Ben Bernanke — the “expert” who got it all wrong
Extracted from an article by Steve Keen [1]
The only explanation that was consistent with Neoclassical theory was that “the gov’mint did it!”, and that’s precisely what Bernanke asserted. In a cringe-worthy speech that he gave at Milton Friedman’s 90th birthday party, Bernanke said:
“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again. (Bernanke 2002)“
Honestly, it makes me mad! Not only about how obsequious he was, but also because he was so damn wrong about what caused the Great Depression! Hyman Minsky got the cause right when he said that:
“the fundamental instability of a capitalist economy is upward. The tendency to transform doing well into a speculative investment boom is the basic instability in a capitalist economy.” (Minsky, 1982, p. 66)
And how much attention did Bernanke pay to Hyman Minsky? This is Bernanke’s entire consideration of Minsky in his book Essays on The Great Depression:
“Hyman Minsky and Charles Kindleberger have in several places argued for the inherent instability of the financial system, but in doing so have had to depart from the assumption of rational economic behaviour. [Bernanke’s Footnote]: I do not deny the possible importance of irrationality in economic life; however, it seems that the best research strategy is to push the rationality postulate as far as it will go.“
We therefore had someone in control of the Federal Reserve at the time of the Global Financial Crisis, who claimed to be an expert on the Great Depression, but in reality, had no idea of why it happened.
1. RWER blogs, Lars Syll – 25 Oct 2025
Source: https://profstevekeen.substack.com/p/gaslighting-us-on-private-debt
Prof Steve Keen is a distinguished post Keynesian economist and author, and is an ERA patron.
