The Dallas Fed distributes a bi-monthly publication called Southwest Economy. Opening the latest one to appear in my mailbox, for January/February 2006, I began to read the “President’s Perspective,” by the bank’s president Richard W. Fisher, on p. 2. After a couple foggy paragraphs about globalization, its effects, and the new questions it supposedly raises, the statement lists several such questions.
The first one is, “Does declining U.S. unemployment still fuel inflation in a world of abundant production capacity?” I was stunned. It seems that, for the Dallas Fed job, Mr. Fisher has been obtained from a deep cavern underneath MIT, where he has been in a coma since 1965 (not that, even then, anybody had a good excuse for believing such nonsense).
In a nation with a central bank, the blind lead the deluded.