Bernanke, Jackson Hole and the Importance of Being Wrong
And, lo, from the great wilderness, from the antlered gate of the Hole of Jackson, the voice of the Fed, the high priest of the economy, Ben the Reserved has declared what the fortunes of our land shall be; and verily he has declared that it shall be pathetic and the fault of those who…who…who…well, those whose fault it truly is, but now that we are mired in the trap of non-liquidity and are bound ever lower, his hands are tied. And great will be the suffering of all the people. All the people who don’t have a substantial personal fortune, anyway.
I’ve got a question. How can everybody who declares they have the true answer to our current national economic morass be right? Doesn’t somebody get to be wrong; doesn’t somebody have to be wrong, when opposing theoretical positions and hermeneutical assumptions are irreconcilable? Ben Bernanke, as head of the Federal Reserve doesn’t automatically get to be right about the future of the economy simply by virtue of his office. Alan Greenspan, his predecessor, is Exhibit #1 for the fallacy of that attribution.
Even a brief foray into the cyberland of pundits, op-ed columnists, and bloggers reveals that every single one of them believes he or she is right about his or her solution to our economic woes. The reason these folk cite for their veracity is that they can point out who is clearly wrong and therefore is an ignoramus. Only rarely does one find an inspired author who actually is working from a model that has been tested under the withering scrutiny of scholarly review and has been further field tested on the roiling surf of economic reality.
The ultimate test for intellectual honesty would be to have all these very-certain self-proclaimed para-ignoramuses stand under the great antler arch in Jackson Hole, during a wild Wyoming thunderstorm with its hurricane force winds and recite the principles of their economic “truth,” on the superstitious belief that if all they were blowing was just hot air, that would dislodge one of the antlers and…the result wouldn’t be pretty. That’s certainly much more humane than pseudo-presidential candidate Rick Perry’s lynch mob approach. Of course, he has jumped head-first into the pool of para- ignoramuses who believe they are right because they can point out people who have to be wrong. Perry evidently has exceptional talent for pointing out who is wrong, along with great hair, but that’s another post.
So, who’s going to be wrong? That in my mind is far more important with regard to our pathetic economy than who’s right. To sneakily slip in a biblical allusion, we really need the tares to be winnowed from the wheat.
The facts are that someone is wrong about their economic model/dogma/delusion being the one that will revitalize our economy. They need to either get out of the way or in an act of self-preservation we need nudge them out of the way so the folks with the model that will be guaranteed to work can get their economic engine running in high gear. That we truly need.
From the pronouncements of Ben the Reserved, it’s increasingly clear that the folks who wrong are getting wronger by the day. After all, the economy stuck in pathetic is just plain wrong.