Request for requests for Ben Bernanke, blogger

What would you like him to cover?  Please don’t be rude, serious inquiries only.  On Twitter Ben claims he will cover “economics, finances, and sometimes baseball.”

Comments

I'd really like him to address...
Market Monetarism,
the role of reserves vs currency in the monetary base,
the consequences of interest on reserves,
the "real-world" (i.e. not just expectation-driven) buying-and-selling between QE and rising asset prices;
his anecdotes of the Lehman crisis
the role of foreign central banks in US monetary policymaking,
why there is so much deficit spending and resource underutilization in the US, Europe, and Japan when monetary expansion could easily boost nominal growth
is there a "great stagnation", or just poor AD management by the central bank?
Finally, does low interest rates reflect tight monetary policy or loose interest rates?

I'm sorry to piggy-back but I'd like to add to this:

If you feel on some level that the world's central bankers are unwilling or unable to generate desired nominal growth or inflation rates via conventional means (including QE), do you support the creation of a standardized process for "helicopter drops," such as debt monetization or a payroll tax cut financed by money-printing, if a liquidity trap situation is reached? Why or why not? Ideally I'd like to see a reconciliation here: either an exhortation for central banks to be more aggressive in the future, or a "nuclear option" if they can't be.

In the same vein, should Central Banks do backward accountability, passing current judgement on past policy actions?

To concatenate this great suggestion I would add the topics of inflation targeting and the dual mandate vs NGDP targeting.

Will Bernanke preach to me of Friedman and MV=PY, and then how to institute interest on reserves during a deflationary shock?

"Comments are welcome, but because of the volume, we only post selected comments."

Comments: 0.

I don't think it's the volume that's keeping them from posting critical comments.

Yes that zero is a noisy silence.

When you look at the cesspool that is most comments section, especially in the econosphere, can you blame them?

Just look at this website, the comments section has been taken over by a sex expatriate, someone with an obsessive grudge against GMU, and a bunch of social darwinists. Why would anyone want to be even indirectly associated with that crap?

The sign of a good blog is a vibrant comment section. That can spill over into insanity when obsessives post, but nothing is worse than a comment section where everyone is pretty much agreed.

What is interesting is why Steve Sailor is so influential on this blog. I notice you are not willing or able to counter his arguments. So like much of the Left you want to retreat back into a liberal "safe space" where no one will point out things you don't like. Enforced by bans and the like. I assume that is because you know you can't win the argument any other way.

And by the way, there is no such thing as Social Darwinism. There is only Darwinism. Social Darwinism is a myth invented by Leftists so they can pretend they support science by worshiping at the Altar of Saint Darwin. But actually they reject the science of Darwin. At best they are more like Alfred Russel Wallace who insisted that the human brain could not be a product of evolution. At worse they are no different to the Creationists.

@SMFD- atta boy! As if I don't give substantive commentary about economics just because I happen to be engaged to a girl HALF MY AGE. Ha8ers.

Holy shit, the comments are like real life, and also manage to occassionally bring out some interesting insights while exposing people to different views. They must be suppressed.

If I haven't said it before, much regard to Tyler for being mostly hands-off on the comments section.

I see 52 comments on "Why are interest rates so low"? Cannot know how many did not make the cut, but I would like to see the outtakes. I can understand BB's desire to retain an Olympian distance from the hoi polloi, as there must be a big market for speeches and consulting expounding conventional wisdom. Of course, I could be wrong and he could turn into the Ace of Spades.

+1 On asking him to address market monetarism.

In particular, his post states that the only relevant interest rate is the real one and he says the Fed can't really affect that. But of course, there are plenty of claims by market monetarists that nominal rates matter and the Fed has harmed the economy by allowing a collapse in nominal GDP. Even from a modest transactions cost perspective, one doesn't have to be a strong Keynesian/sticky wage believer to say that if nominal GDP collapses and nominal interest rates fall below expectations for a long period of time, that would harm those who bought houses and assets who correctly forecast real growth but incorrectly assumed that the Fed would credibly stick to their constant 2% inflation path from 2008-2015.

