Fed hawks

Doug Henwood dhenwood at panix.com
Thu Sep 17 12:30:51 PDT 1998


James Baird wrote:


>The Fed is always portrayed as being completely controlled by the Great
>and Merciful Greenspan. How much control does he actually have over
>policy? Is the FOMC a rubber stamp, or do they actually have an
>independent voice?

The Fed is dominated by the chair, so much so that former vice chair Alan Blinder said he couldn't even get info out of the staff economists. But on major policy decisions, like the Supreme Court, they like to move with unanimity or near unanimity, so this kind of dissent would make it very difficult for Greenspan to force rates down on his own (unless, of course, things get markedly worse over the next 2 weeks). Tom Dickens - you here, Tom? - read the transcripts of a 1986 meeting where Volcker faced a palace coup; he was leaning tight and the Reaganite supply siders were leaning loose. He quit shortly thereafter, handing over the reins to Greenspan.

If Greenspan were do die in Andrea Mitchell's passionate embrace this evening, Mark Jones would probably win his 3,000 Dow bet by the close tomorrow.

Doug



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