by Simon Black: Boots
on the Ground in Fukushima, Japan
is the most dangerous woman in America right now. As an economics
professor at the University of Berkeley, she’s charged with
educating the next generation of productive citizens. She also formerly
chaired the Council of Economic Advisors under President Obama.
One would think
that a person with that level of influence would have a bit of sense.
One would think. Yet Romer rarely fails to disappoint.
In a recent
New York Times editorial entitled, “Dear Ben: It’s
Time for Your Volcker Moment,” Romer publicly tries to goad
Ben Bernanke into doing MORE to fight the great contraction.
enough that Mr. Bernanke has expanded the money supply by an amount
never before seen in the history of the world. It’s not enough
that he’s nearly exhausted every policy tool at his disposal.
It’s not enough that global confidence in the dollar is fading
Bernanke to take things to the next level.
In her editorial,
Romer draws comparisons to past economic difficulties and expresses
admiration for those who employed extreme tactics to deal with them.
She praises for FDR for abandoning the gold standard and allowing
the dollar to depreciate.
She also erroneously
recounts economic history, suggesting that Roosevelt’s actions
led to “the most impressive [economic] swing the country has
ever seen from horrible contraction to rapid growth.”
a bit revisionist. The Great Depression languished for years. And
years. Perhaps if we’re speaking in terms of a geological timeline
in which millions of years are a drop in the bucket, the recovery
could be characterized as a rapid ‘swing’.
to credit any economic ‘recovery’ on a policy of currency
debasement is simply idiotic. The path to prosperity is not paved
in paper currency, but rather hard work, productivity, efficient
capital allocation, savings, and technological innovation.
be credited with supporting any of these economic foundations. Yet
Romer holds him up as an example of grabbing the bull by the horns
and making the tough choices that led to an unequivocal recovery.