Central Bankers Make Good Liars But Dallas Fed's Richard Fisher Isn't One of Them
Lest I be accused of showing blind favor toward my favorite Fedhead, I humbly remind dear reader that I've attacked Richard Fisher too, just not as frequently as I've attacked, say, Janet Yellen. Granted it was before he was my favorite but that doesn't matter, just be clear that I'm an equal opportunity Fedbasher. If he acts up again any time soon, I will be the first to lovingly bitchslap him down. Ask Richmond Fed's Jeffrey Lacker how it feels to get smacked down by a girl, he can tell you all about it (but rumor is he still hearts Jr Deputy Accountant). On second thought, don't ask him, he might still be hurt over being dethroned as my #1 (if we're talking hair, however, he'll always be my #1, xoxo).
Anyway, the point is that if they act up, I'll be the first to point it out. I think this analysis by Karl Denninger is just wrong. No need to get pissy:
Now this is amusing:
“I would have voted against QE2, had I had the vote,” the 62-year-old bank president said at the Frankfurt Finance Summit 2011. “We’ve done a bit too much.”
Ah, but he does have the vote now. And did he use it?
Nope. Last meeting:
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.
Let's be sure we are comparing apples to apples. If anyone is against QE 2, it's Richard Fisher. Voting to continue it is not necessary an endorsement. I love dissent in the ranks as much as the next Fedbasher but there is really no point to dissenting just for the sake of dissenting. Call me if they vote for QE 3 and Fisher says hell yes, then we might have a problem.
On March 7, Fisher gave a speech at the Institute of International Bankers Annual Washington Conference that went something like this:
I do not, however, feel that further monetary accommodation will speed the process. It might well retard job creation, should it give rise to inflationary expectations or, worse, imply that, having suffered the slings and arrows of popular and political contempt as we went about doing what we did to save the financial system, we have now been compromised and become a pliant accomplice to Congress’ and the executive branch’s fiscal misfeasance. I am wary of those risks. Indeed, as a voting member of the FOMC this year, I have made clear within the meeting room and in public speeches that, barring some frightful development, I will vote against any program that might seek to extend or enlarge the substantial monetary accommodation we already have provided, just as I argued against the $600 billion extension the voters on the Committee approved last November. And I remain doubtful enough as to its efficacy that if at any time between now and June, it should prove demonstrably counterproductive, I will vote to curtail or perhaps discontinue it. As I said, the liquidity tanks are full, if not brimming over. The Fed has done its job. What is needed now is for business to be incentivized to commit that liquidity to creating American jobs. This is the task of the fiscal authorities, not the Federal Reserve.
Given that context, where exactly is this big fat lie?
Granted, he did also have the large, low-hanging central banker balls to say in the same speech:
I happen to believe one of the best outcomes of the crisis is that the Fed demonstrated the importance of a central bank keeping its word. We said we would close the numerous emergency programs we engineered once they had done their job. And we have thus far done so. Imagine that: A government agency that (a) does what it says it will do; (b) actually closes down programs once they have served their purpose; and (c) not only does not lose taxpayer money in the process but makes a profit for the Treasury from it.
But we'll leave arguing about that for another day. A comment like that doesn't necessarily make him a liar, it just makes him good at his job. Unlike NY Fed's Dudley, who can't even get through an easy discussion without making himself look like an ass.
I'll let you know if I catch him in a lie. Don't think I'm not looking just because I like the guy, all's fair in love and Fedbashing.