NCPA Commentaries by Bob McTeer
Oct 29, 2008
Today is the second day of a two-day Federal Open Market Committee meeting. The rate decision along with the accompanying verbiage will be released at 2:15 p.m. If I were still there, I'd go in with a tentative idea of how I would vote, but would try to keep an open mind during the presentations and discussions. Today, I would be inclined toward a half percentage point cut, from 1.50 to 1.00 percent.
Oct 10, 2008
One of the victims of the prolonged financial crisis has been my comfort with my belief system. I grew up reading Milton Friedman and taking classes from like-minded professors. When an unfamiliar issue came along, I was quick to ask myself, "What would Friedman think about this?" The answer was usually self-evident, seemed correct to me and fit nicely with my answers to other questions. I came to regard my economic philosophy as "classical liberal" or "economic conservative" to friends who wouldn't be familiar with the first term.
Oct 08, 2008
The Federal Reserve has played whack-a-mole in its efforts to hold back the financial tsunami engulfing the United States and now the world. After an aggressive easing of traditional monetary policy (reducing the target federal funds and discount rates), it then invented and implemented a series of special auction facilities featuring relaxed terms and collateral requirements. These have recently been expanded further. Then only Tuesday it announced that it would try to unfreeze the commercial paper market by lending directly to corporations. Wednesday morning it announced a half-point cut in the federal funds and discount rates coordinated with the European Central Bank, the Bank of England and several others.
Oct 01, 2008
Maybe it's a good thing the "consensus" rescue plan failed on Monday. That gives Congress a chance to pass a plan that helps resolve the current crisis rather than just demonizing Wall Street.
Sep 24, 2008
Don't get me wrong. I'm not going soft on moral hazard, the idea that people behave recklessly if they don't have to deal with the consequences of their actions. But I do think moral hazard is often misunderstood, rarer than we think, and feared more than necessary. And unlike many experts out there, I find little moral hazard in the recent interventions by the Treasury and Federal Reserve.
Sep 15, 2008
I was afraid of accounting in school; I still am. Back then, I feared it would wreck my grade point average; today, I fear it will wreck our financial system.
Mar 08, 2008
When I was president of the Dallas Fed, Alan Greenspan wouldn't let me, or other members of the Federal Open Market Committee (including himself), talk about the dollar. The dollar was so sacred, or so fragile, that only Treasury secretaries were allowed to discuss it -- but convention silenced them too.