Hedging Against Looking Stupid

122854053_bernanke_388803cAmidst of world wide central bank efforts to keep stock prices elevated and moving higher, public figures especially current and past Federal Reserve Chairs are starting to comment that stocks are over priced. Remember these people all have genius plus IQs. The world is full of bright people doing stupid things. Why do smart people do stupid things? For one stupidity and intelligence are completely independent of one another. Stupidity is simply maladaptive behavior.

If a brilliant person wants something to be true bad enough, he will see it as true the same as will a moron. Chances are though Federal Reserve members are doing stupid things in keeping with the political agendas they are carrying out. Nothing is too stupid to do if personal gain is great enough. At higher levels economists get paid to lie so stupidity may not enter the picture. The price is right and accepting money is rational.

Still, the wealth effect that has been created never has had a prayer of benefiting the entire country. Do both Ben Bernanke and Janet Yellen really believe QE is a good deal? There is not a chance they do but you will never get an honest answer.

Just watch what happens. More and more statements will be of the kind that point to stocks “possibly being overpriced.” Look for others besides the Fed people to start throwing in their words of caution. Doing stupid things for profit is a whole lot different than doing stupid things because one is an idiot.

Expect more of these kinds of statements. They are hedges against looking stupid. Stupid for personal gain makes sense in a professional sense but no one wants to wear the label.

As for politicians, as the economy denigrates and the financial markets collapse, they will practice the art of not knowing. All will be innocent as in deprived of meaningful information.

Make no mistake. The Federal Reserve folks knew what they were doing.00_logo_1

(Visited 26 times, 1 visits today)
0 0 votes
Article Rating

About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
This entry was posted in Daily Comments and tagged , , , , , . Bookmark the permalink.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments