All you need is ignorance and confidence and the success is sure.
Ben Bernanke has hit the speaking circuit with his first post-Fed speech in Abu Dhabi, where he commanded a cool $250,000. The former Fed chair used to earn $199,700 a year, so by the time he wraps up his schedule this week, he will have pocketed three years worth of cash. I have no beef about the cash. I wouldn't knock the hustle, but many will say he'll now go around the world being paid by people that banked big cash, while he was the world's chief money printer. More important than knocking the hustle (I do speaking engagements for a lot less), I was fixated on a couple of his comments.
Ben Bernanke says the Fed could have been more aggressive, and I am thinking they have thrown in the kitchen sink and all the plumbing.
Then there was his observation that: "the United States had become overconfident" as it went headfirst over the cliff in September 2008. People were feeling good, especially those buying and flipping homes, but in general the nation was mostly in an indifferent state, with official readings on confidence being well below levels seen at the peak of the stock market bubble.
The Fed was overconfident and flat-footed. Moreover, the truth is Ben Bernanke was overconfident and Janet Yellen was blind. He misjudged urgency at the start of the financial crisis, while the new Fed chairwoman missed the biggest housing bubble ever concentrated in her neck of the woods. Imagine leaving your house today and you happen to notice a beanstalk in your front yard, which went up and up and up until it reached the clouds. Would you hop in your car or would you call your son, Jack, to find out what happened on his visit to the store?
I happen to believe Mark Twain was on to something when he said, "All you need is ignorance and confidence and the success is sure." In fact, it's truer now than ever before. One has to be ignorant about the statistics, the critics, and the overall economy, and go out there and make it happen. Confidence has to come from knowing you will do the work, make the sacrifices, and find the answers. The fact of the matter is it has been a long time since America has felt this way. The nation never recovered from the tech bubble implosion, even as the housing bubble made everyone feel a little better. Ironically, the Dow came all the way back and established new highs, without any fanfare.
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