1) Why do people think that the fed is going to raise rates?
2) Assuming the fed does raise rates, what justification should they use?
3) Assuming the fed does raise the target rate, will they have trouble meeting their target given that there seems to be a demand issue not a supply issue of demand for loans?

4) If the current fed board of governors were all players for the Yankees, what positions would they play?

Ditto on market moneterism, with one specific issue in particular. Was he wrong to move to an inflation target? Inflation has not come close to target ever since 2% was announced as a target. Given that evidence, would we have been better off targeting NGDP instead, and why or why not?

Follow on question - Keeping in mind that you clearly weren't able to even get close to hitting your inflation target, is there any reason to believe that through monetary policy the Fed could hit an NGDP target?

Rather, if they had an inflation target, does no missing it consistently month after month imply that they should have been buying more and different longer term assets? Or at least said explicitly that missing the monthly target on the low side implies "catch up" inflation in the future to return to the target price level trend?

I would ask him to peruse Scott Sumner's blog posts from both themoneyillusion and econlog and ask him to list the top 3 things, if any, on monetary policy that he disagrees with and explain why.

I'd like to see a candid account of the political constraints on the Fed on having perused more aggressive monetary policy over 2008-2014.

Does he have an explanation for the thinking of inflation hawks?

I distinctly remember reading an article about Ben during his tenure as fed reserve chair, where he stated that he got all of his suits from Jos A. Bank, a discount retailer. In many professional circles, it would be deeply embarrassing to admit that one bought their suit from Jos A. Bank - though even if the suits there might be of inferior quality, they are still a heck of a deal.

I'm hoping Ben can discuss frugality in the workplace, and his experiences being a frugal fashion shopper in a world where sharp suits and designer shoes and ties are allegedly important markers of status.

What kind of dress shoes does he wear? Where does he like to shop other than Jos A Bank? Does he buy a lot of heavily discounted clothes online? Does he prefer Marshalls or TJ Maxx?

To be perfectly clear - I am not criticizing Ben here, there is no Straussian reading of the above. I think that most professionals spend far too much money on clothing and I'm hoping Ben can give guidance and inspiration to those who want to be more frugal.

Along that vein of thinking, I was wondering whether Bernanke sometimes uses the bathroom at places where he did not purchase food and where a sign says "Bathrooms are for customers only." Or what brand of deodorant he uses? I think he's an Old Spice guy, but lets push this matter to the front!

These are certainly weight matters compared to asking that the man justify history's largest asset transfer. He did, after all, have a watertight, ironclad, QED theory about why we needed to give the rich a couple trillion bucks.

He's an academic of a certain generation. He did not wear any suits before he took office at the Fed. At my brother's workplace, it's considered a point of pride never to wear a tie because if you wear one, you're a 'suit' who does not have a real profession. Puerile, of course, but professional class boomers are.

At the September 2008 FOMC meeting, the day after Lehman fell, William Dudley, then manager of the open market account told the committee:
"So I think the consensus view still in the marketplace is that the Fed probably will not cut rates today. That would be a disappointment to a degree because there’s some probability placed on the idea that the Fed might do 50, but that’s how I would interpret what’s priced into the markets today........But I think it’s hard to interpret because it’s really not about 25 versus zero. It’s really about zero versus 50 or maybe even 100 as you look out longer term. Either the financial system is going to implode in a major way, which will lead to a significant further easing, or it is not."

The committee decided to leave the Fed Funds Rate target at 2% with an eye toward eventually raising the rate, which was followed by the financial system imploding in a major way.

Recently, Mr. Dudley, who is now head of the New York Fed, said:
"Monetary accommodation turned out to be insufficient to produce an easing of financial market conditions, and the economy fell into a deep recession."

Can you reconcile this recent comment with Mr. Dudley's statement in the September 2008 meeting and the FOMC's decision to use its discretion to deny accommodation in the face of Mr. Dudley's report? In hindsight, in the balance between, say, 4% inflation and the implosion of the financial system, should financial implosion have held a heavier weight in the FOMC's rate decision? Is it more correct to say that monetary accommodation was insufficient or to say that we tried an insufficient amount of monetary accommodation?

The Big Question:

How will the Fed unwind the trillions of dollars in monetary stimulus that it has created under his watch?

Same question, minus the first word.

Politics at the FED.

As in, how independent are they, really? Did they spend a lot of "capital" when undertaking QE?

Did support from the econ blogosphere on more aggressive easing help?

I would like Bernanke to explain the reasoning behind the Feds decision to pay interests on excess reserves (as high as 1%) in 2008 as the economy was crashing. This caused a lot of the monetary base to get trapped in reserves.

That question, along with questions about bailouts to AIG, will not be of sufficient to merit posting on Ben's blog.

Both decisions were tightly reasoned through logic involving very vague references to a monetary transmission mechanism, piles of econometrics, and duping of the public into handing over a couple t in assets to peole who were already among the richest in the world. Just trust them - the econometrics proves it, and they're good guys!

Thomas Sargent, in various public lectures, has mentioned the tension between the way in which deposit insurance helps end runs but also creates moral hazard for financial institutions, citing karaken and wallace (http://minneapolisfed.org/research/sr/SR16.pdf) as well as diamond-dyvig. I would like to hear Ben Bernake address those concerns directly.

I want him to do a response on Scott Sumner, about NGDP-level targeting.

Will the Euro survive?

Ethnic dining around DC?

Isn't it the case that following the monetary and fiscal advice in the Chicago Plan of 1933 worked in 1933, and hasn't history shown the relevance of the other recommendations the plan advanced? Isn't this plan worth considering:

“A Monetary and. Fiscal Framework for Economic Stability”. (Friedman 1948)

Had he known then all he knows now about the Great Recession, what would he have done differently?

Gold. Anything and everything. His thoughts on the gold standard, the various relationships between Fed and Treasury relating to gold, impact of other countries that appear to be accumulating gold, even possibly his 'informed' opinion on how much gold America actually holds.

Like lots of others, I'd like to hear Bernanke's views on "What Scott Sumner gets wrong"..

I would like to consider a retail approach to our economy as an alternative or addition to the interest rate approach. The goal would be a $20 trillion GNP.
Any tax paying entity could deduct 15% of any asset purchase over 1% of the entity's AGI up to a total of 10% of AGI.
A for instance as my grandfather used to say.
A couple with $150000 AGI buy a $10000 car and a $1200. Refrigerator
Their effective cost is car $8500 and refrigerator $1020
Because we are dealing with taxes congress needs veto power but only on a short period like ten days. By playing with the percentages the fed could fine tune this on a monthly basis to get targeted results.
Like a retail store the results would be faster and more direct than the trickle down effect of fed fund rates alone

1) What percentage of the models and projections that the Fed staff use internally attempt to incorporate 'leakage' of US monetary policy to other countries/currencies?
Is this subject regularly considered? Never considered? Not taken seriously? Regarded as fairly easy to model? Impossible to model? Irrelevant to their models? Why?

2) During the 2008-2010 years, Micheal Woodford was not heard much publicly offering a diagnosis of the economic events or a policy prescription. Since almost everyone else was quite vocally and confidently shouting their diagnoses and advice from the rooftops; did Mr. Bernanke find Mr. Woodford's quiet strange? Did Mr. Bernanke seek Mr. Woodford's input or ideas? What (if anything) were the observations or events that Mr. Woodford found problematic or that made him unsure (if he was) that he had an accurate diagnosis to offer?

It may have already been said, but why does he think the original taper announcement caused so much market tumult in emerging markets.

Get a confession out of him.

Take a cue from DeLong and live blog the Great Depression.

What changes should be made to the Fed's charter (assuming a less perfect world)?

I'd love to get his thoughts on peer-to-peer lending, and whether it poses a large long-term threat to increasingly regulated traditional banking.

His thoughts on narrow banking would be interesting as well.

Perpetually failing projections. What can/should be done to improve them and do they owe it to do so?

+1 On asking about the desirability of a NGDPLT target.

As with everyone else, I want to hear Ben Bernanke on Scott Sumner

Also, about whether he thinks breaking up the banks is a good idea and whether there is any feasible way to avoid bailouts in the future?

