Tuesday, May 1, 2012

Dallas Fed President Richard Fisher: Eat Your Vegetables

      This is the elevated terms which an inflation hawk thinks about monetary policy.

      "Fisher's opposition to further easing is rooted less in a conviction that the recovery has strengthened than in his long-held view that lower rates are doing little to boost jobs and may simply be giving Congress an excuse not to tackle the difficult job of reining in deficits and the national debt."

      It's not based on a conviction that the recovery has strengthened as he doesn't really care about that. Indeed, he may well agree with Tyler Cowen-that we are suffering the Great Stagnation. But what being a good Fed President means in Fisher's mind is doling out bad tasting medicine and telling us to "eat our vegetables."

     "By providing monetary accommodation, we are saying, in essence, 'Congress, you better eat your vegetables, or we are going to serve you a big plate of monetary cookies,'" Fisher said at a panel on job creation at the Global Conference."

    "The Fed's program of bond purchases is pushing down the price of debt, interfering with a pricing mechanism that would otherwise force Congress to come to terms with its "fiscal misfeasance," he said."

   "We have children in Congress," he said. "They need to be disciplined."

     Clearly there's nothing childish about this attitude. It seems that someone like Fisher imagines that whatever you don't want must be good for  you.  That's the mature attitude about these things.

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