Thursday, December 20, 2007



Yesterday, ECB President Jean-Claude Trichet dismissed calls for rate cuts in Euroland, stating “We have to do our job, and our job is to deliver price stability.” At least one central bank president has a clear sense of what he was hired to do.

Meanwhile, back in this country, Obsequious Ben has rolled out stimulus plan after stimulus plan, testifying to his willingness, indeed his eagerness, to fan the fires of inflation and tank the dollar in order to get into the good graces of Wall Street. When none of those schemes worked, earlier in the week he trotted out some half-hindquartered regulatory regimen designed to make it more difficult to make sub-prime loans. This action is, of course, completely extraneous: how many people are out there right now hustling sub-prime loans? The market has at least begun to address this problem. But this latest regulatory abomination does serve Obsequious Ben’s purposes well: it shows that he is “doing something” for his pals on Wall Street while having little impact on whatever designs the financial finaglers might have on the sub-prime market.

Obsequious Ben’s latest actions also serve another purpose: Any of you who harbored the ingenuous notion that we have a free market Fed Chairman ought to be completely disabused of such an idea by now.

While the President must be born in the United States, the Constitution says nothing about the birthplace of the Fed chairman. The Constitution also says nothing about the Fed—how about that? But that is another conversation. We as a nation have also shown a tremendous acuity for importing great talent, whether in engineering, finance, entertainment, medicine, or athletics. Do you suppose we could somehow lure a diligent Frenchman over here to run our central bank?

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