January of 2008, Bernanke said: “The Fed is not currently forecasting a recession.” The recession officially started one month earlier.
In late 2010, he gave a rare interview on the TV show 60 Minutes. During the interview, he said he was “100% confident” he would be able to conclude QE without market disruptions. Just the hint that QE would end send ALL the markets into a tailspin over the last week.
Conclusion: He is regularly wrong and he is arrogant about it. So why do we care what he says?
Frankly, there is a lessons to be learned.
- The man is using a flawed model called Keynesian Economics. It does not matter how smart the Ben Bernake is, a bad model will not yield good information. He learned the model at Harvard and it is admittedly very complex.
- Knowledge and experience without wisdom frequently leads to arrogance and error.