It often requires you to step back, pour yourself a double, go ride a motorcycle around, kiss a couple girls and watch some old school westerns and then revisit the problem in order for you to solve it or understand it. And one of the observations I've had as I've been out on long rides in the South Dakota Badlands is that our financial problems are caused by something that has been staring at us right in the face. Skim this little article here and see if you can see what I see.
What you SHOULD see (if you took Dr. Cappy's advice above and drove around after pouring yourself a double and kissing some girls and achieved a South Dakota epiphany) is governmental officials completely unaware they are stepping outside of their bounds. That they are putting themselves where they don't belong. And I'm not talking about forcing us to buy incandescent light bulbs, I'm talking they actually think it is government intervention that can affect stock prices when in reality the only thing that DOES affect stock prices is profits.
What kind of intrigues me is a guy like Bernanke should know this. Any economist, whether they are on the left or the right should at minimum have the intellectual honesty to know that tinkering with monetary policy is not going to have any kind of long term effect on stock prices. If anything it will hurt stock prices. Ergo what the heck is he thinking the central bank needs to take some kind of action? Since when is the fed chartered with the mandate to "increase stock prices?"
Stock prices will be, what they will be. They will be determined by profits of the underlying firms. Not whether the firm "goes green." Not whether they "celebrate diversity." And not whether the government does QE 46 and 1/2.
Regardless, the point is not necessarily this one particular instance of stupidity on the part of the federal reserve chairman. If you look at the entire effort politicians (primarily on the left) have resorted to, to get this economy going again, they are operating from the erroneous premise that somehow government can do something to help get the economy going again. Which is like saying a lamprey can do something to get a fish healthy again. Of course it will fail because the only thing the government can "do" is get out of the way and let the private sector grow again. However, what I'm seeing more and more is an ingrained psychology of government wonks and politicians that is something akin to women in my dance classes when they first start out. They think they can "do" something. Initiate some kind of action. "Help." When in reality "helping" or "doing something" is antithetical to the role women need to play in dancing which is the follower. Once the woman "does something to help" she unknowingly destroys the dance. But when the women realize how they have to follow (and men finally get the gall to lead which is nearly an impossible task sometimes), the dance works beautifully.
However, I highly doubt Obama and his ilk are going to realize they follow the people and not order them around.
On a side note, I think this old post of mine will come in handy given the general collapsing of or stock market and economy today.
In the meantime, you all know what to do today!
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