The Federal Reserve Dissenters

Richard Fisher and his allies at the Fed are a fine talent pool from which a new sound-money chairman might be drawn.

By ROBERT L. POLLOCK

The Federal Reserve’s near-zero interest rate policy has come in for a lot of criticism of late. Savers young and old are angry about paltry returns. Free-market advocates complain about the distorting effect low rates have on capital allocation. And small-government types worry that the central bank is enabling an unprecedented explosion in government spending.

Fed critics should at least be happy to know that when interest rate decisions are being made there are articulate dissenters in the room. One of them, Dallas Fed President Richard Fisher, stopped by the Journal’s offices Tuesday and was frank in his criticism of Ben Bernanke’s policies.

He said both academic research and his own surveys of businessmen show little evidence that low rates will do anything to spur real growth over the near term. What’s holding the economy back is uncertainty over policy issues like tax rates. “What we’re accommodating [with low interest rates] is fiscal malfeasance [on the part of Congress and the president] and at some point it has to stop.” …

Continue reading at online.wsj.com…

image: flickr.com/benmurphyonline

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