« Voice (and loyalty) | Main | A theory of Fed announcements »
The best paragraph I read today
Do I belong in an insane asylum? Or should I be on the FOMC (with Hall, Thompson and Svensson?) Damned if I know. This blog is either grossly overrated or grossly underrated, but it ain’t average.
Posted by Tyler Cowen on July 3, 2009 at 02:10 PM in Economics | Permalink
Comments
The best one I read today is from a Washington Post flier:
“Interact with key Obama Administration and Congressional leaders . . . Spirited? Yes. Confrontational? No. The relaxed setting in the home of Katharine Weymouth assures it.”
Posted by: E. Barandiaran at Jul 3, 2009 3:07:39 PM
It is not clear why Tyler Cowen finds this paragraph to be so interesting. Maybe its the shocking acknowledgement of the authors complete bafflement regarding FOMC actions. This would seem a little disingenuous given that Sumner is a 20+ year veteran academic economist. Scott seems to want his readers to be shocked that the FOMC would announce one policy direction and than implement the exact opposite. I am shocked that he is shocked.
Even I, a former banker understand that the history of the FOMC is one of almost constant inconsistency between its actions and its words. Even a cursory review of the FOMC's history suggests that it believes its mission is to administer random financial shocks to the U.S. economy. Former chairmen have hinted at the idea that the FOMC's most powerful policy weapon is in fact its ability to "fool the market."
What is shocking is that an institution with this sorry history has survived for almost 100 years. Perhaps that was what interested Cowen. If the FOMC's actions are so baffling, perhaps its very existence should be challenged.
Posted by: Brian at Jul 3, 2009 4:14:43 PM
The best sentence I read today:
"Even a cursory review of the FOMC's history suggests that it believes its mission is to administer random financial shocks to the U.S. economy."
Posted by: Anonymous at Jul 6, 2009 5:32:06 AM
