Bernanke’s Fed doctrine is the Friedmanite branch of neoliberal monetary catechism.
Evidence
I have had some economists warn me that of course Bernanke had to say stuff like this: for the sake of political stability, he must hew to the party line in public. It is just the Fed Chair Pantomime. I find this implausible, for one major reason: every bit of documentary evidence points to the conclusion that Bernanke subscribes to one of the two major neoliberal catechisms on money. One, the one Bernanke rejects, associated with Hayek and the so-called libertarians like Ron Paul, is that the Fed is the devil, and that it should be replaced with free banking and pure market control. It would be a little hard to become chairman of the Fed while toeing that line, so Bernanke endorses the Friedmanite alternate: the central bank should be “independent” of all democratic control, preferably run by like-minded neoliberals, but only the market can recognize a bubble, so don’t try to rein in the speculators, but simply clean up afterward by lending freely to the rich people who created the problem in the first place. It is the old neoliberal two-step all over again: Rick Perry and Ron Paul can offer the groundlings red meat by threatening to beat up on Bernanke, and keep the base rabidly opposed to anything that looks suspiciously like the guv’mint; but the major players understand that they need Bernanke (or someone like him) on the inside to support their remunerative activities and ward off anything that smacks of nationalization. You can remain a neoliberal in good standing quite comfortably without subscribing to the free banking fringe, because you are useful. And it is the economics profession that makes the straddle work on a daily basis. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 521
Categorization
- XREF: Extends the ‘thought collective’ thesis: two competing neoliberal monetary catechisms (Hayekian free banking vs. Friedmanite independent central bank) coexisting under one umbrella. — connects to: Bernanke’s Fed leadership continued Greenspan’s market-discipline orthodoxy rather than repudiating it — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 501; Bernanke attributed the Great Moderation primarily to improved monetary policy — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 503; Friedman framed monetarism as value-neutral science rather than ideology — Jessica Whyte, The Morals of the Market: Human Rights…, 336 (+2 more)
Broader Connections
- Friedman framed monetarism as value-neutral science rather than ideology
#corroborates(0.85) — Jessica Whyte, The Morals of the Market, 336 - Reagan-era appointments turned the Fed into a channel for neoliberalizing economics
#expands(0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 529 - The Fed’s amnesty extended to shielding economic theory itself from blame
#qualifies(0.72) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 513