Watch What They Do
by digby
Kevin Drum points out something that used to be a matter of faith among the grubby bloggers like myself but which has gone into disrepute in recent years. In discussing Brad DeLong’s confusion about why Ben Bernanke has turned out not to follow the principles everyone assumed he had as an academic back in the 1990s and been much more aggressive in righting the economy during his tenure as Fed chief, Kevin observes:
In August 2009,[when he was reappointed by Obama] if you were someone who had never met Ben Bernanke, who had never been to Jackson Hole, who had never spoken privately with anyone of consequence in the economic community — in short, if all you had to go on was Ben Bernanke’s public action and public statements — I think you would conclude that he thought the economy was on the mend and had no intention of lighting his hair on fire over minor things like sky-high unemployment and trillion dollar output gaps. You would also, I think, conclude that he was still the same laissez faire Republican economist he has always been and had no real desire to seriously re-regulate the financial sector even after the biggest financial meltdown since 1929.
And guess what? You would have been right. I’d say that about 90% of the time, public actions and public statements are more reliable guides to reality than all the private conversations in the world. Unfortunately, the other 10% of the time they aren’t, and that 10% tends to be fairly dramatic.
And it’s important to also note that when Obama reappointed Bernanke, that action spoke loud and clear as well to those of us who weren’t in the know. It meant that he approved of Bernanke’s approach. It’s certainly possible that there was some other motivation — there is such a thing as palace intrigue — but for the most part it’s safer to assume that in a crisis a president isn’t going to appoint someone whom he thinks is making things worse. (If he does that, then we have even bigger problems.)
Kevin concludes that insiders are, therefore, gamblers who think they will get a big payoff for knowing things that others don’t. I don’t know about that, but I do agree that it’s almost always better to assume that the public actions, if not public statements, are more reliable guides to what political players truly believe than all the insider spin. The problem is that inside the Village, insider spin is currency and among political elites, inside information is their conversation. I’m not sure they even hear or see the public actions, at least the same way we see them out in America. It’s one big reason for the disconnect.
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