The Fed's Latest (and Totally Unlikely) Critic? World Bank's Zoellick



No way, someone please pinch me as this cannot possibly be real.

WSJ's Real Time Economics:

“Central banks failed to address risks building in the new economy,” Zoellick says. “They seemingly mastered product price inflation in the 1980s, but most decided that asset price bubbles were difficult to identify and to restrain with monetary policy. They argued that damage to the ‘real economy’ of jobs, production, savings, and consumption could be contained once bubbles burst, through aggressive easing of interest rates. They turned out to be wrong.”

Zoellick is a veteran U.S. economic-policy official who served at the U.S. Treasury from 1985 and 1993 where he was, among other posts, deputy assistant secretary for financial institutions policy under then Secretary James A. Baker III.

It is unusual for the head of an international organization like the World Bank to inject himself into the middle of U.S. bureaucratic fight. But Mr. Zoellick does just that, as he goes on to say that the Treasury, which is more accountable to Congress, should get additional authority to regulate big financial institutions, not the Fed.

“It will be difficult to vest the independent and powerful technocrats at the Federal Reserve with more authority. My reading of recent crisis management is that the Treasury Department needed greater authority to pull together a bevy of different regulators. Moreover, the Treasury is an Executive department, and therefore Congress and the public can more directly oversee how it uses any added authority.”


Wait a minute, what in the hell is going on here? Can anyone explain Zoellick's logic? Because as far as I am concerned, he's no better than the best of them and we all know what sort of cloth he is cut from. So what gives?

Apparently Zoellick's noticeably anti-Fed commentary was released ahead of time and available on the World Bank's website but the link listed on WSJ leads to a 404. Frankly, so does JDA's "financial bastard" decoder ring, sorry.

I do, however, know a power grab when I see one and I am not at all surprised to see Treasury call in a few favors as it presses for increased oversight over our little Fed friends, which means someone is feeling a tad butthurt about the fact that Treasury is little more than a money-laundering operation for US debt. Oh Timmy, don't you pf all people know what you can't fuck with the Fed and win? See also my September 23rd Fed to Treasury: Mind Your Own Damn Business for more LOLZ along these lines.

Personally I am thrilled at the idea of a bad guy showdown, which is why I suggested the following via Going Concern recently (and would like to take back the White House bikini car wash suggestion... realizing the Wicked Witch of the Far Left loves to get her face time, seeing Skeletor in a 2 piece might be too much for our delicate countenance):

FOMC cage match fights at Fedquarters - We’ve all heard about dissent at FOMC meetings but what if we kill two birds with one stone - bring new transparency to the monetary policy-setting process AND pull in $75 a ticket to see “El Jefe” Jeff Lacker take on “Helicopter Ben” Bernanke in spandex and Luchador masks? I know I would pay to see that.

Richard Fisher v Janet Yellen mud wrestling?

Tim Geithner v Chuck Plosser kung fu?

Think about it. Zoellick v Elizabeth Warren would be priceless. And pretty awesome. My money is on the prick with the silly moustache, sorry EW.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.

2 comments:

cjn said...

The World Bank makes the Fed look saint-worthy.

Natch.

AG