The Guild of Thrall: Warsh Fed Edition
"PhD's in economics are important, but what is at least as important is an understanding of the capital markets. [I have] real-world experience in boardrooms with CEOs and CFOs."
"[The] existing policy paradigm...reveals a deep and damaging affliction of too many policymakers and academics: the groupthink of our guild; an unwillingness to revisit a priori assumptions; an excess of affection for the latest trends in academia; and, a generalised lack of humility in spite of anachronistic models and massive forecasting errors."
"I observe some smart and earnest economic professionals running with the pack, less willing to undertake a rigorous assessment of ideas that could belie their hypotheses, and more disposed to making ad hominem arguments to relegate alternative views. An immodest disposition from the leading lights in our guild might be understandable amid an economic boom. It is more puzzling given the meagre state of economic output."
"Too many policymakers appear in thrall to financial markets, and financial markets are in thrall to policymakers," said Warsh in that speech last June. "Reconsidering the transmission mechanism of financial markets and the responsibility of policymakers is of a piece with a reform agenda."
"Trump could re-nominate Yellen, but he might not. During his campaign, he said Yellen should be 'ashamed of herself', but more recently said she has 'done a good job'. Yellen will remain on the board as a governor until her 14-year term expires in 2024."