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Christina Romer 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.
It’s not 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 rapidly.
Romer wants Bernanke to take things to the next level.
The Politically Incorr...
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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.”
Swing? That’s 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’.
Furthermore, 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.
