Federal Reserve chairmen think that they control the economy. They merely have to push button B and apply pressure P to level L, like a Rube Goldberg machine, and the economy will hum perfectly. Socionomic theory from Elliott Wave proposes that Federal Reserve chairmen are neither good nor bad but are perceived as incompetent or competent according to the social mood of the time. The first figure shown here shows our Federal Reserve chairmen and their eras. Changes of chairmanship have roughly corresponded to changes in social mood, and therefore of the stock market and then of the economy.

Our social mood follows a fractal pattern as manifested in the stock market, and there are similarities in form between what has happened in recent decades to what happened in the 1920's and 1930's. In the graph on the right, Federal Reserve chairmen from the first days of the Federal Reserve are mapped to modern era chairmen. Crissinger and Young presided over the 1920's boom, as Volker and Greenspan presided over the 80's-90's boom.

We see that Meyer was the unfortunate chairman presiding over the deflationary collapse of the early 1930's. If history rhymes, Bernanke, the tough-talking inflation fighter, could very well be managing a severe deflation, a battle he is ill-prepared to fight. Indeed, the Federal Reserve cannot fight it.