At the end of last month, the Brookings Institute hosted a conversation where one of their most distinguished current scholars introduced and interviewed one of their newest. The former was former Federal Reserve Chairman Ben Bernanke welcoming the latter, former Federal Reserve Chairman Janet Yellen. Listening to them talk was a total delight (thanks T. Tatteo for that), particularly for all the obvious things they almost certainly skipped over intentionally.

If you have the time, it’s worth it in the same way as it is to read through the 2008 FOMC transcripts. Should anyone really need to be convinced they really have no idea what they are doing, this is a pretty good opportunity. It’s one thing to hear about deep economic theory for what hasn’t happened yet; quite another knowing what did happen and how these two people more than any others in the world were supposed to have prevented it.

Instead, they remember 2008 a little differently:

And certainly, by 2008 and after Lehman, even though later on there was another surge in oil prices that took inflation up, we had a real economic situation that was simply becoming so dire that to my mind there was no question that that as the dominant matter of concern. And that if unemployment rose to the levels it looked likely to rise to, and I think we’re lucky it rose no higher than 10 percent, I think if you hadn’t done all of the interventions that you supported, god knows what would have happened to unemployment.

Yeah, no. The 2008 transcripts display a much different picture as to how officials really thought things were evolving particularly after Bear Stearns (a lot more cautious optimism than she seems to remember; they didn’t even forecast a recession in the Greenbook until after Lehman). If they really had any idea, why at the end of February 2018 is Janet Yellen congratulating Ben Bernanke for what amounts to “jobs saved” after the worst monetary crisis in four generations?

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