Ben Bernanke Killed The World Economy

Perhaps the most likely competitor to Bernanke’s contribution as a destroyer of economic value is Maynard Keynes’ “General Theory.” It unmoored us from the established truths such as the Gold Standard and balanced budgets and enabled greedy and unscrupulous politicians to waste ever more of our money in the name of “stimulus.” The California High-Speed Rail scheme was just one $77 billion example of such folly; to misquote Oscar Wilde, a man would need a heart of stone not to laugh at its demise this week.

We do not yet know whether negative real interest rates or trillion-dollar budget deficits will be more ultimately destructive of our civilization, and Keynes, not Bernanke, is responsible for the latter. Unlike Marxism and like Bernankeism, Keynesianism has affected the entire planet; indeed, it seems irrefutable, the fallacy that will not die. However, Keynesianism’s effect on productivity is indirect; it merely grows government, a low-productivity activity, rather than destroying productivity directly. If I had to bet, therefore, I would bet that Bernanke, even more than Keynes, Marx or the inventor of agriculture, will be the chief destroyer of economic value in our long-term future.

By promoting ever-lower interest rates, set completely artificially by meddling bureaucrats, Bernankeism’s proponents have gone far to killing the engine of prosperity that is capitalism itself. Contrary to Keynes’ belief, the level of interest rates is the central variable in a well-functioning capitalist system. By meddling with it, politicians and bureaucrats are attempting to act as Gosplan, the central planning agency of the Soviet Union. It doesn’t work, and the attempt to meddle in this way is morally wrong as was Communism.

It is good to have some respectable academic backing for this column’s battle against the monetary folly of Bernankeism. The struggle continues!

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(The Bear's Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of "sell" recommendations put ...

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Gary Anderson 1 year ago Contributor's comment

#Trump's productivity growth is hardly normal. France has much larger productivity growth than the US. France! Trump is stuck in low productivity just like #Obama was.