This is Steven Williamson praising Minneapolis Fed chief Kocherlakota in 2010:
Narayana Kocherlakota, 9th Federal Reserve District President, gave a speech, posted here, which I originally commented onhere. He’s speaking to an audience of Upper Peninsula business people, and he treats them with respect. Narayana uses the opportunity to explain Fed policy to his audience, to teach them some economics, and to say something to the wider community (us) by posting the speech on the Minneapolis Fed website. The speech is quite comprehensive, touching on all the current monetary policy issues and, as it should, it brings to bear all the relevant macroeconomics we know to address the issues. Some of this theory is sophisticated, but Narayana does a good job of bringing this down to a level where a lay audience should be able to get most of it. We have Irving Fisher, search and matching theory of unemployment, New Public Finance, etc., all rolled into a coherent whole. We have come a long way. William McChesney Martin could not have pulled this off, and neither could Alan Greenspan.
Now I think the Invisible Hand got things right when she/he/it made Narayana Kocherlakota, Jim Bullard, and Jeff Lacker (for example) Fed Presidents, and sent Paul Krugman, Brad DeLong, and Mark Thoma off to the blogosphere.
Fast forward to 2012. Kocherlakota has fallen off the pedestal (only Bullard and Lacker remain)
So the Kocherlakota of 2 1/2 years ago had some worries about the potential for inflation. Maybe he changed his mind for good reason? I don’t think so. The new Kocheralakota seems to be a flimsy-excuse guy.
Addendum: Kocherlakota goes on in the same speech I quote from in the last paragraph to say this:
I hasten to say—and I want to stress—that I view this scenario as unlikely. For it to transpire, the country would need a combination of bad monetary policy and poor fiscal management. I do not foresee this combination as likely to occur.
That’s important. We now have bad monetary policy and poor fiscal management (whoever is elected President next week – worse if it’s Romney). The stunning thing here is that the old Kocherlakota didn’t imagine that he would be the source of the bad monetary policy.
And to top it off:
When is it Time to Take a Vacation?
Answer: When Matt Yglesias calls you (Kocherlakota) a “hero of rigor.”
Fortunately for him, Kocherlakota will not be “homeless” for long. Fallen Idol for some, Born Again Hero for others!
I don’t understand Williamson. He seems to be contorting himself into knots at every opportunity to fight Market Monetarism.
But I ask Williamson: Should not government be accountable and transparent? Is not monetary policy part of proper government? Should not the Fed outline its goals and how it plans to get there? In the most clear language possible?
And should not economic growth be a goal?
And if the citizenry does not like monetary policy, should not they have option to vote for a different kind of monetary policy?
“We now have bad monetary policy and poor fiscal management (whoever is elected President next week – worse if it’s Romney).”
He’s right about that though!