Tuesday, August 12, 2014


Stanley Fisher gave a little talk the other day in Sweden which of course no one understood.  Oh sure, the usual suspects were unanimous in their reporting that Mr. Fisher was right on board with Janet's easy money policies as economies were still not showing the growth that was needed for a departure from the accommodative Fed policy.  It is correct that is what he said; that, however, is not what he meant.

Stanley Fisher has always been nuanced.  The real message in his talk was that which he slipped in almost as an after-thought and with great subtlety.  In case you missed it  he said maybe we are looking at this thing the wrong way.  Maybe things have substantially changed in the world  to the point where conventional monetary actions are no longer effective.  Maybe political and fiscal responses, honed in a different era are no longer applicable and maybe the political calculus and institutions being used in the United States and elsewhere are not correct in their own sense.  In short, what he said was do not look to us to solve the problem; it is not of our creation nor are we the solution.  Yes, we will continue to help but unless policies are changed, expect little more than Horatius at the Bridge from us.

Think of it.  This is pretty profound stuff and certainly not what one normally hears from today's central bankers weaned in the political process and seemingly always determined to stay on the good side of their political masters.  But Stanley Fisher is not the usual run of the mill kind of guy.  He is also The Smartest Guy in the Room and knows it--not with the condescending narcissism  of some…Little Paulie comes to mind--but simply because he is.  He needs no one to tell him and therefore simply speaks his mind.  My one criticism of Mr. Fisher is that he plays with his audience. He seems sometimes to be smiling and chuckling in the background as I suspect he is today, waiting to see who among the lesser mortals finally figures it out.  The problem with that is we are today led on many levels by seriously lesser mortals.  I'm afraid he is going to be a bit more direct in the future which this remarkably gentle man will not like if he is to be effective, and if not,  then the joke will be on us all.

Our house is about to go on the market.  Dealing with Trouble and Strife through this period is not going to be easy.  Stick by me.  A few prayers wouldn't hurt as I kinda have grown fond of the old manse as well.

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