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Bernanke contra Bernanke

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November 17, 2012 – Comments (6)

Robert Wenzel again with the scoop:

Back on Oct. 15, 2007, Bernanke said in a speech (my emphasis):

"Subprime mortgages originated in late 2005 and 2006 have performed especially poorly, in part because of a deterioration in underwriting standards."

You see...standards were too low. Anyone with a heartbeat was able to get a loan. We need tighter regulations and more oversight. Just give the authorities more power (and more time) and they'll fix this thing up. You watch.

Now fast forward five years to 2012:

"Bernanke: Banks' tight standards are hurting the economy."

You've got to be kidding me!

Now lending standards are too tight?!!


It's true, Yahoo
has it right here in black & white (my emphasis again):

"Federal Reserve Chairman Ben Bernanke said Thursday that banks' overly tight lending standards may be holding back the U.S. economy by preventing creditworthy borrowers from buying homes."

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Central planning doesn't work.

David in Liberty

6 Comments – Post Your Own

#1) On November 17, 2012 at 5:36 PM, smartmuffin (< 20) wrote:

Didn't Bernanke also say he expects Obama to fire him?

 Yeah, I'll start holding my breath on that one...

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#2) On November 18, 2012 at 3:41 PM, awallejr (83.97) wrote:

Amusingly he really is right with both statements.  In general the pendulum tends to swing to extremes and settling on the central only for a specific time just to keep swinging the other way.

And smart it was Romney who said that.

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#3) On November 22, 2012 at 3:06 AM, talotu (< 20) wrote:

Personally I think central planning *can* work, just not when it's bought. 

I think without central planning we most likely would have had overly loose standards in 2006, and overly tight standards now due to recency bias when people consider risk. The possibility of smoothing out this kind of effect is the most logical argument for central planning IMHO.

 If however you are pointing out that because the effects of 2006 and today are happening that central planning isn't working, or even make the statement that the effects of 2006 and today have been caused by central planning, then I'd wholeheartedly agree.

 The problem is central planning only works when fairness is in the best interest of the people doing the planning, which probably stops once you are planning for more than a few hundred people.

 

 

 

 

  

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#4) On November 23, 2012 at 11:10 AM, whereaminow (22.06) wrote:

talotu,

I feel bad for you.  Whoever educated you did not cover Mises' Economic Calculation Problem of the Socialist Commonweath.

Peruse my blogs and be enlightened. It's not a problem of being bought. The State has the most well armed and violent military in human history.  You're going to sit there and tell me that our poor, weak State can't tell the big bad greedy capitalists to leave them alone?

Are you outta ur f**cking mind?  Do you see what the American government is doing, dropping bombs on kids all over the world?  

Wake up dude. The State is f**king evil.

David in Liberty

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#5) On November 28, 2012 at 3:01 AM, talotu (< 20) wrote:

I've been "perusing" your blogs for the better part of two years now, as to who educated me I'd have to take that blame myself.

The implicaiton that our governement is corrupt because they don't have a choice was unfortunate, my belief is that the corruption is due to the fact that nobody in power cares about actually helping anyone other than themselves. 

Given the choice between a free market economy, or what we have today I'd choose the former without hesitation. That being said even if we had a lack of central "control" of markets, I expect there would still be times where a totally free market would find a local equilibrium point that is suboptimal. 

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#6) On November 28, 2012 at 10:59 PM, whereaminow (22.06) wrote:

talotu,

Sorry for being harsh on you :(

I read a few "Progressive" articles that day trying to blame every State war and violent act on businessmen corrupting everyone and it was annoying me. And I took it out on you.

My bad.

David in Liberty

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