Dec
29

Mixing a Bernanktini

Part 2 of 3

By Katie Kieffer

Image credit: DiscoverMagazine.com

Image credit: DiscoverMagazine.com

I always invite TIME Magazine’s “Person of the Year” to my New Year’s Eve Party. Since TIME‘s award winner is typically a liberal or a misguided moderate, my hospitality affords me the opportunity to “convert” the recipient. 2009′s winner was Fed Chairman, Ben Bernanke.

Calculating conservative woman that I am, I asked Bernanke if he would not only attend the party but also be my bar’s lead mixologist.

Bernanke agreed to both requests so I asked him to stop by my house earlier this week so we could practice making the cocktails for New Year’s. I decided to show Bernanke how to fix our economy under the guise of a James Bond martini-making lesson. Here’s how I taught Bernanke to make a proper martini for my New Year’s Eve party and fix our country’s economy:

Many of you are familiar with James Bond’s insistence that his martini be “shaken, not stirred.” As Fine Cooking‘s Jim Meehan puts it, “Bond seemed more concerned about the temperature of his cocktail than its appearance; hence his unusual request. Let’s just say he was smarter about outsmarting the bad guy than he was about ordering a drink. You don’t have to shake a martini to get it good and cold.”

I handed Bernanke a martini glass, some Gordon’s, vodka, and Kina Lillet. Then I handed him a cocktail shaker. I said, “I know that you’re a smart man, Ben. You’re a summa cum laude Harvard grad! And so, when I see your tired eyes and watch the poor decisions you make, I think you’re the wrong man for this job. You seem better fit for academia than the real world and I’m going to try to inject some business smarts into you.”

Ben, I think your philosophy for ending the recession is as misguided as Bond’s philosophy for chilling a drink. Just as he thought the best way to chill a martini was to shake it, you seem to think that the best way to fix the economy is to “shake things up.” You told TIME that, “…when orthodoxy fails, then you need to try new things” (such as government bailouts and pumping dollars into the system).

Bernanke: Katie, you just don’t hold back, do you? Here I thought I was coming over for a friendly cocktail lesson and I find out it’s a bludgeoning session!

Katie: Oh, Ben, I like you. I’m honestly just trying to help you. I mean, I would want you to tell me the same thing if I were trying to do something I had no experience in, like coach football. I’ve read about football - and watched it from the sidelines – but I’ve never played the game – how could I be a coach?

You’re overseeing our economy after reading, writing and lecturing about economics at Harvard, Stanford and Princeton, but never actually running a real-world business. Your only business experience of note was waiting tables in a poncho at South of the Border in college! C’mon! You’re a brilliant man – completely qualified to theorize in a hypothetical vacuum but underqualified to make decisions about real-world banking or trading. You admit publicly that you did not anticipate this financial crisis. What kind of weatherman are you if you can’t predict the weather?

Bernanke: You are harsh. I did the best I could with the information I had. If I hadn’t intervened, the recession would be much worse.

Katie: Ben, you are taking this personally. I’m a logical person talking to you about the facts. You brought the Fed into the game in an unprecedented way, and the results include an inflating dollar, skyrocketing unemployment and frozen markets as community banks are locked up and hardpressed to provide loans to small businesses.  Even BARNEY FRANK – someone who bankers thought would never see the light of day – wrote a letter to you on Oct. 29, 2009 stating: “…one of the biggest challenges faced by community banks (but shared by all banks) is how to respond to the calls from Congress to increase lending to stimulate the economy and to work with troubled borrowers on foreclosure mitigation, while dealing with increasingly stringent directives from regulators that can preclude banks from doing just that.”

Bernanke: So, what are you recommending I do, Katie?

Katie: Here’s my suggestion, Ben. Start acting like the fiscally responsible Republican you claim to be. Stop subscribing to the hypocrytical notion that the government is “too big to fail” while cracking the whip on small bankers and investors. Stop your printing press that’s turning our dollar into junk money. Capitalism, innovation and entrepreneurialism will create jobs in this country, not the Fed.

