Martin Schneider writes:
Ben Bernanke’s had a hard “time”:http://emdashes.com/2008/12/an-obit-fit-to-blog-and-print.php of it “today”:http://emdashes.com/2008/12/best-of-the-120108-issue-banan.php on our “site”:http://emdashes.com/2008/12/the-wavy-rule-a-daily-comic-by-96.php, but you know, the Dow’s lost a fifth of its value since he took over the Fed. I think he can take what Emdashes dishes out.
For me, the most stunning revelation of John Cassidy’s “article”:http://www.newyorker.com/reporting/2008/12/01/081201fa_fact_cassidy?printable=true comes in the third paragraph, in which it is revealed that before the truly cataclysmic problems began in September, Bernanke and his crew had been merrily pursuing what they “referred to as the ‘finger-in-the-dike’ strategy.”
The mind reels. Now, Bernanke has been criticized for seeing too little danger on the horizon, and judging from Cassidy’s fine article, that criticism is merited. But shouldn’t _his own choice of metaphor_ have been a powerful signal _to him_ that he might be assessing the potential for crisis too lightly?
Even if the actual folk tale of the Little Dutch Boy has a “happy ending”:http://en.wikipedia.org/wiki/Hans_Brinker_or_the_Silver_Skates#Popular_culture:_the_legend_of_the_boy_and_the_dike, isn’t the image that the phrase evokes one of a crisis that mounts steadily, beyond the ability of even an infinite number of fingers to plug the bewildering profusion of holes? Isn’t the lesson that some problems demand _much more_ than a Little Dutch Boy?
That blind spot tells us much about the perils of ideological rigidity in an ideological time; if you believe that the market is self-correcting and that governmental intervention is pernicious, then you are liable to see even Armageddon Itself as a matter best handled by a few judicious tweaks to the interest rate. Bernanke’s not an ideological firebrand; yet even he believed these things. That’s telling.
Simply put: If Plan A is an overt advertisement that you intend to let the problem overwhelm your intentionally meager efforts, isn’t that a strong indication that you should start looking pretty carefully at Plan B?
It makes me think of John McCain. He never referred to the Sarah Palin pick, or anything else, as a “Hail Mary,” you know. That was a characterization made by observers. If he had done so, it would have been tantamount to conceding defeat; isn’t that exactly what Bernanke did? How is this not economic malpractice? Am I making too much of this?