Preventing the Last Crisis
Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments. A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders. So, too, a curious skepticism produces etched forehead lines and nighttime bruxism.
The terrible scourge of bruxism and its potentially terrifying consequences. Curious skepticism can lead to the darnedest things, which is why Big Brother strongly recommends that citizens remain in a medication and cable TV-induced apathetic stupor. To make this happy outcome easier to achieve, stagnation in real wages was successfully introduced a number of moons ago; forced to work to exhaustion just to keep their heads above water, citizens tend to be more docile in their shrinking free time. [PT]
Nonetheless, these are small prices to pay for the simple delight that comes when a central planner opens their mouth and inserts their foot. Last Friday, for example, Fed Chair Janet Yellen gave a speech to her friends and cohorts at the annual central banker’s powwow in Jackson Hole, Wyoming. There she patted herself and the financial regulatory community on the back for what she believes has been a successful execution of financial regulations:
“The events of the [2008] crisis demanded action, needed reforms were implemented, and these reforms have made the system safer.”
How Yellen knows the reforms have made the system safer is unclear. Like France’s impenetrable Maginot Line, the regulations Yellen lauds are backward looking. They are suited to preventing the last crisis while ignoring new and greater threats amassing just beyond the horizon.
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