Managing the Economy

I read somewhere that Keynes hoped that someday the job of economist would be quite boring and quite normal. Basically, this guy, with his good understanding of macroeconomics would go to work (I guess at the Federal Reserve or other central bank) and adjust the appropriate knobs to manage the economy and then go home to his wife and kids.

Here's a list of Federal Reserve Chairman from Wikipedia:

  1. Charles S. Hamlin (August 10, 1914August 10, 1916) -- Chairman of the Board of Directors of the Federal Reserve System
  2. William P. G. Harding (August 10, 1916August 9, 1922)
  3. Daniel R. Crissinger (May 1, 1923September 15, 1927)
  4. Roy A. Young (October 4, 1927August 31, 1930)
  5. Eugene I. Meyer (September 16, 1930May 10, 1933)
  6. Eugene R. Black (May 19, 1933August 15, 1934)
  7. Marriner S. Eccles¹ (November 15, 1934February 3, 1948) -- first Chairman of the Board of Governors of the Federal Reserve System[2]
  8. Thomas B. McCabe (April 15, 1948April 2, 1951)
  9. William McChesney Martin, Jr. (April 2, 1951February 1, 1970)
  10. Arthur F. Burns (February 1, 1970January 31, 1978)
  11. G. William Miller (March 8, 1978August 6, 1979)
  12. Paul A. Volcker (August 6, 1979August 11, 1987)
  13. Alan Greenspan² (August 11, 1987January 31, 2006)
  14. Ben S. Bernanke (February 1, 2006 – )

So as you can see, Greenspan and Bernanke have been the Chief Economists of the United States (and by implication the world, I guess), since August 1987. Things were beginning to collapse a bit in 2006 but under Bernanke's management they have really tanked.

So ... if the Chief Economist's job is to move some knobs and manage the economy, and that's all they have to do, can't we say pretty definitively that both Greenspan and Bernanke have been horrible managers?

I mean, suppose they blame China for saving too much money, as they like to do. Well, isn't the chief economist's job to move the knobs to fix that? They can blame whomever they want but those two guys had their hands on the knobs. They must have moved them the wrong way - otherwise, according to their macroeconomic theories, all would be well, because that's all it takes to manage the economy.

Of course, I don't believe in their macroeconomic nonsense, but, I think, by their own standards, they should fire themselves, and then walk around in shame, because of the horrible job both of them have done. Don't you think?

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