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Re: My God, you are an idiot.
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...an imagined scenario from a 2008 paper by Harvard University‘s Benjamin M. Friedman.
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“The overflow crowd packed into the Senate’s largest hearing room – not the usual home of the Financial Services Committee – fell into a hush as the Chairman of the Federal Reserve Board made his entrance and took the centre seat at the witness table, accompanied by all six of his fellow Board Members. The crowd had a sullen look. The Senators seated around the dais’s three tiers appeared angry.
The US economy had been spiralling downward for ten months in the wake of the mortgage market collapse and the steep decline in home prices. Two sizeable commercial banks and seven investment banks had failed, and many of the rest had had to raise capital on highly unfavourable terms. Investors in many uninsured financial instruments still could not get their money back. Not just home mortgage defaults and foreclosures but corporate bankruptcies too were running at record rates since the 1930s. Industrial production had declined 23% from the previous peak. With 26 million Americans now out of work, unemployment had reached 17% of the labour force. The committee’s chairman called the hearing to order, welcomed the witnesses, and sombrely invited the Federal Reserve chairman to present his opening remarks.
‘Thank you, Mr. Chairman,’ he began. ‘I am pleased to report that during the past year US monetary policy has been outstandingly successful. Overall inflation has again been exactly 1.5%. Prices other than for food and energy have risen by just 1.3%. My colleagues and I are here to accept this committee’s congratulations and those of the American people’.”
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“Such a situation is, of course, unthinkable,” Mr. Friedman writes.
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WSJ
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“It was fortunate that so few men acted according to moral principle, because it was so easy to get principles wrong, and a determined person acting on mistaken principles could really do some damage." - Larissa MacFarquhar
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