Does the Fed really employ 200 Economics PhD's?

What DO they do all day?

Should we be moving towards macroprudential policy given the poor Fed track record.
The emergence of interest on reserves as a realistic policy tool, whether intended or not.
Why should we expect anything other than deteriorating efficiency out of a sector (banking) that largely removes the risk of failure and throws up huge barriers to entry?

Only one recent news event has made me seriously question the Fed: Carmen Segarra's accusations, including revealing audiotapes, that the NY Fed is soft on carrying out its regulatory duties. I haven't seen a follow-up which exonerates the Fed.
http://dealbook.nytimes.com/2014/10/02/secret-goldman-sachs-tapes-put-pressure-on-new-york-fed/

The Bernank does not tolerate dissent.

http://www.wcvarones.com/2015/03/the-bernank-does-not-tolerate-dissent.html

1) Should we ever have been concerned about the direct macroecomic impact of oil price shocks (ref.
Bernanke, Ben S, Mark Gertler, and Mark W Watson, "Systematic Monetary Policy and the Effects of Oil Price Shocks," Brookings Papers on Economic Behavior, 1997.
http://econ.as.nyu.edu/docs/IO/9382/RR97-25.PDF
Barsky, Robert B., and Lutz Kilian. 2004. "Oil and the Macroeconomy Since the 1970s." Journal of Economic Perspectives, 18(4): 115-134.
https://www.aeaweb.org/articles.php?doi=10.1257/0895330042632708)
... and how does the analysis change now that US is world's leading oil producer?

2) What has been the impact of population decline on Japan's economy?
(ref. Sayuri Shirai, 2012 "Have Demographic Changes Affected Japan's Macroeconomic Performance? Some Implications for Monetary Policy" Bank of Japan Working Paper.
https://www.boj.or.jp/en/announcements/press/koen_2012/data/ko120910a1.pdf
... and what are the implications for other countries (e.g. via global capital markets)?
What are the immediate and long term global macroeconomic implications of current and expected population decline in Europe, N. America, and the rest of East Asia (beyond Japan)?

If Bernanke could talk about regulatory capture as pertaining to the finance industry, and if he's feeling up to the challenge, the federal reserve system specifically, I would enjoy that.

Also if he could discuss the history of free banking specifically in the countries where it was relatively successful, and how he squares that history with his view of how central banks are a necessary and beneficent force for market economies.

Also any discussion on the effect of the Zero-lower bound on policy making, and the recent breaking of the bound in many countries and what it means financial economists both practically and academically.

Would he rather be attacked by one horse-sized duck, or 50 duck-sized horses?

Definitely one horse-sized duck (or he's not being serious)
http://www.nytimes.com/2008/01/12/washington/12navy.html

That is what cluster munitions are for but apparently, unlike nuclear weapons, they are immoral.

What is Fed influence in congressional budgeting and should there be a greater/lesser role?

Well, ZIRP on the national debt gives Congress a lot of free cash to play with!

P.S. Did you know that the interest on the trillions in debt that the Fed holds gets given back to the Treasury for the Congress to play with?

Given that over the past 20 years, core PCE has averaged 1.7% and been below 2% more than 3/4 of the time, what magic is there to 2% inflation and thus why target 2% ?

What does he thinks of Larry Summers' theory on secular stagnation and the role of government?

I'm interested in what he thinks about interest rate adjusted retirements such as Social Security, military retirements, and some state and federal retirement plans. How does this effect the FED?

Thoughts on Scott Sumner

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Has the War on Drugs failed?

