Goodfriend Nominated to Fed’s Board of Governors – and more

The Trump Administration announced yesterday that Dr. Marvin Goodfriend has been nominated to the seat on the Federal Reserve’s Board of Governors vacated by Sarah Bloom Raskin, a nomination that seemed to me as rather sudden with no opportunity to comment.

Goodfriend would not have been on my short list of preferred candidates for reasons I will address later. Nevertheless, he does have some very strong points in his favor that could prove promising:

  • He is an accomplished monetary economist and has dedicated his life to the study of the topic
  • He has gone on record with the claim that the Fed has lost credibility on its inflation target, and that the Fed needs both rules and accountability – three broad points that I agree with in principle.

Given these points, Goodfriend may very well turn out to be the dark horse at the Fed, the guy who goes in renders the status quo unsustainable (the Yellen Fed’s NGDP trend line was even flatter than the Bernanke Fed’s post 2008 trend!). A dark horse is needed and he is certainly capable. Whether it will be Goodfriend to help rein in the rather insular institution is a matter of character, and do not know enough about him to be able to determine whether he is someone who has the ability to examine his priors based on contradictory evidence or whether he is someone who carries such a fondness for his own ideas as to be blinded by them. Only time will tell.

Though the method of Goodfriend’s nomination, sudden and with no public discussion, is somewhat troubling because if the institution is to be run in a collegiate way, and doing so is assumed to result in better policy, I would think that having the Chair pick the members of the Board of Governors who have similar views and are more likely to vote with him or her would detract from that aim by resulting in singular insularity. Going to an extreme choice of words to illustrate (and excluding anything specific to Goodfriend), a BoG packed to the brim with the Chair’s sycophants for the sake of expediency is not likely to produce sound policy.

A better approach would be for the administration to find and vet qualified candidates of reasonable character who may have different ideas because the goal would be for those views to be shared and synthesized into one policy through presentation and discussion of evidence and compromise.

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Wikipedia, in its ebb and flow of near legitimacy, has jumped the shark, at least in terms of its explanation of Classical Liberalism. I am not exactly sure what lead me to look up the topic, probably curiosity about what it says out of having self-identified as such, but the following butchered description of Thomas Malthus’s population theory is appalling:

Adopting Thomas Malthus‘s population theory, they saw poor urban conditions as inevitable, they believed population growth would outstrip food production and they regarded that consequence desirable, because starvation would help limit population growth.

Nobody wishes people to starve to death as form of population control much less adopt it as tenant of their political philosophy except for perhaps Stalinist and Maoist communists, or the Ottomans. Though I believe there are mentions of population control in publications circulated by progressives at the turn of the 20th century that do not specifically mention starvation. Perhaps the editor of this section failed to read thoroughly Malthus’s theory resulting in confusing classical liberals with progressives.

Only big government types believe that if the government doesn’t feed the destitute nobody else will.

 

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