The New Kremlinology: Hank, Ben and Shelia

Let’s just pause for a moment to notice how astonishing it is that we’re all now engaged in interpreting and predicting what the Treasury Department will do with the TARP. Apparently we authorised them to do just about anything they want with minimal oversight by the Democratic process. Except for Federal Reserve decisions on rate cuts, never before has the American economy hinged so much on the secret decisions of unelected bureaucratic financial experts.

It reminds us of nothing so much as Kremlinology, that school of thought dedicated to interpreting and predicting what the Kremlin meant by its statements and what it was likely to do in the future. Increasingly, the business of finance is arbitraging the actions of government rather than responding to investor and consumer demands.

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