NCPA Commentaries by Bob McTeer

Bob McTeer is a Distinguished Fellow at the National Center for Policy Analysis (NCPA), covering macroeconomic issues, including monetary policy, fiscal policy, tax and education policy

Bob is best known for his 36-year career with the Federal Reserve System, including 14 years as President of the Federal Reserve Bank of Dallas and member of the Federal Open Market Committee (FOMC).

  • Dec 15, 2008

    Make Fair Value Fair

    The last time I looked I couldn't find mark-to-market accounting in the Constitution of the United States. It must be the eleventh commandment because it's obviously sacred. I understand the President has the authority under the Emergency Powers Act, or some such legislation, to suspend the Bill of Rights in case of a national emergency. Well, we have a national emergency, so mark to market must be more important than the Bill of Rights.

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  • Dec 10, 2008

    The Impact of Foreign Trade on the Economy

    Foreign trade has become more important to our economy in recent years. Exports and imports of goods and services have grown rapidly. A growing trade volume benefits our standard of living in several ways, but, as the recession deepens, my focus here will be limited to the impact of the trade balance on America's gross domestic product and, by implication, its job market. G.D.P and employment generally move in the same directions; so what I say about the impact on G.D.P generally applies to employment as well.

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  • Dec 03, 2008

    Productivity and the Job Market

    As the recession deepens, unemployment will continue to rise. How far it will rise largely depends on how much spending by consumers, businesses and the government slows - since demand for products affects whether companies expand or shrink their payrolls - and on how many people join or leave the labor force.

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  • Nov 05, 2008

    A Random Walk Off a Cliff: ‘Beating’

    I've always been fascinated by the question, "If you're so smart, why aren't you rich?" Why don't the experts have an advantage in stock-picking? Or do they? Are markets so efficient that they incorporate all relevant information instantly and leave us nothing to trade on? Or, can some investors "beat the market" consistently?

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  • Oct 29, 2008

    The Fed's Balance Sheet

    The sharp growth in the Fed's consolidated balance sheet has received much attention lately. Some have questioned the Fed's balance-sheet capacity to continuing providing liquidity at home and abroad, and some have worried about the inflationary consequences of its balance-sheet growth down the road. This essay will address these issues--briefly.

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  • Oct 29, 2008

    Come With Me to the F.O.M.C.: A Sneak Peak Into Fed Life

    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.

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  • Oct 10, 2008

    My Own Crisis Of Confidence

    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.

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  • Oct 08, 2008

    Don’t Worry About Inflation Accelerating

    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.

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  • Oct 01, 2008

    Stop Treating Wall Streeters Like Villains and Resolve This Crisis

    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.

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  • Sep 24, 2008

    Revisiting Moral Hazard

    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.

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