Confusion on the Federal Reserve
This is a nice list of potential nominees for the Federal Reserve board, but it's not necessarily an informative list. In part, you get the sense that people are simply tossing names out because there's no settled consensus on where they fit. Who's acceptable to the left? To the right? To Wall Street? To the administration? In some ways, the Federal Reserve has been too de-politicized: People should at least have opinions and an understanding of an institution that powerful.
Something to remember when thinking about the Federal Reserve Board is that it's a bit like a Supreme Court appointment: The question isn't just the ideology or analysis of the individual, but their skill at influencing other members of the board. That creates an interesting tension when dealing with some of the community development types under consideration: They'll offer an important and fresh perspective, but will they be influential in a room dominated by academic economists? Will they themselves be swayed? Or maybe they'll be far more effective for being able to bring market failures to the attention of people who'd otherwise manage to escape knowledge of such imperfections.
It's all hard to say. But I'd echo William Sherrill, a former Fed governor who says that the picks should post-financial crisis choices. “All the attention lately has been on rescuing the financial sector from ruin," Sherrill explains, "but the inability to move the stimulus over to the real economy — and most directly, small businesses — has been the problem.”
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