When, exactly, did economists become charlatans? Probably in the early-mid 20th century. That’s when they stopped listening and began commanding. Instead of trying to understand how economies worked, they started to tell them what to do.
And now, economists are almost all mountebanks and scamsters.
They pretend to know what they don’t know at all. And they pretend to be able to do what they can’t do. They meddle. They interfere. They make precise estimates and forecasts. They make pompous judgments. They almost sound like they know what they are doing.
Last month, The Atlantic magazine proved that it is run by half-wits. It put a photo of Ben Bernanke on the cover with the headline: “The Hero.”
“Ben Bernanke saved the global economy,” said the description.
Oh really? How did he do that? Don’t bother to ask. Nobody knows what was wrong with the global economy…whether it has been ‘saved’…or how it was saved…least of all, the editors of The Atlantic.
Certainly, Ben Bernanke doesn’t know. The biggest credit and real estate bubble of all time blew up on his watch…anyone could have seen it coming. But not Ben Bernanke. And how could he possibly ‘save’ a situation that he neither saw nor understood?
Our assessment of Bernanke is closer to that of Mike Shedlock:
We can state without a doubt that Bernanke is an inflationist jackass, devoid of common sense. Clueless about trade, debt, history and gold.
Shedlock believes The Atlantic cover will earn it a spot in the contrarian magazine cover hall of fame, next to TIME’s famous 2005 cover: “Home $weet Home,” which lauded the advantages of buying a house.
We don’t know. But we know Bernanke is an economist. And economists are frauds. Can they make us richer? No. Can they make the economy work better? No.
What can they do? They can cause problems and then come up with claptrap solutions that make them worse.
Here is Joseph Stiglitz again, missing the point:
US inequality is at its highest point for nearly a century. Those at the top — no matter how you slice it — are enjoying a larger share of the national pie; the number below the poverty level is growing. The gap between those with the median income and those at the top is growing, too. The US used to think of itself as a middle-class country — but this is no longer true.
The country will have to make a choice: if it continues as it has in recent decades, the lack of opportunity will mean a more divided society, marked by lower growth and higher social, political and economic instability. Or it can recognise that the economy has lost its balance. The gilded age led to the progressive era, the excesses of the Roaring Twenties led to the Depression, which in turn led to the New Deal. Each time, the country saw the extremes to which it was going and pulled back. The question is, will it do so once again?
See how it works, dear reader? Stiglitz has no interest in what really causes “inequality.” Nor does he care what role it plays in an economy. He is simply convinced that it is ‘bad’ and that we must “do something about it!” What does Stiglitz propose? Raising taxes on the ‘rich’ of course.
In his mind, the economy is always losing its “balance” and going off the rails. And then, thank God, the economists of the progressive era and the New Deal come to the rescue.
But how does he know what balance an economy should have? Of course, he has no idea…only his own prejudices and preferences.
Economists are vain and incompetent. So are a lot of people. But what makes economists particularly reprehensible is that they are willing (and alas, able) to impose their prejudices on the rest of us.
How do they do that? Ah…we are about to reveal the dark secret of economists, GDP and other claptrap.
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010.
Who would believe the economists to be so ‘intelligent’to close the gold window?There appears to be a more sinister force paying these poor fellows.If Stiglitz is advocating a pull back to the gold standard he has’nt missed the point.
You can’t throw them all under the bus. I like the Austrians (including Mish Shedlock). You guys are alright too.
Wasn’t it Bernanke who raised rates that Greenspan had kept artificially low? Wasn’t it Greenspans bubble?
To dismiss Bernanke as not knowing what he is doing sounds equally misleading. (Don’t forget who owns the Fed folks and in whose interests he acts).
The anarchists at DR would have readers lose faith in everything including your fellow lumpen. Why? I can’t figure.
The problem is clear. The military/industrial complex has gained control of your country (to the rest of the worlds detriment) and you are being brainwashed to believe you can’t afford to look after each other or trust each other.
And that is just one of a million deceptions, isn’t it.
“When, exactly, did economists become charlatans?”
the moment they learned they could sell their expertise for a profit.
