{"id":182238,"date":"2015-11-11T23:21:00","date_gmt":"2015-11-12T04:21:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2015\/11\/11\/talk-about-failing-upwards\/"},"modified":"2015-11-11T23:21:00","modified_gmt":"2015-11-12T04:21:00","slug":"talk-about-failing-upwards","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2015\/11\/11\/talk-about-failing-upwards\/","title":{"rendered":"Talk About Failing Upwards"},"content":{"rendered":"

Neel Kashkeri, one of the mismanagers appointed by Hank Paulson to bail out the banksters, has been named to the presidency of the Minneapolis Federal Reserve<\/a>:<\/p>\n

Neel T. Kashkari, who oversaw the government\u2019s bailout of the banking industry as a Treasury official in the George W. Bush and Obama administrations, was named the next president of the Federal Reserve Bank of Minneapolis on Tuesday.<\/span>

<\/span>Mr. Kashkari, 42, will succeed Narayana R. Kocherlakota in that post in January. He will also take Mr. Kocherlakota\u2019s place as the youngest of the 17 members of the Fed\u2019s policy-making committee, the Federal Open Market Committee.<\/span>

<\/span>\u201cMr. Kashkari is an influential leader whose combined experience in the public and private sectors makes him the ideal candidate to head the Minneapolis Fed,\u201d MayKao Hang, a Minneapolis Fed board member who was co-chairwoman of the search committee, said in a statement.<\/span>

<\/span>Mr. Kashkari is the third person this year appointed to lead a regional reserve bank, and all three of the new presidents previously worked at Goldman Sachs. The Philadelphia Fed in March appointed Patrick Harker, a former Goldman trustee, as its new president. The Dallas Fed in August selected Robert S. Kaplan, a former Goldman vice chairman.<\/span>

<\/span>Mr. Kashkari will join a minority of Fed officials who do not have advanced degrees in economics, but he has expressed strong views on monetary policy.<\/span>

<\/span>In 2012, Mr. Kashkari criticized the Fed\u2019s decision to start a second round of bond-buying.<\/span>

<\/span>\u201cAt the end of the day, this is not going to lead to real economic growth,\u201d he told CNBC at the time. \u201cUnfortunately, it likely leads to an inflationary outcome.\u201d<\/span>

<\/span>He also has compared bond-buying to dosing the economy with morphine \u2014 \u201cMakes u feel better but doesn\u2019t cure,\u201d he posted on Twitter in 2013 \u2014 and suggested that financial markets would resist weaning.<\/span>

<\/span>Those views suggest Mr. Kashkari will break with his predecessor. Mr. Kocherlakota began his term at the Minneapolis Fed as a vocal skeptic of the Fed\u2019s ability to improve economic conditions but underwent a battlefield conversion and became a leading proponent of the Fed\u2019s efforts. He is now the only Fed official pushing to expand its stimulus campaign.<\/span><\/p><\/blockquote>\n

So, he’s been wrong on everything, he f%$#ed up the bank bailout, and now he is President of the Minneapolis Fed.<\/p>\n

And another Vampire Squid alumni gets to decide the winners and losers in our economy.<\/p>\n

Paul Krugman also observes that Neel is supremely unqualified for anything resembling banking regulation or monetary policy<\/a> as well:<\/p>\n

So, if the Minneapolis Fed felt the need to maintain conservation of NK, they could have chosen to replace Narayana Kocherlakota with a New Keynesian. Instead, they chose Neel Kashkari. Brad DeLong<\/a> isn\u2019t happy, and this Twitter exchange<\/a> suggests that he has good reason to worry. <\/p>\n

I\u2019ve written before<\/a> about the all-too-common fallacy of confusing demand with supply, of arguing that because we had a bubble \u2014 so that some component of aggregate demand was unsustainable \u2014 the economy as a whole was somehow producing more than its potential. Let me just repeat what I said then:<\/p>\n

\u2026\u2026\u2026<\/p>\n

In the words of Charlie Brown, AAUGH! <\/p>\n

That word \u201cartificially\u201d is the real telltale, as is Kashkari\u2019s description of Japanese monetary stimulus as \u201cmorphine.\u201d It\u2019s straight out of the liquidationist playbook, e.g. Hayek<\/a> denouncing the use of \u201cartificial stimulants\u201d to fight the Great Depression. <\/p>\n

So, great: we now have a liquidationist in a senior position in the Fed system.<\/span><\/p><\/blockquote>\n

<\/p>\n

Not just a liquidationist, a crony capitalist incompetent liquidationist.<\/div>\n
<\/div>\n
I’m feeling so much better about our monetary policy now.<\/div>\n","protected":false},"excerpt":{"rendered":"

Neel Kashkeri, one of the mismanagers appointed by Hank Paulson to bail out the banksters, has been named to the presidency of the Minneapolis Federal Reserve: Neel T. Kashkari, who oversaw the government\u2019s bailout of the banking industry as a Treasury official in the George W. Bush and Obama administrations, was named the next president …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,969,1004,985,982],"tags":[],"class_list":["post-182238","post","type-post","status-publish","format-standard","hentry","category-economy","category-evil","category-finance","category-regulation","category-stupid"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/182238"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=182238"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/182238\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=182238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=182238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=182238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}