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November 2008



Bernanke, Paulson Steps "Not Smart"

November 06, 2008 – Comments (0)

It does not take a Nobel Prize winning economist to point out that the bailout will not fix America's financial crisis, especially after every other economist not employed by the U.S. government already has. Many in the CAPS community arrived at that conclusion long ago. What does intrigue me about the following article, however, is the ability to compare our response to the financial crisis to another democracy with a non-interventionist central bank willing to allow failure. In no way am I suggesting that the American and Israeli economies provide an "apples to apples" comparison and I certainly wouldn't invest real money in a country with so many neighbors hell bent on its eradication, but I am giving a CAPS green thumb to EIS (iShares Israel Index) just to follow how the competing strategies play out. Another unmentioned aspect of the story is that Stanley Fischer, head of the Bank of Israel, was the doctoral thesis advisor to the one and only, Ben Bernanke. I'm guessing this is not one of those situations in which pupil teaches master.    [more]

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