Web TV doesn’t work for me. Unless it’s a specific football game (usually college), I typically have no idea what I want to watch when I sit down. Instead, I plop onto the couch to spend a few minutes channel surfing until I get bored and go do something useful. Usually this takes 15 to 20 minutes, but it can take a lot longer, like when I get pulled into an old movie.
High on the list of movies that can halt my channel surfing and keep me on that couch are John Wayne and Clint Eastwood movies. Among the top titles are anything with the Dirty Harry character.
He takes no prisoners.
He calls things the way he sees them.
And he always ends up getting the bad guy while staying true to his calling.
As Larry Summers bowed out of the race for Fed Chairman this past weekend, I started thinking about who would be the best candidate for the job and what I’d like to see in the next chairman… some of the traits of Dirty Harry.
Don’t get me wrong. I’m no fan of the Federal Reserve as an institution. It’s not federal, i.e. not owned by the U.S. government, it’s not a reserve and has done precious little to avoid the cycle of boom and bust as it was supposed to over the last century.
However, it’s not likely to go away anytime soon. Someone has to run it. The person at the helm should be thick-skinned, understand the mission of the organization and be willing to offend others.
In short, a better mannered Harry Callahan (a.k.a. Dirty Harry).
While a complete outsider would be nice, we aren’t counting on it.
Ron Paul isn’t going to ride in as the nominee and then dismantle the exact institution he was asked to run.
David Stockman – a better choice – has zero chance of an appointment given that he has called out almost everyone associated with the Fed and the poor financial decisions of the last five years.
When looking across the landscape of who IS available, capable, and could actually stand his ground in a fight, one name goes to the top of the list: Richard Fisher, currently the President of the Dallas Federal Reserve.
Dick Fisher has degrees in economics from Harvard, true, but he also attended the Naval Academy where he studied engineering, and he earned an MBA from Stanford. Fisher has worked on Wall Street at Brown Brothers Harriman, and has run his own firm in Texas. That means he hasn’t spent his entire career in academia, politics or a government job. He’s got street cred.
In addition, over the last couple of years he’s spent his time speaking at public events to point out the failings of the current Fed policy.
The continued rounds of quantitative easing aren’t working and should be ended. The Fed has taken huge (even if I think misguided at times) steps to try to save and/or boost the economy, but there is no way the Fed can do this alone. Nor should it ever be asked to do such a thing.
The Fed has clear objectives, and keeping the S&P at or above a certain number is not one of them.
You can judge Fisher for yourself if you read this great speech, which is complete with self-deprecation and humor. From this you’ll get a sense of his point of view as well as how he shares it.
In my mind, I can see him testifying at the Congressional committees and uttering the famous Dirty Harry words: “A man’s got to know his limitations.”
Just as the fictional character was not referencing himself, Dick Fisher could use the phrase to describe the Fed as a whole. The members of the Open Market Committee should recognize what they can’t do (choreograph the economy) and what they shouldn’t do (try to prop up different markets).
At some point it would be great to have a chairman that allowed markets to actually discharge excess through sell-offs and losses after periods of speculative gain.
Of course, that’s exactly why it will never happen, at least not with the current administration, and in fairness probably not with the last one either. The desire to direct the economy in a smooth, upward slope crosses all political lines, no matter how pointless the endeavor.
It seems most people in politics think that by tinkering with money they can dial the economy to that special place where things are neither too hot nor too cold.
Unfortunately what actually takes place is a setting where some people get all the goods – like bankers – and the rest of us have our savings taken away, one percentage point of interest and/or inflation at a time.
Expect Janet Yellen to be the next Fed Chairman, or someone with similar views.
Whoever it is, the next Fed Chairman will be very dovish on monetary policy, pumping money into the economy and keeping interest rates exceptionally low for as long as possible… no matter how dismal the results or how painful it is to savers across the country.
Ahead of the Curve with Adam O’Dell
If you followed the advice I put forth in Survive & Prosper on August 15, just over a month ago, you’re likely sitting on a nice little gain of about 7%. That’s more than double the return you’d have earned simply investing in the S&P 500 (SPY), which is up a respectable 2.8%.