Fortuitously, I was able to have a brief discussion yesterday with former Fed chief Ben Bernanke.
He is on a media tour for his new memoir, “The Courage to Act: A Memoir of a Crisis and Its Aftermath.” Bernanke was waiting to go on Fox business channel and I was able to have a few minutes with him.
Now in the book, which he gave me a copy, he says that more bankers should have went to jail over the 2008 financial crisis. But that presupposes that any went to jail.
I’m at a loss, and certainly not counting a lowly Goldman trader in London named Fabrice Tourre as an example of bankers punished.
I asked Bernanke in his wildest thoughts did he think the US would still be at zero interest rates in 2016?
“We did what we had to do.” came the well-coached response, but added he did not think the US would be at zero in 2016. I said “I beg to differ, but I realize you can’t say that.”
I then asked the last question. “Do you think the Fed’s and other central banks actions have perverted the market to the extent that many economic theories do not apply?”
He thought for a few and said, “The [economic] theories used were sound, but new thoughts will come out after the last eight years.”
And with that he needed to go.
From my perspective with QE and Twist and currency interventions on such a huge scale, I might as well throw all my economic texts in the garbage, because they presuppose free market capitalism, which is not what we have now.