Editore"s Note
Tilting at Windmills

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February 23, 2006
By: Kevin Drum

FEMA-IZING THE FED....If you were nominating someone for a seat on the Federal Reserve, what would you look for? At a guess, you'd want someone with a PhD in economics and a good background in monetary policy, right?

Instead, how about a law degree, a few years of experience in the M&A trenches at Morgan Stanley, a well honed loyalty to the White House, and a father who donates a lot of money to Republican causes? Because that's what we just got in 35-year-old Kevin Warsh, who was recently confirmed to an empty Fed seat. As Noam Scheiber says:

Even the heyday of Reagan-era economic quackery didn't produce a Fed nominee as lacking in qualifications or experience as this one. The only way you appoint Kevin Warsh to a seat on the Federal Reserve board is if you have little respect for the practice of economic policy-making and you're not ashamed to admit it. But, then, we already knew that about George W. Bush.

I understand why Republicans continue to rubber stamp appointments like this, but what's up with Senate Democrats? This is the Fed, for God's sake, not an ambassadorship to Luxembourg. What excuse do they have?

Kevin Drum 5:55 PM Permalink | Trackbacks | Comments (102)

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Comments

. . . what's up with Senate Democrats? What excuse do they have?

Shear weariness at the need to oppose virtually every Bush decision because virtually every Bush decision is one fraught with incompetency and corruption.

Posted by: Advocate for God on February 23, 2006 at 5:58 PM | PERMALINK

Battered Wife Syndrome?

Posted by: Keith G on February 23, 2006 at 6:01 PM | PERMALINK

Shit, Kevin. "Core competencies" is sooooo 9/10!

Posted by: Roxanne on February 23, 2006 at 6:04 PM | PERMALINK

Despite my loathing for Nader for the damage caused by his 2000 candidacy, I must admit that he was largely right about pox on both the parties.

Posted by: lib on February 23, 2006 at 6:04 PM | PERMALINK

Boy, you liberals are never happy. If this gentlement is credentialed enough for the President, he credientialed enough for me. You liberals would probably nominate the skeleton of Karl Marx. :(

Posted by: HappyConservative on February 23, 2006 at 6:04 PM | PERMALINK

Maybe they are waiting for just the right moment, just the right issue, so they can be clever and morally superior ... like other useful Dems.

Posted by: Freedom Phukher on February 23, 2006 at 6:04 PM | PERMALINK

What was the vote on the guy? How'd they rubber stamp him when they don't even own a stamp in Congress??

Posted by: nightshift66 on February 23, 2006 at 6:05 PM | PERMALINK

Democrats should just feed the meme: cronyism, hackery, and incompetence. People have been noticing ever since Katrina and Brownie.

--
HRlaughed

Posted by: HRlaughed on February 23, 2006 at 6:05 PM | PERMALINK

Kettle, meet Mr. Pot.

Posted by: nut on February 23, 2006 at 6:06 PM | PERMALINK

I understand why Republicans continue to rubber stamp appointments like this, but what's up with Senate Democrats? What excuse do they have?

That's one reason I am not a Democrat. They tend to get my votes by default, but they don't do much for me, except that they are not Republicans.

In related Fed news , it reports that average family income, after adjusting for inflation, fell by 2.3% between 2001 and 2004 -- compared to a 17.3% gain in average after-inflation income Americans enjoyed during the prior three-year period. GW Bush describes that as "healthy and vigorous."

Posted by: Nemo on February 23, 2006 at 6:08 PM | PERMALINK

Not ambassador to Luxembourg, but just maybe he'll have is head blown away by Cheney on his next hunting trip.

Posted by: CSTAR on February 23, 2006 at 6:09 PM | PERMALINK

What, was Harriet busy?

Posted by: craigie on February 23, 2006 at 6:10 PM | PERMALINK

Maybe Daddy gave them money, too?

Posted by: Cal Gal on February 23, 2006 at 6:12 PM | PERMALINK

HappyConservative, *..credentialed enough for the President, credientialed enough for me..*

And therein lies the basis for most of the current jokes.

