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D.C. to America: You Can't Handle the Truth

Posted Mar 20, 2009 10:21am EDT by Aaron Task in Media, Recession, Banking
Related: AIG, ^DJI, ^GSPC

FW: Post for Mauldin "TruthSince the financial crisis began in 2007, policymakers' message to the American people seems to have been adopted from Jack Nicholson's famous line in "A Few Good Men": You can't handle the truth.

John Mauldin, president of Millennium Wave Advisors, says there are two good reasons why Ben Bernanke, Presidents Bush and Obama, Treasury Secretaries Paulson and Geithner, and other luminaries haven't leveled with the American people about the state of the economy and steps being taken to address the crisis. And I'm not (just) talking about the AIG bonuses.

First, policymakers don't really have the answers. There "really is no playbook" for this downturn, says Mauldin, author of the popular "Thoughts from the Frontline" e-letter. He also worries the financial markets are predicated on academic theory that is faulty, and now policymakers are (effectively) trying to put Humpty Dumpty back together again.

Second, while pundits and analysts can afford to be "100% certain – and wrong" about what should be done, Mauldin notes policymakers don't have that luxury since their actions have real world consequences (intended and otherwise).

Both points resonate but that still doesn't explain the lack of candor about both the size of the problem and actions being taken to address it. Moreover, there doesn't seem to be anybody in Washington with the leadership skills of Chesley Sullenberger, the hero of USAir Flight 1549, as Henry Blodget notes in the accompanying video.

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