Barry Ritholtz has been waiting around for the third anniversary of the publication of this remarkable document:
Barry Ritholtz: 2010 Reminder: QE = Currency Debasement and Inflation:
One of my biggest complaints about the media is the lack of accountability. People say things on TV in print an on radio, and then... Poof! No consequences. They influence public perception of issues, affect policy debates, drive legislation. This is a perfect example of a stern warning of currency debasement and inflation due to QE. Let me point out this was made 3 years ago today — hence, it has been terribly wrong. I won’t give you advice--but I keep track of who is consistently wrong, whose histrionic forecasts are both silly and wrong. Their future comments are valued accordingly.
Cliff Asness, Michael J. Boskin, Richard X. Bove, Charles W. Calomiris, Jim Chanos, John F. Cogan, Niall Ferguson, Nicole Gelinas, James Grant, Kevin A. Hassett, Roger Hertog, Gregory Hess, Douglas Holtz-Eakin, Seth Klarman, William Kristol, David Malpass, Ronald I. McKinnon, Joshua Rosner, Dan Senor, Amity Shlaes, Paul E. Singer, John B. Taylor, Peter J. Wallison, and Geoffrey Wood have considerable explaining to do.
And they have done none of it.
If any of them have made any attempt to mark their beliefs to market, or any attempt to explain why their assessment of the situation in November 2010 was so completely and totally wrong, I have not seen it. Neither has Paul Krugman. Neither have others that I have talked to. And we have all been looking. Hard.
So: Cliff: Did you actually invest your clients' money according to the predictions in that letter? If so, how are you still in business? Have you apologized to your clients for losing their money? If not, have you apologized to America for bullshitting us? How do you think differently about the economy today than you did three years ago? So, Mike: What were you thinking? How has the fact that you were so wrong led you to change your mind? And why haven't you written about how your mind has changed? So, Richard: Are you just a pure bullshit analyst--taking extreme positions in the hopes of getting press and paying clients? Or is there actually a reasoned view of the economy back there somewhere? So: Charlie: Same questions as for Mike. So: Jim: Same questions as for Cliff. So: Niall: WTF did you think you were doing? WTF do you think you are doing?...
e21 Team | 11/15/2010
To: Chairman Ben Bernanke
Dear Mr. Chairman:
We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.
We subscribe to your statement in The Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.
We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.
The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.
You would think that the Manhattan Institute would, to try to salvage its own credibility, have staged a big conference: "The E21 Team: Why Were They So Horribly Wrong?" But no...