What Does That Mean?
This video is courtesy of CNBC, and it reports on Bernanke's confirmation in the Senate Banking Committee. While the video is just reporting the news, focus in Senator Chris Dodd's comments starting at the 50 second mark.
In explaining the past year, Dodd states that Bernanke's actions "prevented utter economic catastrophe". This may be true or not. Personally, I would argue that it is unlikely that one man could have such profound influence, and I am not here to argue the merits for or against Bernanke anyway. But what really gets my blood pressure boiling is when people describe the crisis of the past year with phrases such as "utter economic catastrophe", "economic collapse", or "we were staring into the abyss".
Can someone please explain to me what my world would have really looked like if there was "utter economic collapse"?
Can someone please explain to me what my world would have really looked like if the Fed actually did nothing?
Would the sun not come out the next day? Would I have not gone to work? Would I not try to do my very best like I do everyday? Would the power have been turned off in my home? Utter nonsense.
Honestly, please tell me what do those words mean, and why did we have to have a trillion dollar bailout? To "save" the economic system from "collapse"? Ughh. What does that mean?
The market was already off some 70% by the time the bailout arrived. The only thing different in my life was my 401K, and I was a lot better off than most.
And lastly, let me leave you with something else to think about: after a decade of easy money, bailouts and ultra low interest rates, the S&P500 is at a level seen over 10 years ago. A lot of up and down, but no real progress despite all the money thrown at the system to maintain the status quo and all in the name of "saving the economic system from utter catastrophe".
It is all nonsense!