Do you ever get incoming e-mails that just leave you scratching your head and thinking “are you kidding me?”
I am going to guess that we all do and most would typically delete them in short order. I almost did that late yesterday when I saw an incoming message that informed me that Janet Yellen, the new head of the Federal Reserve, possessed powers and vision that some might define as otherworldly. Let’s navigate as the Cornell University Media Relations Office released the following:
Robert C. Hockett, former Resident Consultant for the Federal Reserve Board, international finance expert and professor of Law at Cornell University, discusses how Janet Yellen will usher in a new era of a proactive Fed.
“Today marks a milestone at the Fed in at least two senses.
“The obvious milestone is, of course, the one that everyone is talking about: for the first time in its 100-year history, the most influential central bank in the world and the most consequential government agency in the nation – the US Federal Reserve Board – is to be chaired by a woman.
“The less obvious milestone, however, although unremarked, is actually much more important: Dr. Yellen is the first Fed Chair in modern memory who is on the record – and has indeed long been on the record – in maintaining that the central bank can and should spot asset price bubbles while they are in the making, and that it can and should act to pre-empt them.
“This vision – that of a ‘proactive,’ or ‘macroprudential’ Fed – might seem unsurprising to lay persons, but in fact it has been missing from mainstream central bank theory and practice for over 30 years. Chair Yellen has long seen that this was a mistake, and her now taking the reins at the Fed is significant above all on that account.”
Pardon me for being cynical but given that Ms. Yellen was the head of the Federal Reserve Bank of San Francisco from 2004 until 2010 why didn’t she use her supernatual, intergalactic-type vision to spot the housing bubble and pre-empt it?