Warsh discusses Bernanke and Fed policy on CNBC’s Kudlow Report

Wednesday, October 24, 2012
Marriner S. Eccles Federal Reserve Board Building
Image credit: 
AgnosticPreachersKid
Marriner S. Eccles Federal Reserve Board Building
Image credit: 
AgnosticPreachersKid

Kevin Warsh, a distinguished visiting fellow at the Hoover Institution and a lecturer at the Stanford Graduate School of Business, said that Bernanke must be very worried about the economy based on the Fed’s aggressive actions six weeks ago. Warsh is not impressed with the efficacy of quantitative easing or convinced that it is the right medicine, at the right time, for the right problems but rather that the Fed is trying to get the economy going in the right direction without help from Congress or the president. Warsh said that the obstacles to growth are deleveraging and the weaknesses that might be expected coming out of a crisis but that the four economic policies that really matter for economic growth are trade policy, regulatory policy, fiscal policy, and monetary policy and that those four policies are currently hindering growth. Warsh also shared his insights on the influence a new president might have to change Fed policy, noting that it takes time to change Fed policy because the Fed chairman has to get the votes of the Fed governors to enact any policy changes. The Fed chairman listens to presidents and considers the tax problems, entitlement issues, and so forth that could be affected by Fed policy; the Fed, however, is fiercely independent and does not make decisions for political gain or gamesmanship. Click here to watch the interview.