This will remove one of the few voices on the FOMC ever raised against the central bank’s reckless monetary policy.
Now, at their newly announced quarterly press conferences (its latest act of desperation), the Fed can speak with one voice about the virtues of future QE 3 through QE Whatever without any pesky member questioning the officially infallible Bernanke.
In an ironic twist, if the Fed had actually followed Hoenig’s advice, the Fed might have (at least in the short term) avoided the death spiral of public opinion in which it now finds itself. Hoenig never dissented on the Fed’s easy money because he’s opposed to central banking of course. He wanted tighter money because he was afraid that the Fed’s profligacy would undermine and cripple the Fed. Hoenig likes the Fed and thinks it could do good in the world. Thus he didn’t want it to be seen as reckless and incompetent.
Too late. The defeats for the Fed are mounting. Its press conferences, its recent loss at the Supreme Court, and the regularly scheduled undermining of the institution served up by Ron Paul at his Monetary Policy subcommittee are beginning to take their toll.
It’s been fun to watch Hoenig in recent months. As his retirement has drawn closer, he’s become more and more willing to criticize official Fed policy in a variety of forums. He’s no doubt disappointed that the Fed has handled things so badly, and perhaps he may be one of the lucky ones now that he’s on his way out.