Author Archive

Reserves Won’t Save the Russian Ruble

What I try to do in these posts is to comment on contemporary issues and the dialogue on financial TV through the prism of my long experience at the Fed. That experience formally began in August 1968 at the Richmond Fed as their new “international” economist. My first article for their economic review was on […]

Currency Confusion

Thursday’s WSJ had a front page article titled “Dollar’s Rise Causes Pain in Europe, Asia.” It began by stating that “A surging dollar and falling commodities prices are delivering a windfall to American shoppers and confounding central bankers by widening the gap between the expanding U.S. economy and struggling countries in Europe and Asia. The […]

Productivity is Key for Good Economic Performance

Third quarter productivity was revised to 2.3 percent growth in the third quarter, up from an initial estimate of 2.0 percent. That’s good news by recent lowered standards. This resulted in the related good news that unit labor costs fell 1 percent in the third quarter after a revised drop of 3.7 percent in the […]

Super Mario and the Euro

There was a central banker named Mario, Who promised to save the Euro, But he was too methodical, His approach was asymptotical, He got close, but no cigarillo.

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 […]