Ivory Towers

It is unbelievable to me, but Myrdal-prize winning economist Paul Krugman simply doesn’t understand how banks work. As I’ve mentioned before, I used to work for a bank (a couple, in fact) and I am well versed in their operations. But I’m not an economist, of course, so I have to learn from practice rather than textbooks.

His (incredible) ignorance of the mechanics and accounting processes of banking are ably exposed here. The scary thing is, Bernanke probably studied the same books Krugman did and also fails to understand how the heart of the financial system operates. Which could account for a lot of things. Unbelievable.

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