Last Night with Bernie

Ben Bernanke, Chairman of the Federal Reserve Bank

by André Gayot


I don’t want to keep you awake tonight, but I have to report the conversation I had with the Chairman of the Federal Reserve Bank, Ben Bernanke.

– AG: Hi, Ben, how are you? Reading that low interest rates are responsible for the subprime disaster because people bought houses left and right that they could not pay for, I was wondering if the current very low rates would not give birth to another house buying spree and another bursting bubble.

– BB: Don’t worry; people are not buying.

– AG: But that’s not too good for the economy, because construction is its main driving force.

– BB: This is a transition period and we have other sectors that do well, like TV, where so much money flows to conceive and propagate electoral messages, mostly mud-slinging maybe, but a good sign if you consider that mud is an inexhaustible natural resource.

– AG: They say that to sustain the system, you and your colleagues in Europe print money galore. Is that innocuous in the long term?

– BB: Indeed we all have now considerable piles of bank notes here and there, and look, wonder, no inflation and we have avoided deflation, as well.

– AG: How come? Nobel prizes in Economy say inflation is what you get if you print too many bills.

– BB: Well, let’s enjoy the stability while it lasts. We will see.

– AG: No need to be Libertarian or a Tea Party member to accept the merits of free enterprise and the minimization of state in business, but I am baffled by the extraordinary performance of totally centralized, planned, and organized communist China, which from the top controls every single nut and bolt to be produced, every enterprise, every worker. Their economy, which leads the rest of the world, is about to overtake ours. Do they do things we don’t know, I mean other than oppressing their people?

– BB: The Chinese are different from us.

– AG: Take the French. They have the best longevity in Europe and 200,000 of them will reach 100 years in 2060, but they don’t want to work two years more over 60. What’s wrong with them?

– BB: We should drink more red wine and eat foie gras. As to the work question, the French have sociologists and other varieties of thinkers who have worked hard to demonstrate that work is not that good for you. As you know, these intellectuals have a strong following.

– AG: Economist P.A. Delhommais has computed that the average Chinese earns less than 1,000 dollars per year and that he saves about 15% of it to lend it to America. China is among the poor nations and USA among the richest ones. How come they have more money than us? What happens if they want their money back, or even worse, if they start buying a second SUV, a new 3-D HD TV, air-conditioners for their cellar, and a German coupé for their children and discontinue passing their savings to Uncle Sam?

– BB: I told you, the Chinese are different from us; they have a different way of life. Sorry, but now I have Mr. Cameron, the British Prime Minister, on the other line. He probably wants to talk to me about his austerity policy, you know, spending less money, cutting unnecessary expenses, stopping waste and those sorts of things. Bye, now.

P.S. I am not sure of the exactitude of all of the conversation, and I suspect it could have been just a bad dream.