On National Public Radio’s Morning Edition today, the reporter David Kestenbaum took a look into a crystal ball for our economic situation.
That is, he reported on a computer model that was developed in the 1980s by Mark Gertler, now an economics professor at New York University, and Ben Bernanke, now the chairman of the Federal Reserve. Before becoming chairman, Mr. Bernanke had taught at Stanford University, New York University, and Princeton University. One of his academic interests — and we can hope he studied this one thoroughly — was the Great Depression.
It turns out that his work on the computer model is relevant today, too. “There are lots of models of various aspects of the economy out there,” says Mr. Kestenbaum. “This one is sort of unique because it was designed to incorporate the rippling effects of shocks to the financial system, exactly what is going on now.”
When Mr. Kestenbaum sat with Mr. Gertler and asked to the see the model, he was a little disappointed. Mr. Gertler showed him a series of calculations on paper and explained that they had left the programming up to some “highly intelligent and ambitious graduate students.”
“I was hoping for a sort of video game, like that Sim City thing,” Mr. Kestenbaum says. (Related tangent: Perhaps Mr. Kestenbaum, like many Americans, was hoping for some light entertainment to lift the financial gloom. NPR also reports today that video games may be playing the role once held by movies during the Great Depression. It’s good old-fashioned escapism, though instead of Shirley Temple in Bright Eyes, it’s carjackings and mayhem in Grand Theft Auto.)
In the middle of the segment, Mr. Kestenbaum asks Mr. Gertler the $700-billion question: “Does the model say that we’re headed for doomsday, unless something happens?”
There is an unnerving pause as Mr. Gertler responds: “Uh … roughly speaking, yes.” —Scott CarlsonReturn to Top