Dallas Fed President: Buy a ticket!

Posted by Nolan Miller on Nov 3, 2011

Filed Under (U.S. Fiscal Policy)

Dallas Fed President Richard W. Fisher gave a highly interesting, thought-provoking speech last week.  His full remarks are posted here.  Among the interesting points he raised are:

  • “[I was told] the story of a God-fearing man who prayed several times a day, imploring the Lord to let him win the lottery. Day after day, year after year, God listened to this man. Finally, He grew weary of the man’s prayers and spoke to him: “Help me out, my son, so that I might help you,” the Lord said. “Buy a ticket!”…  I am going to suggest that our nation has a crying need for public leadership to correct what is wrong with our economy; that the Federal Reserve has provided the leadership required of it; that monetary policy cannot do it alone and must be complemented by responsible fiscal policy—policy that is exclusively the responsibility of those whom we elect to represent us in Washington; that rather than posturing for political expediency and positioning for victory at the polls in November 2012, our nation’s political leaders need to actually “buy a ticket” and put themselves at risk, right now and without delay. Each passing day they fail to do so further jeopardizes our economic stability and our nation’s future.”
  • “The parties involved must stop the hemorrhaging without inducing cardiac arrest; they must solve the long-run debt and deficit problem without, in the short run, pushing the economy back into recession, creating still more unemployment. And they not only must confront their addiction to debt and spending beyond their means, but also reorganize the tax system, redirect the money they spend and rewrite the regulations they create so as to be competitive in a world that wants to beat us at our own game.”
  • “Only fiscal authorities have the power to affect this outcome. Monetary authorities, like me and my colleagues on the Federal Open Market Committee (FOMC) of the Federal Reserve, have limited influence. We can fill the gas tank with attractively priced fuel―abundant and cheap money―needed to propel the economy. But we cannot trigger the impulse to step on the pedal and engage the transmission mechanism of job-creating investment by the private sector. This is the province of those who write our laws and regulations―the Congress of the United States.”
  • “I would suggest to you that the time is now. Our nation’s economy is at risk. The Federal Reserve is doing everything it can to bolster unemployment without forsaking our sacred commitment to maintaining price stability. I personally don’t care which party is in the White House or controls Congress. All I know is that the “honorable” members of Congress, Republicans and Democrats alike, have conspired over time, however unwittingly, to drive fiscal policy into the ditch. They purchased their elections and reelections with popular programs so poorly funded that they now threaten the economic well-being of our children and our children’s children. Instead of passing the torch on to the successor generation of Americans, the Congress is simply passing them the bill. This is the opposite of honorable, and it must stop.”

HT: Leeds on Finance via Jerry Carson.