Posted by: wishIwuz2 on February 23, 2006 at 6:13 PM | PERMALINK
If you were nominating someone for a seat on the Federal Reserve, what would you look for? At a guess, you'd want someone with a PhD in economics and a good background in monetary policy, right?

Maybe, maybe not. Certainly, I'd want someone with a good background in monetary policy, which clearly includes a solid understanding of economics, but I don't think a degree in the field is necessary if there is other background that demonstrates the required skills.

But, yeah, that doesn't seem to be the case here.

I understand why Republicans continue to rubber stamp appointments like this, but what's up with Senate Democrats?

"What's up with Senate Democrats?" Now there's a recurring question with, all too often, no good answer.

Posted by: cmdicely on February 23, 2006 at 6:14 PM | PERMALINK

I understand why Republicans continue to rubber stamp appointments like this, but what's up with Senate Democrats? This is the Fed, for God's sake, not an ambassadorship to Luxembourg. What excuse do they have?

On this issue Kevin, I agree with you.

The fact that Dems have been bending over on appointments like this makes me furious. I'll write another stern letter to Boxer and Feinstein, which will in all likelyhood be shitcanned like all the rest.

Posted by: Osama_Been_Forgotten on February 23, 2006 at 6:14 PM | PERMALINK

For the record, it's his father-in-law who gave the money, not father.

Posted by: jb on February 23, 2006 at 6:15 PM | PERMALINK

In related Fed news , it reports that average family income, after adjusting for inflation, fell by 2.3% between 2001 and 2004

What I found most interesting was at least some of the Fed 3 year numbers were "the worst since 1992".

Like father, like son, huh?

Posted by: pdq on February 23, 2006 at 6:16 PM | PERMALINK

Democrats should just feed the meme: cronyism, hackery, and incompetence. People have been noticing ever since Katrina and Brownie.

They can't, because their complicitness and lack of opposition makes them IMPOTENT HYPOCRITES.

When do we dump the entire Democratic party into the ocean and start over with a new opposition party? These people are worthless. Even if you're going to lose, it's worth voting NO on something like this.

Posted by: Osama_Been_Forgotten on February 23, 2006 at 6:17 PM | PERMALINK

Kevin Drum >"...what's up with Senate Democrats? This is the Fed, for God's sake, not an ambassadorship to Luxembourg. What excuse do they have?"

Can you say NSA intercepts ?

How about Chandra Levy ?

you may be collectin a lot of "dots" but you sure aren`t trying very hard to connect them ALL

Think boy, think !

Syriana writ larger one might suggest

"The future will be a struggle between huge competing systems of psychopathology." - J. G. Ballard

Posted by: daCascadian on February 23, 2006 at 6:18 PM | PERMALINK

M&A trenches?

Posted by: Hedley Lamarr on February 23, 2006 at 6:19 PM | PERMALINK

It's like Grover Norquist said, once you make them understand they've been rendered impotent, they settle down and accept it. Isn't it what you want, Kevin? For Democrats to be responsible and not make a fuss with that adversarial... *liberal*... opposition stuff? See, I understand why I wish democrats would kick the table over and get angry. No progress ever got made without people pushing the boundaries, and no good thing was ever defended against malice without a little shouting.

Look at the vitriol over women being so unreasonable as to want the vote, and doing these extreme things to get what they could never have. But they got the vote, and now we think it's the most reasonable thing in the world that they should get the vote, and wasn't it silly of them to act out with such extreme stunts, when everyone knows they'd have got the same results by just asking reasonably? Right.

If you, the moderate Democrat, are unhappy with the accommodating state of Democrats today, you're going to have to make your peace with the embarrassing lefties you always thought were such a drag. Turns out you never knew how much you owed them.

Posted by: derek on February 23, 2006 at 6:23 PM | PERMALINK

This whole think reminds me of that joke about two women applying for a job. One has great credentials, the other has a great personality. Which one gets the job?

The one with the biggest tits.

Except in Bush-world, the translation is: "which one gets the job? The one who's the biggest crony."

Posted by: craigie on February 23, 2006 at 6:24 PM | PERMALINK

Kevin, don't you realize that Kevin Warsh married a gal named Jane? This particular Jane is worth close to a billion dollars. So why shouldn't the Fed go with this guy?

