason we should care about the Euro...Good catch SIV.

  • The Hammer||

    Tell us more about how great Romney is, SIV.

  • SIV||

    lol

  • tarran||

    So to sum up, Business Insider magazine are fucking clueless about how capital structures work in an economy, or are actively trying to mislead their readers for the benefit of some tuple of special interests that stand to benefit from keeping the bubbles going.

    That's good to know...

  • Paul.||

    is up their with Obama

    Joez lore?

  • Tman||

    Holy crap is that article terrible.

    I read a few of the 13 and had to stop for my own health and well being.

    On Obama:
    "First; the initial stimulus package was not large enough. Whether he underestimated the depth of the crisis, or overestimated his ability to pass more stimulus later, he missed an opportunity to shorten the downturn. Now declining public sector spending is holding back an economy that can ill afford additional headwinds."

    Holy fuck is that stupid. The reason we had a recession in the first place is because we overspent (as a nation-from the homeowners to the banks and everyone in between) and bought things we couldn't afford. Any solution that involves anything other than "spending less immediately" is just sheer stupidity.

    And then they argue that Ron Paul is the reason for the Tea Party "extremists"?

    This is one big pile of stupid of an article.

  • ant1sthenes||

    "Any solution that involves anything other than "spending less immediately" is just sheer stupidity."

    Well, if it's like many other addictions, quitting cold turkey would be more dangerous than continuing to feed the disease. A graduated response would be best, but that would require accepting a longer-term and miserable rehabilitation.

  • ||

    Horseshit! Anyone who can't go cold turkey is a pussy. Pull the Band-Aid off quickly. Get it over with. Recover in my lifetime.

  • cthorm||

    Hum Drum, just another post that fails to inform the reader about pretty much anything.

    Hmm - why does BI say Bernanke is dangerously inactive? Where does this disagreement come from, who are on each side and what are their arguments? Lets be representative and just pick the most polarizing representative from each camp. JOURNALISM FAIL.

    George Selgin has a really thoughtful explanation of why he thinks the Fed is doing too much. Lars Christensen and Scott Sumner have their responses as to why they believe the Fed should do more. Oddly enough these guys are all from similar economic perspectives. No need to pit the prototypical Keynesian with his Austrian equivalent.

  • Cytotoxic||

    No need to pit the prototypical Keynesian with his Austrian equivalent.

    Except that these are the only two viewpoints that matter.

  • Killazontherun||

    Good find on the Selgin article. Quite good. I may have more to say later on on a part that caught my eye (I don't think he does us Rothbardians justice on the 'sticky wage' 'problem') if I find the free time later. I may have shot my free time for the evening.

  • Killazontherun||

    Okay, I got sucked into the comments:

    Market monetarists do not 'overlook' the coordination problem emphasised by Hayek. However, they consider it a secondary concern. The unraveling of malinvestment and redeployment of resources to more sustainable ends has been frustrated by lingering monetary disequilibrium. Once the nominal problem is resolved, whatever remains is presumably the natural rate of unemployment

    How can coordination be considered a secondary problem with dis-coordinate signals in the market still persist? When that is the case, and that certainly is our current situation when housing prices are still propped up through official regulatory and tax policy, the malinvested bloat of government growth still continues, monetary policy, QE,in spite of temporary gains, only exacerbates the negative signaling.

    What happens is entirely predictable and was. Bernanke's QE of late 2011 led to a very short lived uptick that turned into a sputtered out shot wad.

  • Sevo||

    C4C spiked car sales. For a month or so. Per Bastiat, no one looked at the losses.

  • Eduard van Haalen||

    Ron Paul politicized the Fed the same way the Kentucky legislature politicized the Sedition Act.

  • Bitter Taxpayer||

    Bernanke is ruining this country by not running the printing presses fast enough!!!11!

  • Sevo||

    OT, but TASTY!
    "Presidio Social Club, located on federal land in the Presidio, starts serving foie gras"
    Yep, in San Fran, the land of tolerance and progressivism!
    http://insidescoopsf.sfgate.co.....foie-gras/

  • Mr. FIFY||

    That's for rich, connected people only, though.

    Like California politicians, for instance.

  • Greg F||

    We are essentially screwed as there are far to many people (some who claim to be economist) that don't understand that currency is not wealth. They don't seem to grasp the obvious that printing more currency cannot stimulate wealth creation.

  • Ted S.||

    Maybe Bernanke should try doing Too Much, Too Little, Too Late. It can't be any worse than what he's doing now.

  • C.D. Lake||

    There is a Chinese banker that can do more than all those on the list combined to ruin the American economy. What happens when our banker pulls our $1.2 trillion line of credit? Why do we put ourselves in this position http://www.thechinesebanker.blogspot.com/

  • ||

    Quit buying their stuff?

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement