Let’s say you’re an elected official in the middle of a serious economic downturn. How do you maintain the facade that the course of action you’re undertaking is what the finest experts in the field recommend? Former bank regulator William Black provides a hint:
Geithner and Summers were selected and promoted, and the same is true with Bernanke, because they are willing to be wrong and have a consistent track record of being wrong. That’s useful for senior politicians but disastrous for the country.
Picking the right technocrats is very, very important. The right balance between expertise and ambition is all-important. Not enough expertise and they won’t provide the plausible deniability you need to be re-elected. Too much expertise might get in the way of what you want to do. The wrong amount of ambition and they might be too willing to to give you the bad news or, what’s worse, to make it public.
Hat tip: Mish
It should be noted that the policies Black mentioned (forcing FASB to alter the accounting rules to hide trillions in losses for the banks and many other financiers) are the same policies that Obama brags about every time he mentions the economy. He loves to mention how he rescued the financial system. He can’t mean the TARP, as that ws the work of the Bush Administration. He really means these bully-boy tactics used early in his Presidency to destroy accounting as a meaningful tool of business. He doesn’t like to mention the fact (which he may not understand) that the cost of bailing out his buddies on Wall Street has created more long-term problems for the rest of the US economy.