It takes a strong man to look at Ben Bernanke's gentle, bearded face and tell him to piss off. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, is just such a man.
Lacker's used every opportunity to let Bernanke and his rotating cast of puppets know that they're wrong about the stimulus and that they're imperiling what used to be the Fed's only mission, controlling inflation. And he's apparently doing so at substantial risk to his own standing, because while bickering, name-calling and kicking-and-screaming disagreement is all the rage every else in the District of Columbia, dissent does not go over well at the marble Politburo on Constitution Avenue NW.
Last year, Mr. Lacker cast the sole dissenting vote at each of the eight meetings of the Fed’s policy-making committee, only the third time in history a Fed official dissented so regularly….
“The Fed is a club and dissenting puts you outside the club,” said Allen H. Meltzer, a professor of economics at Carnegie Mellon University who is a leading historian of the central bank. “You send the message to the public and that’s a good thing, but you also send a message inside the Fed and that’s not a good thing. You are isolating yourself.”
And opening yourself up to criticism that wounds the cheerful, self-proclaimed man of humility.
“It’s very unfair to think of me as not caring about the unemployed,” he said. “It just seems to me that there are real impediments, that just throwing money at the economy is unlikely to solve the problems that are keeping a 55-year-old furniture worker from finding a good competitive job.”
“I haven’t been running around like my hair’s on fire,” he said. “And I think for me that reflects some humility. I’m not absolutely certain that the risks I worry about are going to show up. The majority of the committee, and the course they’re on, they could be right.”
“And,” he said, “I sincerely hope that they are right.”