Blind Faith by Steven Romick

Blind faith has gotten us into trouble repeatedly throughout history. Just consider the rogue’s gallery of false idols, dictators, and charlatans we have followed, hoping for something different, something better. That misplaced conviction corrupts and destroys.

Daily life does require we put our trust in others, but we should do so judiciously. Each one of us has our circle of competence: performing brain surgery, hitting home runs, defending the accused in court or teaching high school math. However, doctors make mistakes and patients die, ballgames are lost on errors, innocent people go to jail and some students don’t understand division. In some cases, the fault is ours, for failing to consider that the people in whom we’ve placed our faith are incompetent, that the supreme confidence they have in their own ability is unjustifiable.

Which leads us to the blind faith placed in our current Federal Reserve Chairman Ben Bernanke. Mr. Bernanke told us in 2006 “that house prices will probably continue to rise,” and that he did “not expect significant spillovers from the subprime market to the rest of the economy or to the financial system” in 2007. In 2008, he then told us that Fannie Mae and Freddie Mac were “adequately capitalized (and in) no danger of failing” and that the “Federal Reserve is not currently forecasting a recession”. And, in 2009, he said “The Federal Reserve will not monetize the debt." A good education, deep experience, and a nice title don’t make you right. Our leaders in Washington seem to have recklessly accepted Fed decisions that threaten the delicate weave of economy and society.

Despite Mr. Bernanke’s poor batting average in predicting the future, his confidence appears unshaken. He continues to speak with the same self-assurance he always has, even though what he thought wouldn’t happen did, and what he thought would happen didn’t. He’s betting trillions of dollars that he’s right – counting on an academic argument alchemizing into reality. If Mr. Bernanke were experimenting in a medical lab, instead of a monetary one, the FDA would require extensive clinical trials proving safety and efficacy before he could release his grand experiment on the American public.

Mr. Bernanke skips ahead armed with his good intentions, despite many failed prognostications, but does concede that central bankers “have been in the process of learning by doing.” Perhaps, that’s another way of saying, “If at first you don’t succeed, try, try again.” If he’s wrong, our economy and possibly our society will suffer the consequences, unintended though they may be.