Author Archive

No Matter Who Was in Charge, Just Blame the Fed

When I was SVP in charge of the Richmond Fed’s Baltimore branch and attended Maryland Bankers Association events, I always cringed when I was introduced, along with the state banking commissioner, as a banking regulator. She was, but I wasn’t. Our examination department was housed in the home office in Richmond and the branches were […]

Perception versus Reality–the Median versus the Mean

The post-election analysis on TV this morning included a brief discussion of the “disconnect” between perception and reality regarding the economy. The reality in the discussion was that incomes have been growing along with economic activity while the perception of many people is that they are losing ground. The discussants wondered why the perception was […]

Good Bye QE

I retired from the Fed on November 4, 2004, which will be 10 years ago in 6 days. At 8 AM tomorrow, I’m scheduled to give a speech on the economy after which I’ll have to give a defense of Quantitive Easing unless I try to preempt it during the speech. Texas audiences are polite, […]

More Investment and Exports in Second Quarter GDP–Just What We Needed

The writer, Gore Vidal, is reported to have said that he didn’t have much to say but he had lots to add. He was referring to his penchant for editing, rewriting, and subsequent drafts of his original work. That applies to the third draft of the second quarter GDP numbers released yesterday. The growth rate […]

The Timing Is About Right for King Dollar

Earlier in the recovery from the Great Recession, Larry Kudlow and most of his TV guests used to call for a strong dollar, ”king dollar,” in fact. A healthy economy needs a strong dollar. My response was that yes, in normal times, a strong dollar is good, but these aren’t normal times. We are trying […]

“Ignore the Low Inflation and Strong Dollar. The Experiment Isn’t Over Until Things Turn Bad.”

One of my favorite newspaper clippings is an op ed piece in the WSJ by Art Laffer in June 2009 predicting high inflation and interest rates resulting from the Fed’s easy money policy. The culprit specifically was the monetary base shown in an accompanying chart taking off like a rocket. I think enough time has […]

Money Hoarding

A recent piece published by the St. Louis Fed concluded that inflation has been low because of a sharp decline in the velocity of money reflecting money hoarding by the public. This conclusion got a great deal of attention by the talking heads on financial tv. The problem is that the conclusion is very misleading […]

Why Has the Texas Economy Outperformed? A Surprising Answer From Paul Krugman

Years ago, when I was still at the Dallas Fed and long before Governor Perry had become the longest-serving Governor of Texas, he invited me to Austin for lunch. I expected it to be with his staff, but it was just him and his chief of staff. He asked me to update him on the […]

JOLTS Are Looking Good

Jolts are not an external shock to the economy. Rather, Jolt is an an acronym for job openings and labor turnover and is prominent on Chairman Yellen’s labor market dashboard. That’s good because Jolts are looking good. The first Friday of the month employment changes are net numbers which obscure much of the dynamics of […]

The Fed’s Vice Chairman, Stanley Fischer, States the Obvious and Creates a Buzz

In a speech in Sweden, apparently only the second one since becoming Vice Chairman of the Fed’s Board of Governors, Mr. Fischer said that both the U.S. and the global recoveries have been disappointing. Well, duh! That load of insight had people talking all day today on financial TV, including me on CNBC. I take […]