“And now, economists are almost all mountebanks and scamsters.”
“Certainly, Ben Bernanke doesn’t know. The biggest credit and real estate bubble of all time blew up on his watch…anyone could have seen it coming. But not Ben Bernanke.”
really? you think he doesn’t know what is happening and what he is doing?
let me ask it this way. do you really think he doesn’t know what his actions cause?
“The anarchists at DR would have readers lose faith in everything including your fellow lumpen. Why? I can’t figure.”
oh it’s easy. because they think that in the resulting chaos and destruction everything that holds them back will be swept aside and they will be free to act as they please.
one sees this encouragement of destruction in many blogs. hatred for government as such, hatred for other races, hatred for police, hatred for the other 90% of the population. it’s because they think themselves safe and wealthy enough to come out on top after the smoke clears. they think they’ll be the big dogs, the head honchos, the new manor lords.
meet the new boss. same as the old boss.
You’d think someone who saved the world would be able
to count off 21 trillions without taking his clothes off
when he got to 20.
Okay, I get it now. It took me a while for it to sink in but most of these comments are “spoofs” aren’t they? Wow. How slow is that of me to figure that out.
I’ve been reading DR for years but only just recently started following the “Comments” section. Even posted a couple times. Probably shouldn’t have.
I mean, I should have known that MOST of these were not reasoned comments that not only try to inform, but make some common sense and good discussion with some good humor mixed in. It just seems a loss and a waste of effort goin’ on here. Just sayin’.
Do you really think Bernanke is just misguided, or is it just the ‘safe’ thing to report?
Isn’t Ben supposed to be super smart, with some ultra high SAT score way back when and all that. Oh, I get it, he’s just misguided smart. Yeah.
The evidence points to Bernanke doing exactly what he’s told to do, and apparently that is to look after the health and welfare of the big banks.
I’d say he’s doing a good job at that.
Come on Bill, like Benny boy, you’re too smart and worldly to be convincing when you play dumb.
Alan Greenspan, the fabled Libertarian economist, created these problems.
My hunch is that Bernanke is trying to conduct an experiment (first tried by the Bank of Japan) to reduce interest rates to zero in order to deflate the economy. For some reason, and I don’t understand why, the zero rate of return on money creates a shortage of capital (interest income) which causes the deflation…. No-one has money to spend unless they have earned income from a job. So, prices fall, especially the prices of homes.
I mean you might ask any price you want for your home, but the market can’t deliver a buyer. Furthermore, without interest income from govn’t bonds, why would banks want to lend on over-priced homes?
Yes, a bank will fall all over itself to lend to a buyer if the buyer puts half or more of the new discounted (low) value of the home down in cash. Then the risk for the bank is minimal in the loan. And if the loan does go bad, the bank just dumps the home onto the market at an even new lower price.
This is called, de-flation. But the way to keep this deflation going is for the Fed to pretend that it is printing money, accommodating the economy, injecting new money into banks to bail-out bad debt, etc.
The last thing the Fed would ever want the money markets to know is that it is beginning a long over-due, controlled, slow and agonizing deflation for America.
If I am correct, a zero interest rate from the Fed is really a 3% real cost of money from the Fed, because prices of everything in the economy will deflate by 3% due to the shortage of money in the economy…….. Banks won’t lend unless you have 50% down, or more in cash. So, this is new.
In simple math: the velocity of money has slowed down to almost nothing, so the money supply is de-flated. Cash is scarce.
When you've got a room full of 200 oil insiders scratching their heads at current high prices, something's gotta give.
For most investors, it’s weird to think of stocks as their go-to investing option.
The petropoly has bills to pay and setting the price of oil was a simple way to balance their budgets.
Investors don’t seem to care that what's propping up their investments is what will ultimately destroy them: government monetary policy.
For the next decade the energy revolution will be likely confined to the US, displaying the robustness of American entrepreneurship.
Why the Sage of Baltimore’s commentary persists through America’s changing times.
After attending Platt’s oil conference in London I want to relay two important themes you need to know.