In economics. Hmm.
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Bernanke was a key researcher into causes of the Great Depression. This is well earned. He with others developed counter cyclical economics. In larger part with other theorists it might be claimed a war with China as she built up was avoided. Now in the aftermath it is getting too late in the day for China to fight us. China turned to production more than militaristic aims in the 2010 period ending up now without the water to expand her ambitions.
Arafart got a Nobel Prize. I donât think Iâd want one.
The Captain
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You and I do not need to worry about getting one. 
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I donât know why this is a hmmm. Bernanke got the job just before the great implosion, and worked his rear off trying to ameliorate the worst effects of it.
Were it not for him many of the {deleted} politicians who were calling for even more balanced budgets would have held more sway, and programs which helped reduced the impacts would likely have gone missing.
Yes, we all hate that he helped bail out the banks, but without that all else is fantasy. Meanwhile he argued strenuously for other bailouts and programs as helped saved hundreds of thousands of jobs in the automotive industries (among others); he advocated fewer tax cuts and more direct payments to get cash flowing in the economy, and a host of other things.
FWIW this prize is not for that, but for his study of banks, as in âWhy avoiding bank failures is vital.â I hope people pay attention. Bank failures are one of the biggest causes of economic failure, going back hundreds of years. 2008 was no different, just bigger.
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Goofy,
He failed to lead us back to Glass Steagall. The major banking failures are going to be more often in the wake of his tenure. We may see this globally in 2023 unless we are lucky because of lack of meaningful regulations.
He chose to act during the 2009 meltdown at twice the necessary cost to bailout the banks, approximately $4 trillion. If he had gone directly to congress for an income tax hiatus for homeowners to pay their mortgages and bills that would have cost $2 trillion and saved the banks. The people in his academic circles had studied doing this carefully.
The anger at what happened is justified. It may get interesting what is done if the banks meltdown this time. There wont be any excuses for bailing them out.
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Two thoughts:
A. Poorly run banks cannot be allowed to continue to be poorly run just to prevent failure. So there needs to be some level of bank failure.
- Because widespread bank failure is bad for an economy, they need to be regulated. Effectively regulated. I see the 2008 crisis as a failure of regulation as much as a failure of banks.
âPeter
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Didnât Dodd-Frank address this issue by requiring better reserves? Is more action needed?
Paul,
The risk to the entire system is on the investment banking side. Glass Steagall was a wall separating entities that had FDIC deposits from entities gambling in investment banking.
By 2008 the loans on the deposit side of the same house were securitized and being bought by the investment side of the house.
Captain, where u hanging these days? lost your addressâŚneed your input.
My anger was not so much that the banks got bailed out. My anger was that the people running the banks in such a manner to require bailing out largely kept their jobs. And that should not have been allowed to happen.
Agreed!
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Why should the shareholders be made whole at twice the needed cost.
The real anger was the bankersâ. Within months the bankers were spitting on the public as if we were the problem.
If this goes down again in 2023, the shareholders and managers need to be SOL!
I will agree with that. The fact so many people, not just the bankers, were saying the real problem was the people taking out the mortgages was deplorable. Risk management at the banks should have known better. Loan underwriters should have known better. The people bundling the securities should have known better.
But why at twice the cost? You know the answer to that. Welfare to people is frowned upon. Welfare to JCâs is worshipped.
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Bond rating agencies should have known better but rated them AAA on the theory that real estate recessions were regional and unlikely to spread across the country.
No doc loans were the ultimate crime. People could issue them and sell them quickly earning commissions and passing on the risk to the unsuspecting. Why not make money while you can? Does business require ethics and common sense? Or does greed prevail?
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Its like that line in the movie âThe Big Shortâ:
âWhy are they admitting to what they did?â
âThey arenât admitting, theyâre braggingâ
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Theory? More likely a case of (hardly) plausible deniability. The AAA ratings were chiefly fueled by someone paying for such ratings, and the desire to keep the good times rolling. When push came to shove, the way out was for the rating agencies to claim their ratings were to be considered âfree speechâ rather than professional advice.
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Truth is they all did know better. But it is interesting that sounding off as all knowing bigshots is not thinking. Very few of them were thinking. Fewer yet were ethical. We are talking wall street small w.
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