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Thursday, March 19, 2009

Moron Hall of Fame: Steve Forbes

Steve Forbes calls for Bernanke's ouster for shrinking the Fed's balance sheet. Here read it. I am not making it up.


Phil Rothman said...

I nominate Mr. Forbes to serve as the next Fed chair. In that capacity, perhaps he could implement his long-expressed desire to return us to the gold standard, which was particularly helpful in the early stages of the Great Depression; see, e.g., B. Eichengreen's 'Golden Fetters' and

derekp said...

Awesome to see the opinion of the Great Dr Rothman on these very pages.

ArmChairEconomist said...

Doc, I think maybe you misread what Forbes was saying in regards to the Fed's balance sheet. Forbes said the Fed has been "shrinking its balance sheet by nearly $400 billion since December" exactly as your graph from the Richmond Fed displays. I think it is his contention that the Fed's balance sheet should either continue to expand or at minimum stay stable and not contract as illustrated in the graph. Regardless, his feelings on ousting Uncle Ben and returning to the G.S. is justification for his induction into the hall of morons.

Randall Parker said...

Hey Armie: You are a most valued and loyal visitor. I suppose the observation is fair enough. But wrong. What Mr. Forbes fails to see is that these are ENDOGENOUS drops in the balance sheet. What should Ben do take a gun and make people borrow? Of course not. Ben has long said the problem is not an absence of liquidity. If it was, then come and get it. The CPFF is wide-a** open as are currency swaps. Note most, if not all, of the decline is the CPFF and currency swaps. While we are at it add Donald Luskin to the Moron Hall of Fame . Maybe we can have a dual Chairmanship like the ECB. Two years with Forbes and then two years with Luskin.

ArmChairEconomist said...

Hey Doc - while we're at it we can appoint your "friends" Robert Mugabe as president and Barney Frank the congressional leader of our newly formed economic superpower. haha

TheGhostOfMalcolmStevensonForbes said...

Oh the irony, read this September quote from my eldest son:

Ben Bernanke comes out of academia, Princeton University. He studied the Great Depression, and his conclusion was that you just throw money at it, that you just keep printing more money and all will be well.

And that's why he once made the allusion that if anything, if all else fails, you just go out in a helicopter and throw out money. So they call him "Helicopter Ben."

For 13 months, "Helicopter Ben" has been throwing Federal Reserve money out, finally realized, with Hank Paulson, that they had to have a systemic approach instead of this ad hoc churning of the printing press, which obviously wasn't curing the crisis.