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WORTH READING A Dose of Reality About the Cause of this Crisis (and the solutions)
From: David Farber <dave () farber net>
Date: Fri, 17 Oct 2008 19:51:45 -0400
Begin forwarded message: From: "Norman MacLeod" <gaelwolf () waypt com> Date: October 17, 2008 4:36:48 PM EDT To: "'David Farber'" <dave () farber net>Subject: RE: [IP] A Dose of Reality About the Cause of this Crisis (and the solutions)
http://www.garynorth.com/public/4146print.cfm Interesting take on the way things are . . . Norm From: David Farber [mailto:dave () farber net] Sent: Friday, October 17, 2008 1:08 PM To: Norman MacLeodSubject: Re: [IP] A Dose of Reality About the Cause of this Crisis (and the solutions)
do you a url for this? On Oct 17, 2008, at 1:29 PM, Norman MacLeod wrote: Dave —Please allow me to contribute the following “translation” of Mr. Bernake’s speech to the Economic Club of New York. It comes from a follower of the Austrian school of economics, and brings Fed-speak to a level more comprehensible to the rest of us . . .
-----Original Message----- From: Gary North's Reality Check [mailto:reality () dailyreckoning com] Sent: Friday, October 17, 2008 5:19 AM To: Subject: Reality Check - Lipstick On Bernanke's Pig Gary North's REALITY CHECK Issue 798 October 17, 2008 LIPSTICK ON BERNANKE'S PIG On October 15, Chairman Ben Bernanke delivered a lecture to the Economic Club of New York, titled, "Stabilizing the Financial Markets and the Economy." I am sure the title resonated to members of the Economic Club of New York, who saw the Dow Jones Industrial Average fall another 733 points before the day was over. He began his speech with these inspiring words: I will focus today on the economic and financial challenges we face and why I believe we are well positioned to move forward. I am reminded of Mort Sahl's comedy album in 1958: "The Future Lies Ahead." Yes, it does. I, for one, have no desire to be well positioned to move backward. The problems now evident in the markets and in the economy are large and complex, but, in my judgment, our government now has the tools it needs to confront and solve them. Does he mean that only now does the government have the tools? Is he saying that for the last sixty years, Keynesian economists, Chairmen of the Federal Reserve System, and Secretaries of the Treasury did not have these tools? They said they did. Were they wrong? The government has always had the tools by which it has dealt with the crisis over the last six weeks: taxation, inflation, and blarney. It would have been polite of Dr. Bernanke to tell us about these "large and complex" problems. He didn't. He gave no indication of a looming crisis so large that it would bring the international capital markets to gridlock, i.e., "frozen." Actually, the capital markets were not frozen. I was offered a 30-year fixed-interest mortgage for 5.7% two weeks ago, with 10% down. Prevailing interest rates revealed no evidence of freezing up, according to free market economist Robert Higgs. But without the hoopla about frozen markets, politicians around the world would not have capitulated to an increase of government debt of something in the range of $4 trillion in one month. Our strategy will continue to evolve and be refined as we adapt to new developments and the inevitable setbacks. "Evolve." "Be refined." Translation: "Making this up as we go along." But we will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity. "Restoring prosperity." Yes. Yet somehow I do not recall that Dr. Bernanke, President Bush, or Henry Paulson ever admitted before that we had lost our prosperity. As I recall -- I am getting older -- they all insisted repeatedly that there was no recession at all. As in all past crises, at the root of the problem is a loss of confidence by investors and the public in the strength of key financial institutions and markets.<snip>
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- WORTH READING A Dose of Reality About the Cause of this Crisis (and the solutions) David Farber (Oct 17)