Friday, January 22, 2010

If not Bernanke, then who? Volcker?

First I'd say, what's Jon Corzine doing these days?

I'm not actually that big on Volcker -- the knocks are that he signed up as a director for a think tank which was fighting the stimulus, and I believe he came out against a 2nd stimulus last spring. I'm curious what Volcker's position is on the Gagnon proposal, but he's got such a reputation as inflation hawk, and given that he was so anti-stimulus, I can't imagine he'd enact the Gagnon proposal as Fed Chair. He did a good job first time around, but the lessons from his first stint -- taking a hard and swift line against inflation to lessen the pain -- simply do not apply today...


  1. I didn't know Volcker had come out against a second stimulus (or did I?), but in November 08, I would've put Volcker in at Treasury because he is a) unconnected to this mess and b) highly respected and c) determined and d) not a fan of this 'modern economy' crap.

    I wouldn't put him in at the Fed because a) he's old and b) he's an inflation hawk, and we have plenty of those at the Fed. But a year's service at Treasury would work very nicely.

    Since Bernanke would still be on the board if he did not get reappointed as Chairmen (a point I forgot), I would replace him with Janet Yellen, Koenig (I think - the KC guy) or my oddball choice, Christina Romer. She's suited to it by the simple fact that she's studied the Great Depression as much as Bernanke and he would be in there with her. She is notably a Democrat and not involved in this mess. (The O administration has been sending her out there to do the talking in place of Larry & Timmy lately because she isn't 'infamous' and that's worked well enough for me to think she should just change buildings.)

    [After checking around] There are two vacancies on the board. If replacements have been queued up, I don't know who they are. But I'd make one Romer and the other Koenig from KC. And then I'd simultaneously appoint Romer as Chair. Bernanke, if not confirmed would stay on as Chair until a new Chair came in, and if he was absent, Kohn would become acting chair and Bernanke would remain on the Board.

    ['That would rebalance the board a bit.']

  2. think of it this way: its the playoffs, & ninth inning, bases loaded, and were just hanging on to a one run lead...we gotta bring in the closer...volcker...if we win this one, then anyone can start opening game next season...

  3. One of the reasons that Bernanke needs to be fired is because he is seen as essential by big players in the FIRE (Finance, Insurance, and Real Estate) market.

    We need to show those guys that we do not care what they think.

    Also, more important than economic philosophy, we need to put someone in who will not fight tooth and nail against openness and transparency.

  4. Bob Shiller for Fed Chair. I'd rather see Stiglitz or Akerlof at Treasury.

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