I would like to see BenB expand on his "Fed is impotent" bit of his first blog post, ask him whether money is short-term or long-term neutral or super-neutral (surely he must concede the latter*), ask him whether "expectations" theories about responses to interest rates are not just untestable, unscientific hypothesis nonsense to make the theory of monetarism work when it is not supported by the data* (* ‘King and Levine (1993) did not find evidence to support the hypothesized relationship between real interest rate and economic growth in a cross-section of countries. Taylor (1999) found that the link between real interest rates and macroeconomic aggregates such as consumption and investment is tenuous.’ (from a paper by Richard A. Werner, who coined the phrase ‘QE’)

Ask him about Sumner's NGDPLT proposal. Ask him whether NGDPLT is not just a variant of the old Fed "real bills" doctrine, which says the Fed should always buy commercial paper that is freely offered by member banks, and which is largely considered pro-cyclical and possibly inflationary. Ask him how the Fed would even track NGDPLT given its data gathering infrastructure. For example, economist Richard A. Werner complains that In MV = PQ, often PY is substituted on RHS, (“a simplification”) and this is done since easier to measure Y and PY is a rough proxy for PQ, yet this is strictly speaking wrong.

Finally, how he can reconcile the talk that the Fed stemmed the panic in fall of 2008, given that credit default swap risk for US Treasuries peaked not in 2008, as one might expect if the Fed stemmed the panic, but in the spring of 2009 (about the same time the stock market reached its nadir). See graphic on right-hand side: http://raylopez99.blogspot.com/

Ask him if he believes in sticky prices and sticky wages (two separate concepts, the former being more controversial than the latter, and BenB wrote a paper showing not much sticky wages in the Great Depression for many countries).

Good luck!

What would 2015 Ben Bernanke tell 2007 Ben B., 2008 Ben B., 2009 Ben B. etc.

Well, it'd be nice to hear Ben's thoughts on NDGPLT, of course, but what I'm really curious about is how the Fed governors view people like Ron Paul who seem suspicious of fiat money, and elements of the left that are starting to embrace a "modern monetarism" under which they believe there are little to no practical limits or problematic aspects with deficits of practically arbitrary size. Do they worry? Does throwing a "community banker" on the board a precedent to politicize the institution? O do they just roll their eyes at it?

His thoughts on level targeting vs growth rate targeting.

In the context of a future stagnation, would he consider targeting nominal median income (Level targeting)?

If there were a legal constraint in some fairly sized, fairly diversified country that they had to choose only a commodity target, what commodity standard would distort a modern diversified economy the least? (I think I have an answer, but would like to hear his opinion)

Ah, so he does has some expertise in something. What factors drove the use of PEDs in the 90s?

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1. Sketch an optimal legal and institutional regime for derivatives trading.

2. Is it possible and desirable to separate via law and regulation deposits-and-loans banking from the capital markets from the insurance business?

3. Should deposits-and-loans banks be limited in the asset sorts they can hold, as being prohibited from holding futures./options/swaps/derivatives, equities, junk bonds, non-financial assets (bar plant and equipment and collateral seized)?

4. Should deposits-and-loans banks be prohibited to engage in securities lending?

5. Should financial firms (bar broker-dealers) have to use an intermediary-on-commission for their proprietary trading?

6. Can and should the law forbid securities underwriting, proprietary trading, funds, and retail brokerage / treasury services / trust administration, (or any two of them) from taking place under the aegis of one firm)?

7. Would it be possible to reconstitute Fannie Mae, Freddie Mac, Ginnie Mae, Farmer Mac, and Sallie Mae into private firms without any legal privileges? Would it be necessary to break them into a million little pieces to do that?

8. Should financial firms chartered in the United States be prohibited from having foreign subsidiaries with assets or assets under custody extending beyond plant and equipment and some accounts to meet payroll and stock cash machines?

9. Should financial firms chartered in the United States be prohibited from acquiring an interest in foreign firms exceeding a certain share (say 20% of outstanding shares).

10. Should the voting rights on equities of domestically chartered companies be in abeyance if they are owned by financial firms (foreign or domestic)?

11. Should the voting rights on shares of domestically-chartered financial firms be in abeyance if they are owned by public agencies, funds controlled by public agencies, other commercial companies, or funds controlled by other commercial companies?

12. Should agencies regulating the financial sector be corralled into one federal department, with a common commission engaged in rule-making and adjudication?

13. Why can't we have better morbidly-obese econbloggers?

14. Where does Barney Frank land on the sleaze scale (score 0 to 100)? Timothy Geinther?

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