Pundits doing punditry
Four years ago, there was a race between Janet Yellen and Larry Summers to head the Federal Reserve.
If you read the commentary at the time, it was hawk (Summers) vs dove (Yellen). In addition, every detail of Summers’ long public life was rehashed. Every slip-up, every mistake was dissected.
Summers went from being a heavy favorite to a longshot in a couple weeks.
In hindsight, Summers might have been a better choice because he turned out to be more of a dove and has been attempting to answer some of the questions about why the Fed has failed to hit its inflation target. Yellen, meanwhile, continues to slog on, repeating that all the factors working against her are temporary.
Now it’s Kevin Warsh and John Taylor that are getting ripped apart in the media.
Bloomberg writes that ‘Taylor has a complex history to overcome if picked as Fed chair’. It’s about his complicated history with the U.S. Federal Reserve that could force him into a hard pivot if he’s selected as its next leader.
That’s fairly tame but a column about Warsh is scathing.
«Trump seems to want a Fed chair who will never disagree with him, which is just about the worst requirement you could come up with for the job. Well, that and picking someone who thought that 2 percent inflation was a bigger threat than 10 percent unemployment,» it says.
Ultimately, the media plays a role in vetting candidates but in practice it means that you end up with unimaginative candidates who never say anything publically. In five years as a Fed governor, Powell has said almost nothing.
If the winning formula is silence, then you’re left with candidates who will be unable to speak up when trouble is stirring.