2:59 pm ET
Aug 31, 2012


The Jackson Hole Speech People Should Long Remember

    • Hayek was right. What the world is witnessing is "The Fatal Conceit", the idea that a handful of people can know enough to plan any economic outcome in which millions of people are making trillions of decisions every minute.....

    • Bernanke / Yellen can do only one thing, tax-people with inflation and give the freshly printed money to their chosen Banks.

      Freshly printed money will have 'value' only if people can use otherwise free resources, like Oil/Gas etc, and create products that sell at higher price than the cost of the raw material and labor.

      This is where Bernanke/Yellen are ignorant. Because Bernanke/Yellen do not understand Science, they are unaware that resources like Oil/Gas are no longer free, -they are costing more and more to dig up and process. Free money will only result in blowing Housing and Stock market Bubbles as well as inflation of Food and Fuel.

      Unfortunately, Bernanke/Yellen are in power and in charge of the printing presses. And most people are trying to get rich buying houses and stocks, ... so for now, Bernanke is the God (Obama is irrelevant).

      When the bubbles pop and inflation makes Americans even more poor, bin-Bernanke/Yellen will not come to their rescue :)

    • Again, I reiterate....Congress is supposed to be handling the Fiscal side of things. Our economy was never to stand alone on Monetary Policy. Fiscal Policy (Congress' responsibility) is the other leg. Unfortunately, Congress is going to have blood on their hands when they so foolishly fail in their responsibilities to lead, to legislate, to provide the backdrop for a successful monetary policy. We are witnessing the complete meltdown of society because of the ignorance and failure of these fools who have the nerve to call themselves congressman. Bernanke is not responsible for fiscal policy, congress is. Has no one taken any college classes in this country, that understands this? What a travesty we are experiencing.

    • Haldane's speech is a testament to the folly of our so-called modern administrative regulatory state.

      Unfortunately, its very existence is the raison d'être of one of our two major political parties; the conceit that regulators can and (morally) must control business has been a fundamental organizing principle of the Progressive Movement.

      Until economic regulation is de-politicized, our world will continue to become a more dangerous and less secure place for all who cannot participate in the state-sponsored crony capitalism that the regulatory state creates.

    • Too bad our former Princeton prof does not have courage to say that the economic depression is caused by government socialist policies and that the fed is impotent in affecting the economy.

    • Bernanke and Geitner are just campaigners for Obama. The data proves there is no upside to QE1, QE2 but the risks are immeasureable. The political pawn bank-the Fed-must be dismantled.

    • Bernanke is only trying to save corrupt banking system and government that is insolvent. Why more stress tests? Getting old. No way to fix it. Hyperinflation eventually.

    • Just as monolithic software crashes so does monolithic government. The banking system is only a symptom of a broken society. WW3?

    • He points out the difficulties and follies of complex regulation to control complexities of today's financial system succinctly, but I did not see what his solution is. He says simplicity, but does not spell out exactly. Simplicity is good and gets around the difficulties he points out, but blunt rules sometimes kill the goose, and it is all the more important to think through the rules very clearly.

    • As if the problem is the failure to print enough money under QEI and QEII.

    • Interesting statement of diagnosis. Sadly lacking statement of prescription.

    • Why do we have to relearn the rule KISS. Everyone knows what it means. And it includes making people feel the effects of their failure.

    • Agreed. But, like He!! the Financial Services lobbyists would ever let the re-introduction of Glass-Steagall be discussed in the halls of Congress! There's too much money @ stake. Can anyone comprehend what a reintroduction of Glass-Steagall would look like? B of A and Merrill...Divorced. JP Morgan - No more Chase relations. It would force HUGE breakups the would be considered "conflicts of interest" under Glass-Steagall. Personally, I think it would be a huge victory for Main Street... but a politically impossible one. Thanks Phil Graham.

    • Informative story. Thank-you with writing the story.

      What over site would be appropriate. It is in people's DNA when there are issue which effect people....."There ought to be......."

      What should be done? What would be the consequences?

    • The essence of Mr Haldane's speech is that we do not know: it would have been overweening of him to prescribe. A reasonably simple inference from his speech is that, as the market will always be turbulent and financial crises will never cease, the buyer should always be wary. Here, as quite often, the need is less for new wisdom than to remember old.

    • Friday: Federal Reserve Chairman Ben Bernanke spoke at today’s Jackson Hole conference, and sent markets "surging". Thursday: markets "tumbled" What a bunch of nonsense!!

    • If he's not willing to prescribe, why describe?

    • Last year that speech would have raised the dow 280 points.

    • Haldane is absolutely right! By accepting to engage banks through complex regulations, the regulators are no longer regulators, but risk-managers… and that does not make any sense, as a regulators prime responsibility is to prepare itself for when risk-management fails.

    • To return to sanity simply ban any computer algorithm outcome that cannot be accurately understood by the regulator (need competent regularor!). This may even divert the banks back to their job of supporting REAL economic growtth.

    • Haldane is correct. The Brits have banking down to a science better than we do and realize real jeopardy.

      Inflation just took off again. Pumping money into the economy always costs me and I am tired of it. It gives the government and banks the value that disappears from my dollars. If I am gonna get screwed, I at least want to be kissed first.

    • Haldane

    • I argue that being simple is not enough. Haldane rejects game theory without suggesting any similarly powerful theory to replace it. It seems to me that the problem has not been with game theory as such, but with its chronic misuse within economics. http://djmarsay.wordpress.com/2012/09/02/haldanes-the-dog-and-the-frisbee/ . Maybe we need a fresh look at the issues?

    • Andy Haldane hits the nail on the head in his Jackson Hole "Dog and the Frisbee" speech. He makes every point that ICBA has been making for years. Community banks stagger under unrelenting regulatory burden because of the ever continuing concentration of assets into fewer and fewer hands. Too big to fail creates over regulation and regulatory complexity. Unfortunately, that complexity and burden does not fall equally on all financial firm's shoulders - the community banks stagger under it the most - hence the continued consolidation of the industry that feeds concentration and "TBTF". It is exactly what Haldane points out that has driven certain leaders in Congress and respected financial thought leaders to call for the break up of these financial behemoths into more manageable parts. We will continue to be crushed by regulatory burden and complexity until the accronym "SIFI" is irradicated from the financial lexicon.

    • Big banks like big regulations because they can manage the complexity and the lobbying. Upstart competitors are less able to. This is merely another good case for bringing back Glass-Steagal legislation.

    • Mr Haldane is championing a modern view of complexity, systems with massive feedback and unpredictable interactions, that is in direct opposition to 19th century Marxism and 20th century Fascism — complex systems like jungles, anthills, economies and the weather can emerge from simple rules but exhibit daunting diversity and complexity. The Progressive Agenda, just like the rancher that takes a swath of the Amazon to graze cattle, finds that in a few years poor soil that once harbored thousands of species, when planted with a regulated scheme (grass) to feed cattle, becomes a desert in short order.

      Wilson, Roosevelt, Johnson, Obama (with the intervening help of many Republican Presidents) have created a monolithic regulatory apparatus incapable of providing stability or security for markets. Adding thousands and thousand of pages of laws and regulations only embrittles the system and increases costs.

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    Karen Damato
    Deputy Editor,
    Personal Finance


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