Dallas Fed's Fisher on the Limits of Monetary Policy or, Alternatively, How to Verbally B*slap Washington
pic credit: Married to the Sea
Dallas Fed President Richard Fisher recently paid homage to being a cheap ass, free markets, and homicidal maniac Alan Greenspan, in that order. See The Limits of Monetary Policy: ‘Monetary Policy Responsibility Cannot Substitute for Government Irresponsibility’. The Manhattan Institute has video.
If he'd left out the part about Greenspan I may have liked it.
The thing I prize most about this facility [the Harvard Club of New York] is that the rooms here are cheap. As I did last night, I always stay in what used to be called a “dorm room,” one of the little rooms smack in the middle of this old building. These rooms are sparsely furnished, with only a sink and a bed and the smallest imaginable armoire jammed into approximately 130 square feet. I like them because there are no better-priced rooms in New York City. And because they are stone quiet. They are the only hotel rooms I know of in the city where the occupants cannot hear the grinding noise of trash trucks … when trash is actually being collected.Loved it up until the next part. Had JDA written that speech, the following paragraph would have been left out as it alienates Fisher from the fringe contingent that likes his shit and simultaneously can't stand Greenspan's:
I am especially honored that both the Manhattan Institute and e21 are sponsoring this speech today. Thank you, David [Malpass] for taking time out of your busy schedule to introduce me.
The Manhattan Institute and e21 are powerful proponents of the free-market capitalism that made our country the richest and the most successful democracy in the history of humankind. I took note of the institute’s claim on its website that it sponsors thinking “literally and figuratively outside the Beltway.” That’s a good thing. The Federal Reserve is structured to balance “inside the Beltway” influences with “outside the Beltway” thinking. The governors of the Fed, in Washington, are appointed by the president of the United States and confirmed by the Senate. The 12 bank presidents, like me, who operate the System in the field and also sit on the Federal Open Market Committee (FOMC) with the Fed governors, are not. Instead, we are selected by, and serve at the pleasure of, boards of directors drawn from the citizenry of our districts. In my case, the Dallas Fed serves 27 million people who populate 360,000 square miles of Texas, northern Louisiana and southern New Mexico and whose economic output exceeds Australia’s and is only slightly less than that of India.
On the policy front, the job of the Fed Bank presidents is to bring a Main Street perspective to the table. When I was asked by the Dallas Fed board to become president of the Bank, I then met with Alan Greenspan. I asked the Chairman how I could best serve the System. His answer was crisp: “Just speak to the truth,” he said.Greenspan also said "the true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake" and he's up to 145 casualties so I'm not sure if that's a conversation Fisher should openly admit he had with the guy.
Let it go. Fisher redeems himself, as usual, by shooting back at DC (not naming names because he's obviously classy but JDA is not so perhaps this is who he was talking directly to for one). He rails on the disconnect between Washington and business, a favorite theme of his:
I don’t believe this has much to do with the Fed. None of my business contacts, large or small, publicly held or private, are complaining about the cost of borrowing, the lack of liquidity or the availability of capital. All express concern about taxes, regulatory burdens and the lack of understanding in Washington of what incentivizes private-sector job creation. All are stymied by a Congress and an executive branch that have appeared to them to be unaware of, if not outright opposed to, what fires the entrepreneurial spirit. Many have begun to feel that opportunities for earning a better and more secure return on investment are larger elsewhere than here at home.I wouldn't say it doesn't have much to do with the Fed, at least as far as the precedent goes. Who handed over all that cheap money in the first place?