Dear Monetary Policy Observer,
With the confirmation of Janet Yellen as Chair of the Federal Reserve, the President has nominated Stanley Fischer for the position of Vice Chairman. A recent Forbes article by Ralph Benko praises Fischer’s past work advancing economic theory and the possibility for a game changing endorsement of the Centennial Monetary Commission (HR1176/S1895).
We hope you find this material of interest.
American Principles In Action
Dr. Janet Yellen now has taken over the chair of the Fed. And President Obama, to great acclaim, recently nominated Prof. Stanley Fischer as Vice Chairman. Prof. Fischer may be the most distinguished and beloved central banker at work within the world financial system today.
It is not often that central bankers find themselves beloved. Fed Chairman William McChesney Martin famously quoted a writer saying that the Federal Reserve is “in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.” Yet Fischer is beloved.
…Prof. Fischer managed (among many other accomplishments) the astonishing feat of fomenting some civility between the rival Fresh Water and Salt Water schools of economics. Such diplomatic finesse could prove valuable today in a broader, and far more significant, arena. There is rising impetus in the Congress, embodied by the Brady-Cornyn legislation to create a Centennial Monetary Commission (including one commissioner appointed by the Fed Chair), to take a cool headed fresh look at monetary policy.
It is designed to study empirically the economic outcomes produced, or portended, by monetary policy “based in discretion in determining monetary policy without an operational regime; price level targeting; inflation rate targeting; nominal gross domestic product targeting (both level and growth rate); the use of monetary policy rules; and the gold standard.” If questioned about this pending legislation during his confirmation hearings it would be excellent if Prof. Fischer will encourage the formation of this commission. This Commission is the vehicle by which the Congress and the Fed can, without in the slightest compromising the Fed’s independence, cooperate in the crucial matter of maximizing job creation and deficit reduction.
“Dogs bark,” Prof. Fischer. “But the caravan passes on.”