Two Disagreeable Questions for Ben Bernanke
By Arnold Kling
Because it was my daughter’s law school graduation, I heard this speech. I am surprised that a couple of bloggers linked to it, since Bernanke gave a personal talk, not a financial one. There was a large news media presence. What were they expecting–an announcement of a new interest-rate policy?
Bernanke and Krugman were in the same grad school class at MIT, I recall (I was a couple years later). As I read Geoffrey Miller’s Spent and learn about the Big Five personality traits, I can see that Bernanke has always been higher on agreeableness that Krugman or me. In the spirit of being agreeable, I only made small talk when I went up to Bernanke after the speech.
But if I had been true to my nature, I would have asked two questions.
1. Every week, it seems, the Fed and the Treasury ask for (or just exercise) new powers. Will we ever see agencies ask for less power? If not, what is the logical limit of this process?
2. Every policy move seems to transfer wealth to bank shareholders and managers from other constituents. How does it turn out that it is always in the public interest to do this? In fact, I just saw this and this.