Matt Yglesias asks the question and assembles some evidence. The two modern conservative presidents, George W. Bush and Ronald Reagan, “both presided over massive increases in both present and projected deficits.”
Yin/Yang at the Federal Reserve
March 22, 2010 By 3 Comments
Several months ago I supported Ben Bernanke when his re-nomination as Chairman of the Fed came under fire. While others such as Simon Johnson called for his removal, I wrote that I instead wanted to see more focus on systemic incentives. Put a bit differently, I believed we were being more reactive in our approach to the financial crisis than pragmatic about how thousands of mostly well-meaning citizens — both public and private — could have made such collective decisions as led to collapse.
This remains a key issue in need of attention, and it requires deep thinking about whether assumptions used to pass legislation over the past 40 years still hold.
An Adversarial Relationship…The Missing Ingredient?
December 23, 2009 By 7 Comments
It is neither controversial that mistakes were made leading into the crisis nor that the Fed bears much responsibility. That said, I’m unclear the institution (or Bernanke) deserve such aggression as demonstrated in this article.
Instead of focusing on the Chairman, I’d like to see more interest in the system-wide incentives that drive the current structure. Arguably, almost anyone could have been chairman and the results would have been the same (or far worse).
Debating a New Role for the Fed
December 21, 2009 By Leave a Comment
CFR staff writer Roya Wolverson with a terrific overview of the debate.
Debating a New Role for the Fed
Author: Roya Wolverson, Staff Writer
Introduction
The Fed Can Help, But Fiscal Policy Is The Key To Job Creation
December 18, 2009 By 4 Comments
Thoma is right on the money — quantitative easing is a rare beast to begin with and monetary policy is a blunt instrument. I’ve already engaged the possibility that Fed “Independence is a Red Herring.” At very least, critics can and should look for job creation elsewhere.
A downstream speculation of this debate: is the Fed in the right business with a dual mandate? Full employment seems by definition politically charged — price stability is a more refined mandate for the Fed toolkit.
The Fed Can Help, But Fiscal Policy Is The Key To Job Creation
By Mark Thoma | Dec 18, 2009
Fed “Independence” is a Red Herring
December 15, 2009 By Leave a Comment
While I’d not go so far as the author in saying the Fed has done a terrible job (it truly hasn’t), I’ve already alluded to somewhat comparable questions about the Fed’s dual mandate. Whatever the structural considerations are, evidence has mounted that the FRB is not as independent as proponents claim.
Whether or not this is a good thing appears open to debate. Are independence and accountability somehow irreconcilable?
I don’t like political influence affecting my monetary stability but it seems that ship may have sailed.
Fed: Bubble Fighter?
December 2, 2009 By Leave a Comment
I’m concerned this debate may be reactionary in nature. Treading controversial ground, surely…
Fed Debates New Role: Bubble Fighter
Not so long ago, Federal Reserve officials were confident they knew what to do when they saw bubbles building in prices of stocks, houses or other assets: Nothing.
Now, as Fed Chairman Ben Bernanke faces a confirmation hearing Thursday on a second four-year term, he and others at the central bank are rethinking the hands-off approach they’ve followed over the past decade. On the heels of a burst housing-and-credit bubble, Mr. Bernanke now calls financial booms “perhaps the most difficult problem for monetary policy this decade.”
Nitpicking a Fed Chairman
November 29, 2009 By Leave a Comment
Yves is terrific to read when she gets rolling — I’m not against Bernanke but I must admit:
- that he even felt compelled to write an op-ed is remarkable (Fed Chairmen historically do not do this), and
- he does lay it on a wee bit thick.
Bernanke Tries to Defend the Fed
In a sign that the Federal Reserve is circling the wagons, chairman Ben Bernanke has an op-ed in the Washington Post that attempts to defend the central bank’s role. What is interesting is how much the tables have turned. The Obama effort to make the Fed into the uber bank regulator has become a rout, with decent odds that the Fed will have its powers reduced, and an increasing possibility that Bernanke might not be reconfirmed (which is frankly the right outcome, no CEO who presided over a similar disaster would still be in charge).
Romer-Romer Squared
November 24, 2009 By Leave a Comment
An interesting take on the influential Romer-Romer criticism of the Federal Reserve. Either way it goes this is an important debate.
Jason Paez (