raghu wrote: > This is an interesting theory. But I find it difficult to believe that > very high level Fed officials like Al and Ben would be motivated by > any "revolving door". There has to be a different mechanism for > "regulatory capture" for these guys. I think it is just plain > ideology.
They were hired/appointed largely on the basis of pressure from the banking sector and Wall Street. "Main Street" is largely ignored in this process. So the Fed Head shares the financial ideology. Also, on a day-to-day basis, the banks and Wall Street are the ones who pay the most attention to what the Fed does and lobby it. Most people are blissfully ignorant. And, banks choose branch presidents who are on the Open Market Committee, while the New York Fed (one of those branches) is always represented there. While there's a common culture shared by all bankers and finance types. Finally, morale must be maintained. If someone who wasn't pro-bank and pro-Wall Street got in, the banks and WS would go ape-shit. In fact, that's what happened when William Miller became Fed Head during the 1970s. He was ousted and replaced by Volcker. That doesn't mean that the Fed Head is a puppet of the banks and WS. There's always a tension between obeying the short-term interest of the banks and WS vs. serving their collective and long-term interest (to the extent that the latter is known). (This is based on J.-J. Rousseau's distinction between the "will of all" (a sum of short-term, particularistic, interests) and the "general will" (shared interests in the long run).) -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
