Please, Just Don't Call Greenspan or Bernanke Masterminds

So I’m on this mailing list for quants at Wilmott. The folks at Wilmott are interested in personality types working in quantitative finance. I took the test. It was spot on for me. I’m considered “rational”. There are subtypes. Here is my subtype. The description does contain a lot of puffery designed to boost your self esteem. They don’t mention any nasty famous people who were the same type as me, or for any other type. It’s like the Lake Wobegon of personalities. That said, some of the non-puffery stuff was pretty accurate.

At any rate, that’s not what I was writing about. What caught my eye was when I clicked on other so-called rational types — in particular, masterminds. I couldn’t help but notice that in the pictures at the top of the page were Greenspan and Bernanke. I then read the text, which described their personality type. It contained this laugh-out-loud gem, “Masterminds are head and shoulders above all the rest in contingency planning. Complex operations involve many steps or stages, one following another in a necessary progression, and Masterminds are naturally able to grasp how each one leads to the next, and to prepare alternatives for difficulties that are likely to arise any step of the way. Trying to anticipate every contingency, Masterminds never set off on their current project without a Plan A firmly in mind, but they are always prepared to switch to Plan B or C or D if need be.”

Always prepared for every contingency? Are you kidding me? It was Greenspan who had no Plan B if his ultra-loose monetary policy in 2003-2005 created unintended consequences later. What we got was a global asset price bubble that drove up house and commodity prices worldwide. It was Greenspan and Rubin who had no Plan B if their obstruction of regulating derivatives in 1998 had unintended consequences later. What we got were leverage ratios that stagger the mind in their scale. Perhaps if we had had people in positions of power who actually did have a Plan B for what to do if they were wrong, we wouldn’t be in this mess.

Comments

[derryl:]

If we want to understand the agenda we should observe the actual results produced by mastermind policies, rather than listen to what they say they're trying to accomplish. These people are the opposite of stupid.

2008 Dec 02 08:56 AM

[carolinacoast:]

These people are the opposite of stupid? What???

Anyway, this article might be a bit late. I think people have already question Greenspan's approach (including Greenspan, himself). Bernanke is just another product of Bush. The man picks some winners. I want to thank everyone, including the Supreme Court for giving the White House to W. GOOD JOB. Kids, please stay in school.

2008 Dec 02 09:07 AM

[chinooking:]

throw the mf geniuses in jail

2008 Dec 02 09:49 AM

[axelrod608:]

And the "fools on the hill" - Congress - still haven't figured out that the gobbledegook Greenspin was spouting was, in fact gobbledegook. Now they're listening to, and going along with the progeny of Greenspin. With "leadership" like this, there's no way out other than total crash.

This cast of characters exemplifies a group of eggheads I ran into in Universities that I used to call "educated far beyond their intelligence".

2008 Dec 02 10:34 AM

[Dr.Jackpot:]

I'm the same age as Greenspan. I thought a lot about it. Actually, they are masterminds. They were able to steal my life savings and do it legally. My interest on savings has gone from something I could live on down to nothing. This allowed government to borrow for nothing------meaning they could spend more and more. It also moved purchasing power from me (who earned it) over to younger spenders who haven't earned it. Taken as a whole this was (and still is) the greatest robbery of all time-----and legal. Nobody cared because the majority in the financial world were reaping the thieving profits. Greenspan was their hero.

2008 Dec 02 11:06 AM

[secmaven:]

The common wisdom that inflation is the debtor's friend is a lie. Deflation and zero interest rates is the salvation of borrowers like the US banking system and the US government.

2008 Dec 02 01:52 PM