Hey guys, Cub Reporter Ross Lincoln here!
Billmon, in characteristic form, completely sums up pretty much everything imaginably wrong with the current political/journalistic landcape, and how that failure has led directly to the mess we’re in now, organized around a discussion of the failure of the so-called marketplace of ideas to successfully police itself.
To make his point, he begins discussing the real estate bubble we’re currently deluding ourselves into believing will last forever, and during this discussion brings up my personal vote for Chump of the Century, Irving Fisher. Fisher got me thinking about a lot of things. Before I get to that, first a bit about him.
He was a remarkable intellect and inventor, having earned a fortune inventing the ultimate business cliche and early 80s Weird Al reference, the Rolodex. By the 1920s he was Yale’s Professor of economics, where he suggested or helped to foster an number of important concepts that are now taken for granted. He is also (or darn well should be) famous for saying the following:
“Stocks have reached what looks like a permanently high plateau.” - Yale University, 1929.
Check that date. He made this hilarious statement less than a week before Black Thursday. When all indicators were pointing towards “Freak the heck out”, he was more than happy to step up and make all the jerks screwing with the economy feel better about what they had done.
I can almost imagine Fisher, in a typical 1920s “Nyeah see?” voice, getting up in front of the plutocrats to say “Don’t worry about it boys, it’s all covered, see? I’ve got a bead on the moneyline pallie, and all signs point to pennies from heaven! We’ll be rich see, rich! 23 Skidoo!”
As smart as he was, (and he was that), he wasn’t so smart that he wasn’t also a complete blistering idiot. His fate, painful to read about, dripping in glorious schadenfreude and smothered in a glazing of dense irony, was richly deserved. For making such an insanely wrong assertion, in a period when a man of his prestige should have known better, he not only lost his entire fortune in the crash, but his reputation never recovered. To this day, at least among economists and history nerds, his name is a byword for hubris, and what Alan Greenspan later (and quite hypocritically, I might add) called “Irrational Exuberance“. It was a ruin so cliched that even John Grisham would blush, before writing it into his latest legal “thriller” and cashing his latest underserved million dollar check.
Go and read the article, and come back for more of my meandering warbling on this topic.
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