Jan 8, 2010
Rise of the Mathletes
In a recent column on the political blog The Hill, Sean J. Miller reports that Peter Schiff, along with pretty much every other warm blooded organism on Earth, has expressed nothing but disdain over Fed Chairman Ben Bernanke’s recent speech before the American Economic Association.
Basically, Mr. Bernanke insists that loose monetary policy was not responsible for igniting the housing mania because the mathematical formulas he is so fond of declare that not to be the case. It was the “savings glut”, that favorite bugaboo of his predecessor Alan Greenspan, which was the culprit.
While undoubtedly economic logic and history tell us that ramping up the supply of money and credit leads to speculative bubbles, one must keep in mind the type of mindset Bernanke possesses, a mindset that is a basic tenet of the AEA. His disdain for any belief in economic laws is part and parcel to everything the AEA stands for.
Formed in September of 1885 by Richard Ely and a bevy of other young American economists who had studied in Germany, the American Economic Association was specifically designed to be an American version of the German Historical School, a school of German economists who explicitly rejected any belief in economic law. Bottom line, both schools are an irrational welding of math onto the study of human beings.
Keep in mind when listening to Bernanke that the man is not an economist, he is a Mathlete, and the American Economic Association is not an economic organization, but a mathematical one.
Forgive them Lord, for they know not what they do.
Basically, Mr. Bernanke insists that loose monetary policy was not responsible for igniting the housing mania because the mathematical formulas he is so fond of declare that not to be the case. It was the “savings glut”, that favorite bugaboo of his predecessor Alan Greenspan, which was the culprit.
While undoubtedly economic logic and history tell us that ramping up the supply of money and credit leads to speculative bubbles, one must keep in mind the type of mindset Bernanke possesses, a mindset that is a basic tenet of the AEA. His disdain for any belief in economic laws is part and parcel to everything the AEA stands for.
Formed in September of 1885 by Richard Ely and a bevy of other young American economists who had studied in Germany, the American Economic Association was specifically designed to be an American version of the German Historical School, a school of German economists who explicitly rejected any belief in economic law. Bottom line, both schools are an irrational welding of math onto the study of human beings.
Keep in mind when listening to Bernanke that the man is not an economist, he is a Mathlete, and the American Economic Association is not an economic organization, but a mathematical one.
Forgive them Lord, for they know not what they do.