This afternoon I’m on Bloomberg TV, from 2:00pm to 2:20 or so discussing the Fed rescue plans, the Markets, and the creative destruction of capitalism.
Some bullet points I hope to hit:
• The policy debate between recession vs. inflation is so 2007. The more current debate is whether the Fed is pushing on a string, and if the USA is looking at a situation similar to Japan in the 1990s.
• Is the Fed’s ongoing interference in the markets positive or negative? Should some fIrms be allowed to fail — or at least get banged up enough that someone — better risk management, stronger capitalization, smarter management — is able to swoop in and buy ‘em cheaper?
• Paulson’s stronger mortgage rules are not a day late, and a dollar short — they are a half decade late, a few a trillion dollars short . . .
If you are not near a TV, you can stream it. Should be fun. . .
UPDATE March 15, 2008 6:45am
Here’s a cool new source for me: Find Internet TV.com
And now, a word from a distinguished central banker:
Monetary Policy Transmission: Past and Future Challenges
Distinguished Address by Paul A. Volcker
To Conference on Financial Innovation and Monetary Transmission
Sponsored by the Federal Reserve Bank of New York, April 2002
The subject of this conference — innovation and monetary policy transmission — is something that has naturally concerned me over the years. Historically, the issue has appeared in somewhat different guises. I never thought I had really adequate answers, but somehow the system has worked. Moreover, I am afraid that as far as current technological and financial innovations go, I should be listening rather than speaking. I am not a big user of new technologies. My main experience with technology as president of this Bank and then as chairman of the Federal Reserve Board was asking why staff needed new computers every four years. I always had the feeling that capacity was expanding exponentially over time, but I did not know that monetary policy was becoming any better.
Nonetheless, I believe you are onto an intriguing subject. Indeed, some of the topics covered in your papers remind me of questions I have thought about before. For example, when I was here and when I was in Washington in the late 1970s and early 1980s, we embarked on some new approaches to monetary policy that depended upon control of money by the means of quantitative control of the reserve base.
Hat tip: Money: What it is and how it works
Category: Federal Reserve