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by dereg 1349 days ago
Bernanke has his fingerprints on every large central banks' response in the wake of the 2008 Global Financial Crisis. He flooded the system with liquidity to prevent what he observed in the Great Depression. Was he successful? Yes. We didn't suffer from a recession anywhere near the magnitude of the depression. Did you like how he did it and what happened as a result? I'm guessing you didn't.[1]

Part of the fun of economic and monetary history is following the umpteen competing explanations for recessions and bubbles and piecing together a mosaic of all that seems to make sense. Bystanders have the luxury of not writing those papers unlike academics, who often chain themselves to their own work/school of thought.

Every monetary theory is based on a very limited set of observations. Policies borne out of those theories are even more scarce. I don't expect anyone to be right or wrong all the time. In my opinion, the best way to understand economics is to have a base set of principles and be theoretically promiscuous.

[1] I tend to be a free market fundamentalist so I didn't like it either. That doesn't mean it didn't work.
1 comments
dmichulke 1348 days ago
> Was he successful? Yes. We didn't suffer from a recession anywhere near the magnitude of the depression.

So he diagnosed the problem, set the goal (avoid recession), and the time frame (no immediate recession) and judged his success (no recession so yesss!).

Sounds a bit arbitrary to me, especially as now it becomes evident even to his disciples (Yellen, Kashkari, Powell) that the thing was merely postponed and aggravated.

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AnimalMuppet 1348 days ago
Given that the alternative was immediate recession (or worse, immediate collapse), a recession 14 years later is a win.

And, aggravated? You think the recession now is worse than what we would have had in 2008? I'm pretty sure you don't remember 2008 very accurately. Bernanke short-circuited a hurricane then, and you're complaining that it spawned a tornado 14 years later. Yes, the tornado is damaging. No, it's nothing like the hurricane.

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