As his retirement date approchaes, Kansas City Fed President Tom Hoenig has become increasingly critical of the Federal Reserve, the big banks, and quantitative easing. His recent comments on a trip to Denver included this:
“Over a decade we’ve used monetary policy as an instrument to solve all problems,” Hoenig, who will step down in three months, told the audience at the Denver Association of Business Economists breakfast. “We know where that’s gotten us.”
Hoenig apparently forgot that The Fed prevented a second depression and that we’re in a glorious recovery.
Meanwhile, on a totally and utterly unrelated note, CNBC reports that “New Rules Put Clamp on Chatty Fed Officials” and that the Fed has grown weary of Fed officials who criticize the central bank’s policies.
“To the fullest extent possible, Committee participants will refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm, or organization who could profit financially from acquiring that information,” the Fed said in a statement.
Such a statement is so broad as to basically muzzle any Fed official from expressing personal views to anyone who is particularly interested in Fed policy.
The Fed no doubt misses the good ol’ days when Alan Greenspan spake and no one dared contradict The Maestro. Now that no one cares what the Maestro thinks while Bernanke openly admits he doesn’t know what he’s doing, it’s apparently time for some obedient silence from Fed officials. Hoenig couldn’t care less given his retirement, but one should probably expect even less diversity of opinion coming from the FOMC and other organs of the central bank in the future.