Oh no! I’ve fallen behind in self-promotional blogging! If you missed last week’s episode of Free Will, I talked with Jeremy Lott about his new book The Warm Bucket Brigade: The Story of the American Vice-Presidency. This week, I chat with the estimable Kerry Howley about Obama, patriotism, and prostitution, among other things.
This morning on Marketplace, I argued that it’s misguided to blame the last Fed chief, or this one, for our woes:
The problem here isn’t that the guy in charge isn’t smart enough. The problem is that there’s a guy in charge at all. We’ve put a central planner at the beating heart of our market system, but we’ve known for decades that central planners rarely have the information they need, or the incentive to use it correctly.
If it all goes wrong for Bernanke, just remember: the problem isn’t the quarterback. It’s the rules of the game.
I’m off to the heart of the heartland for a few days, so blogging may or may not be light.
What does this mean? Are you a goldbug?
What does this mean? Are you a goldbug?
What does this mean? Are you a goldbug?
Will has given money to Ron Paul. He is obviously crazy.
Will has given money to Ron Paul. He is obviously crazy.
Will has given money to Ron Paul. He is obviously crazy.
That Marketplace post seems like it would have been the perfect opportunity to legitimately use the phrase, “Don’t hate the player, hate the game.” And then immediately regret using it, and try to delete it before anyone knows it was ever there.
That Marketplace post seems like it would have been the perfect opportunity to legitimately use the phrase, “Don’t hate the player, hate the game.” And then immediately regret using it, and try to delete it before anyone knows it was ever there.
That Marketplace post seems like it would have been the perfect opportunity to legitimately use the phrase, “Don’t hate the player, hate the game.” And then immediately regret using it, and try to delete it before anyone knows it was ever there.
Well, radio does make that significantly more difficult.
Whatever, Wilkinson.
Well, radio does make that significantly more difficult.
Whatever, Wilkinson.
Well, radio does make that significantly more difficult.
Whatever, Wilkinson.
Will,
Nice piece on Marketplace! But I do have two issues about it:
1) Wall Street’s behavior is not a good starting point to exempt Greenspan (whether he needs an exemption or not is a different issue). WS follows its own goals and, more to the point, its own incentives, which are likely at the heart of recurring pops. There’s herd behavior, there’s risk-underpricing, etc. NO evil, just the goal to make a profit and the incentives to push the system until it breaks. Part of the Fed’s job involves taking the info coming out of WS as an input for its own decisions (for whatever its own goals); processing it should incorporate knowledge of WS biases; and failure to do so is just that. So while I agree that criticizing Greenspan COULD be next-day quarterbacking, Wall Street inflating a bubble within his watch could either be damning (if he could have identified it as such) or neutral (otherwise) evidence, but not a basis for exemption.
2) Bernanke might prove a genius maverick or a total failure, but he CAN be evaluated on the fly GIVEN our current knowledge of econ and finance (which might need re-writing or not after the fact). It’s not fair to compare the ongoing commentary to next-day quarterbacking carried out on Sunday night if it’s based on “what we know.”
Now, having said all that. I *loved* your comparison of a central banker to a central planner. What’s your view of the Fed? I’d wager you think rate-targeting is bad. So a monetary rule plus the role of lender of last resort (under very fixed rules)? Or even less than that? No Fed at all?
Thanks!
Will,
Nice piece on Marketplace! But I do have two issues about it:
1) Wall Street’s behavior is not a good starting point to exempt Greenspan (whether he needs an exemption or not is a different issue). WS follows its own goals and, more to the point, its own incentives, which are likely at the heart of recurring pops. There’s herd behavior, there’s risk-underpricing, etc. NO evil, just the goal to make a profit and the incentives to push the system until it breaks. Part of the Fed’s job involves taking the info coming out of WS as an input for its own decisions (for whatever its own goals); processing it should incorporate knowledge of WS biases; and failure to do so is just that. So while I agree that criticizing Greenspan COULD be next-day quarterbacking, Wall Street inflating a bubble within his watch could either be damning (if he could have identified it as such) or neutral (otherwise) evidence, but not a basis for exemption.
2) Bernanke might prove a genius maverick or a total failure, but he CAN be evaluated on the fly GIVEN our current knowledge of econ and finance (which might need re-writing or not after the fact). It’s not fair to compare the ongoing commentary to next-day quarterbacking carried out on Sunday night if it’s based on “what we know.”
Now, having said all that. I *loved* your comparison of a central banker to a central planner. What’s your view of the Fed? I’d wager you think rate-targeting is bad. So a monetary rule plus the role of lender of last resort (under very fixed rules)? Or even less than that? No Fed at all?
Thanks!
Will,
Nice piece on Marketplace! But I do have two issues about it:
1) Wall Street’s behavior is not a good starting point to exempt Greenspan (whether he needs an exemption or not is a different issue). WS follows its own goals and, more to the point, its own incentives, which are likely at the heart of recurring pops. There’s herd behavior, there’s risk-underpricing, etc. NO evil, just the goal to make a profit and the incentives to push the system until it breaks. Part of the Fed’s job involves taking the info coming out of WS as an input for its own decisions (for whatever its own goals); processing it should incorporate knowledge of WS biases; and failure to do so is just that. So while I agree that criticizing Greenspan COULD be next-day quarterbacking, Wall Street inflating a bubble within his watch could either be damning (if he could have identified it as such) or neutral (otherwise) evidence, but not a basis for exemption.
2) Bernanke might prove a genius maverick or a total failure, but he CAN be evaluated on the fly GIVEN our current knowledge of econ and finance (which might need re-writing or not after the fact). It’s not fair to compare the ongoing commentary to next-day quarterbacking carried out on Sunday night if it’s based on “what we know.”
Now, having said all that. I *loved* your comparison of a central banker to a central planner. What’s your view of the Fed? I’d wager you think rate-targeting is bad. So a monetary rule plus the role of lender of last resort (under very fixed rules)? Or even less than that? No Fed at all?
Thanks!