The World Bank has published a paper for G20 meeting that has very little room for optimism regarding the outlook of the global economy. In the light of this Ben Bernanke insisting that everything is fine and the US economy is all but recovered by 2010 starts sounding more and more like Walter Sobchak of the Big Lebowski when he tells the Dude who has just received a toe with green nailpolish in his mail that it is really no big deal:
Walter Sobchak: You want a toe? I can get you a toe, believe me. There are ways, Dude. You don’t wanna know about it, believe me.
The Dude: Yeah, but Walter…
Walter Sobchak: Hell, I can get you a toe by 3 o’clock this afternoon… with nail polish. These fucking amateurs…
Of course, it’s a tough spot. The stability of the banking system relies first and foremost in the level of confidence that people have in that system and that confidence (precariously short in supply at recent times) in turn relies in big part on the credibility of the central bank and the faith that people have in it being able to fulfill its role and functions. Now, you might of course ask what does THAT rely on. It could be something like actual figures from the economy along with different scenarios on how things might proceed. But what if those won’t provide much support? I guess then one must take the same view as an elderly lady from Stephen Hawkins’ book, who told a bigname scientist that he had it all wrong and that the world is really a flat plate supported on the back of a giant tortoise. When the scientist then slyly asked “And what is the turtle standing on?” the lady triumphantly replied: “You’re very clever, young man, but it’s no use — it’s turtles all the way down.”
This appears, by and large, to be a line that’s being taken by Federal Reserve as well as, to varying degrees, other central banks and governments around the world. The logic is very much the same than what led president Clinton to lie not tell complete truth about the nature of his relationship with one certain intern – if you admit being screwed you certainly will be, but if you deny it there still is a chance that everything might work out somehow. And if it doesn’t… well, then you’re screwed.
To which the Dude might say:
That’s a great plan, Walter. That’s fuckin’ ingenious, if I understand it correctly. It’s a Swiss fuckin’ watch.