Playing it safe, not sorry, seemed to be President Obama’s only choice. Having been recently upstaged in the world’s arena by the chess master, Russian President Vladimir Putin, and finding difficulties in trying to overwhelm John Boehner and his Republican insurgents (Boehner is easy, it’s the insurgents that are the problem), there was no way that the president was going to disregard the advice of the young Democrats and Keynesian economists. Indeed, something about three strikes and you’re out wasn’t going to be part of Barack’s vocabulary. Thus, the president nominated Janet Yellen to lead the Federal Reserve.
In full disclosure, I thought that Obama would choose Roger Ferguson, who served under Alan Greenspan during the “maestro’s” reyegime, and is more than ably qualified. Unfortunately, whether it was Ferguson or Yellen, being “qualified” is certainly not the relevant point. What’s pertinent is the perception of the Fed’s limitations, and on that score, our newest Fed nominee believes that there are none.
Fundamental to the Bernanke-Yellen-Keynes philosophy is that credit (debt) is the main pathway to growth, and that the manipulation of interest rates and ease of access to money will somehow be the linchpin for a flowing and growing economy. The total disregard for the action and reaction of human beings on a daily basis — which results in the ebb and flow of commerce — is not only dangerous, but it’s also extremely arrogant.
Bernanke, Yellen, and for a brief period of time at the end of his term, Greenspan, all believe that they knew what’s best, and that individuals will continue to respond to an economic model — proven since the inception of the Fed in 1913 — that it’s doomed to failure. I could quote Einstein’s theory regarding insanity, but that would be redundant.
However, what I can do is take a page from one of the NFL’s greatest general managers of all time, Bill Polian. The mastermind behind the dramatic turnaround of the Buffalo Bills in the late-1980s to the early 1990s, Polian went on to become the architect of the rebuilt Indianapolis Colts franchise as he essentially built a dynasty starting with his first overall draft pick of Peyton Manning in the 1998 NFL Draft.
Polian’s philosophy was to realize that if you hadn’t won a championship lately, it was time to change horses (which in the world of money and credit, it means to find a different pathway.) In other words “say goodbye to Keynes and hello to Austria.” Regrettably, with Janet at the helm, it will be the “same ole, same ole.”
Well, as I’ve said for years regarding my beloved Buffalo Bills, there’s always next year.
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