In his essay on Philip Roth’s body of work (“Roth v. Roth v. Roth,” April), Joseph O’Neill noted: “Roth, though evidently blessed with decent health, has not enjoyed immunity from life’s distressing hazards, which in his case include a ‘crack-up’ in his mid-50s.”
There is an unfortunate biographical error in Joseph O’Neill’s essay about my work. He writes of my having “a crack-up.” The statement is not true, nor is there reliable biographical evidence to support it.
After knee surgery in March 1987, when I was 54, I was prescribed the sleeping pill Halcion, a sedative hypnotic in the benzodiazepine class of medications that can induce a debilitating cluster of adverse effects, sometimes called “Halcion madness.” At the time it was prescribed post-operatively for me by the orthopedic surgeon, Halcion had already been taken off the market in Holland, Germany, and elsewhere because of extreme psychological side effects leading even to suicide.
My own adverse reaction to Halcion, which corresponded to a clinically well-defined adverse reaction, one that has been exhaustively documented in the medical literature, started when I began taking the drug and resolved promptly when, with the helpful intervention of my family doctor, I stopped.
In a front-page story in The New York Times in January 1992, under the headline “Maker of Sleeping Pill Hid Data on Side Effects,” Halcion was characterized as “more dangerous than other sleeping pills and”—as I had discovered during the three months that I unsuspectingly took the drug—“more likely to cause symptoms like amnesia, paranoia, depression and hallucinations.”
New York, N.Y.
In April, Roger Lowenstein wrote about how widespread and vitriolic the criticism of Ben Bernanke has been, even though he saved the global economy—a point illustrated by the conflicting headlines on the article (“The Villain”) and on the magazine’s cover (“The Hero”).
Bernanke isn’t a villain; he’s not a hero. He’s just a guy trying to do a complicated, high-pressure job the best he can, making plenty of mistakes along the way. The Fed is attracting lots of criticism from both sides because it’s trying to play things down the middle … The Fed is the only major Washington institution that seems to be doing anything other than jockeying for position in the November elections. It’s actually trying to do something, with no help from the other major players.
Excerpt from a Fortune article
Bernanke may or may not have saved the global economy. However, one can see reasons to doubt he is a hero, without signing up for Rick Perry’s lynch party. When Bernanke became the Federal Reserve chairman in 2006, Alan Greenspan and Fannie/Freddie had already lined up the dominoes for the housing crash and financial crisis of 2008. I won’t second-guess Bernanke’s immediate actions in response to those events, taken under incredible pressure.
But we are now six years into the Bernanke era. We have learned that quantitative easing is Ph.D.-speak for “currency devaluation.” How you feel about that depends on which side of the game you are playing. If you are a retiree with a defined-benefit pension, or a saver with dollar-denominated assets, you don’t feel good. If you are a debtor with dollar-denominated obligations, you feel great. And who is the biggest debtor of all? The U.S. government. In 2011, the Fed purchased 60 percent of new Treasury issuance, while private and foreign purchases shrank. Bernanke’s policies have increased the federal deficit by propping up the market for Treasury debt.
Instead of an independent Federal Reserve Bank, we now have a central bank that operates like a branch of Treasury. To be a hero, Bernanke would need to restore the Fed’s independence, unwind its $1.6 trillion position in Treasury debt, and stabilize the dollar. If he did those things, he could be reappointed by a Republican president.
I think vilification of Bernanke by the right is based not on perceived harm to the U.S., but on unwanted benefit to Obama. Vilification by the left, I don’t understand.
The big end of finance, having won decisively in the global financial crisis, is in the process of rewriting history to suit its liking. The cover story in the current Atlantic… is a classic example of this type of revisionist history.
Excerpt from a Naked Capitalism blog post
The grim reality is that future generations will face escalating commodity prices and falling real incomes due to rising environmental and resource costs, especially energy. The solution is obvious: intensive government investment to prepare for a declining fossil-fuel economy, financed by high taxes or restrictions on the most affluent and on luxuries. You could have it all—productive work for everyone and a vast reduction in wasteful consumption. Of course the political resistance will be fierce from wealthy special interests, yet the opposition to plutocratic greed is growing.
The Fed could buy government bonds at zero percent interest to help jump-start public investment, while raising interest rates for private finance and refusing to participate in more Wall Street bailouts.
Lowenstein writes, “In the time of Nicholas Biddle, and even during the formative years of the Fed, banknotes, being liabilities, could be redeemed for something of value, usually gold. Now our dollars are exchangeable only for more dollars.”
This perpetuates a falsehood. The monetary value of any commodity is arbitrary. Gold has no more intrinsic worth than a pocketful of any sort of paper, except for its ability to be forged into something useful or decorative, and even those artifacts are worth only what someone is willing to pay for them. At this moment, in this country, an ounce of gold is worth a great big pile of dollars just because we have agreed that it is. When I was a child it was worth $35. Tomorrow it could be worth nothing; all we have to do is change our minds.
The invention of fiat currency was certainly based to some extent on understanding this, plus the fact that by concentrating upon this agreement itself, instead of upon some fictitious “real” value, the currency gains the ability to expand or contract as it needs to without any reference to such a base. Fiat currency has become as important to modern economics as Darwin’s work is to modern biology, or Einstein’s to modern physics. In practice, it runs into trouble only when the underlying agreement is stressed beyond its comfort zone and the currency becomes either overvalued (as in a recession) or undervalued (inflation). However, I think we can agree that reestablishing confidence in a currency, however difficult, is always easier than increasing the amount of gold on hand.
William D. Owen
Whatever your opinion of Bernanke, your opinion of The Atlantic should decline after reading this puff piece.
In her April column (“Europe’s Real Crisis”), Megan McArdle outlined how achieving economic growth will be tough, because no European country has a fertility rate high enough to replace its current population.
Megan McArdle clearly lays out demographics as one reason that economic growth is unsustainable. She then drops the ball magnificently when she asks, “Is strong growth still possible once the demographic dividend has been paid out?” Rather than run with the hard truth, she cops out with an unsubstantiated “Of course it is, at least in theory.”