Tuesday, December 2, 2008

Heck of A Job

I read John Cassidy's New Yorker profile of Ben Bernanke and the current financial crisis last night and I was struck by a couple of things.

First and rather simply after the big lead picture of Bernanke and the opening lines,

Some are born radical. Some are made radical. And some have radicalism thrust upon them. That is the way with Ben Bernanke, as he struggles to rescue the American financial system from collapse.
I was ready for a fairly sympathetic piece about how Bernanke has responded and what he has done to fight the meltdown and staunch the bleeding. So as I read and quotes like this one kept coming up I was a bit surprised at the level of the take-down (not that it was undeserved, quite the contrary actually)
Summing up the widespread frustration with Bernanke, Dean Baker, the co-director of the Center for Economic and Policy Research, a liberal think tank in Washington, told me, “He was behind the curve at every stage of the story. He didn’t see the housing bubble until after it burst. Until as late as this summer, he downplayed all the risks involved. In terms of policy, he has not presented a clear view. On a number of occasions, he has pointed in one direction and then turned around and acted differently. I would be surprised if Obama wanted to reappoint him when his term ends”—in January, 2010...

In October, at a meeting in Washington of central bankers, executives, and economists, Allen Sinai, the chief economist at Decision Economics, Inc., asked Bernanke how he thought a central bank should manage the economic risks posed by a housing bubble. According to Sinai, Bernanke said that he had no way of knowing if there had been a housing bubble. “I realized then that he just didn’t realize the scale of the problem,” Sinai told me.
As I read on I realized that the story of our current financial collapse reads a lot like the story of what led up to the Septemer 11th attacks or that of Hurricane Katrina. Each time the Bush Administration was warned that there were problems and that they should be addressed before it was too late. And each time Bush and his cronies waved off the warnings and dissmised their critics as worry worts or questioned their patriotism. And each time the critics were right and then suddenly it was too late.

Hell of a track record Bushie.

Make sure to read the article yourself, it is a bit long but available on a single page (woo hoo).

Late Addition: Steve Benen at Political Animal has been having similar thoughts.

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