Wednesday, March 18, 2009
A day at the Fed.
The Federal Reserve of Richmond recently had "A Day at the Fed" where they invited university professors and their students to come and listen to presentations by the staff economists and discuss the economy and the current state of monetary policy. Here I am with two of my best students, Paul Dohse from Germany and my grad assistant Christian Walker. These are invitations you do not turn down. I am still trying to get my mind around the fact that one economist told the crowd "we did not have a housing bubble...it was a housing boom but not a bubble." I said to Paul and Christian, "A boom? Yes, a KABOOM!" But when the same guy followed it up by saying no one could have seen this coming, I said "come on boys...time to go home."
We also had a nice visit with Fed of Richmond President Jeff Lacker. He said much the same as he does at the link below. He is right...Federal Reserve independence has been severely wounded and this cannot stand. When we turn the corner, the crumby assets on the Fed's balance sheet need to be peeled off to the Treasury where they belong.
Here is Chairman Bernanke's take on what you just heard:http://blogs.wsj.com/economics/2009/03/03/bernanke-disputes-lackers-fomc-dissent-rationale/