Here’s a secret of mixology: You can create a cocktail that is a drink and a meal in one. You can create a martini and top it with a slice of thick, delicious bacon. Simply shaking the martini ingredients around won’t produce a slice of bacon. That would be magic. The only way to create the bacon is through wealth. I have to give you – my mixologist – the money to buy lots of bacon to top off the martinis for my guests. Likewise, our economy isn’t an inflatable money booth – you can’t just blow dollar bills around and expect consumer confidence to magically rise.

Humans aren’t perfect and humans run the Fed, so nothing that the Fed does will miraculously be more perfect than what the private sector – full of “greedy” capitalists does. The government is not going to fix things by running away from “orthodoxy” and the proven prosperity that capitalism creates.

Bernanke: Katie, I think you are a smart woman and I might even agree with you after a few of those bacon-topped cocktails you describe.

Katie: Ben, I knew you were reasonable. I’m going to name the cocktail a “Bernanktini” in honor of your New Year’s resolution to reduce the Fed’s power in favor of capitalism, innovation and entrepreneurialism.

Bernanke: Cheers!

4 Responses to “Mixing a Bernanktini”

  1. Default avatar MBerg says:

    “Making the Fed, an entity somewhat separate from the Obama administration, into a bunch of evil liberals conspirators makes no sense. It’s more likely they’re all looking out for one another’s power and wealth.”

    In a short-term sense, you’re right, A. From the business end, the Fed is pretty agnostic at this point.

    In the long term – as in, from its inception? It was (I’ll avoid “liberal/conservtative”) a interventionist strategy. I believe a close derivative of one of Katie’s points is that this intervention has had severe, “unintended” consequences on the market. For one thing, it’s built a couple of huge fiscal chokepoints that make the entire economy vulnerable to distortions, accidental or otherwise.

    We could go into which party is more prone to intervention, but that’d really just cloud the discussion, wouldn’t it?

  2. Default avatar aguy says:

    mmk Peyton, whatever your delusional rationale — your right, the bank-lovin’ Bernanke’s got to go.

    Your logic on this really confounds me. If Wall Street tries to maximize their wealth under a system de-regulated by folks like GOPer Phil Gramm, they are merely trying to get a competitive advantage. (I mean, even one your commenter’s favorite crack-pot Austrian School orgs blames Gramm.)

    People don’t suddenly become corrupt when they maximize wealth under what’s legal. There may be a moral claim that they’ve done wrong, but they won’t go to prison. However, when GOPers and Clinton got together to deregulate the financial sector, they were corrupt. They set up a system where incentives put money in too-risky situation w/o any moral hazard to CEOs, hid derivatives trading from the market, etc

    This sort of stuff was fully supported by Greenspan, Bernanke, etc. All these folks shuffle in and out of investment banks — both supposedly “corrupt” and not — setting up laws and regulations that benefit the investment banks over the broader economy. Even when we needed a bailout to fix the economy, we still didn’t get anything to prevent this in the future.

    This post (among others) strains to throw everyone into “liberal” and “conservative” camps. This is one example where such distinctions make absolutely no sense. No one at the Fed, nor their buddies at investment banks, cares about such things — they just want to line each others’ pockets. Making the Fed, an entity somewhat separate from the Obama administration, into a bunch of evil liberals conspirators makes no sense. It’s more likely they’re all looking out for one another’s power and wealth.

  3. Default avatar Peyton says:

    Katie, you drive home the important message that less government, not more, will help our economy grow.

    Bush appointed Bernanke the first time around, and Obama is the one who is keeping him here since he’s proven that he will worship at the alter of the government and dismiss the voice of the people. If by “Wall Street-loving,” “aguy” is referring to the corrupt and failing firms that Bernanke helped bail out with taxpayer money, he should use a different term. Not every firm or bank on Wall Street is a corrupt failure – in fact, the stock market seems to be the only place – other than gold – that people can put money right now since banks won’t lend: Bernanke’s Fed has imposed such strict regulations that nothing is happening. Gosh, Bernanke just LOVES banks, doesn’t he? Nope. Far from “favoring” banks, he’s just an Administration brown-noser.

  4. Default avatar aguy says:

    Yes, do away with the Bush-appointed, Wall Street-loving Bernanke. He’s favored the banks over the Fed’s mandate of ensuring employment for too long.

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