Follow the money. It has nothing to do with rubber-stamping.

The wealthy have to manage our money, silly.

Or...isn't it great that we have a government for the rich and nothing but the rich, so help us God?

..."Warsh is married to Jane Lauder, granddaughter of Estee Lauder."

http://blogs.wsj.com/law/2006/02/16/kevin-warsh-has-got-it-going-on/

http://www.samsloan.com/elauder.htm

Posted by: Tom Nicholson on February 23, 2006 at 6:30 PM | PERMALINK

It's even worse than that. A former friend of mine from college is in a very prominent position on the Bush economics team. Not only does he have no business or economics background to speak of (like me, he has a law degree) but his main qualification seems to be that he worked on the Florida recount.

I have vivid memories of studying with him for our basic economics class sophomore year. Neither of us knew what the hell was going on, and yet he has a job setting economic policy at the White House. Which, I suppose, explains a lot....

Posted by: Stefan on February 23, 2006 at 6:36 PM | PERMALINK

I'm with OBF and lib. The Democrats are a feeble excuse for an opposition. I dropped out when some voted for Clarence Thomas, and I see with Alito that they still haven't learned.

And let's stop blaming Ralph Nader. Over 40 million people voted for GWB in 2000, and it's a pretty sure bet that Nader was not one of them. Let's blame the people who cast the votes, not the people who run for office.

Posted by: Larry on February 23, 2006 at 6:41 PM | PERMALINK

Many Democrats voted to give President Bush war powers to invade Iraq. Many Democrats voted for Patriot Act. Many Democrats voted for those tax cuts for the rich. Many Democrats voted for the pharma Medicaid bill. Many Democrats voted to keep funding the occupation in Iraq. Some Democratic presidential nominee hopefuls continue to call for more US troops to serve in Iraq. I see a trend, and it does not endear me to the Democratic Party, which is another word for cloth coat Republicans.

Posted by: Hostile on February 23, 2006 at 6:42 PM | PERMALINK

This appointment is interesting. If there has been a driver of the Bush administration it is to please big business interests. Hence his appointment of Bernanke to head the Fed, a genuinely qualified and serious person (or at least I have read nothing to the contrary).

Perhaps this appointment is evidence that Bush has decided to do what he wants, screw everybody. Who knows.

Posted by: Ugh on February 23, 2006 at 6:43 PM | PERMALINK

Come on, they can't stop a catastrophically bad pair of choices for the supremes, you expect them to put a ton of effort into a single member of the fed? Not only would they still fail, they'd be marginalized as petty on every pundit show that they so dearly hope to be invited back to.

At this point, their strategy seems to be to give Nero all the matches he wants. I hope there is something left worth governing when they get the chance.

Posted by: Mysticdog on February 23, 2006 at 6:45 PM | PERMALINK

Christ, I just realized I know Warsh from school. I'm gonna have to dig into this....

Posted by: Stefan on February 23, 2006 at 6:49 PM | PERMALINK
Let's blame the people who cast the votes, not the people who run for office.

I'm capable of blaming different categories of people for the same effect when both contribute. I can blame Bush and Gore and Nader and a bunch of voters and Kerry and the media and, heck, even myself for not being active enough.

Blame is not exclusive.

Posted by: cmdicely on February 23, 2006 at 6:55 PM | PERMALINK

You're kidding me?

Well, it's not like screwing up at the Fed can do any damage.

I swear, just when you swear this guy has hit rock bottom in his incompetence, you discover it was just a ledge.

Posted by: theorajones on February 23, 2006 at 7:03 PM | PERMALINK

Except in Bush-world, the translation is: "which one gets the job? The one who's the biggest crony."

The one with the biggest BFB*.

(Boner For Bush)

Posted by: obscure on February 23, 2006 at 7:04 PM | PERMALINK

Here are the Democratic members of the Senate Banking Committee, who unanimously approved Warsh:

Paul S. Sarbanes, Ranking Member (D-MD)
Christopher J. Dodd (D-CT)
Tim Johnson (D-SD)
Jack Reed (D-RI)
Charles E. Schumer (D-NY)
Evan Bayh (D-IN)
Thomas R. Carper (D-DE)
Debbie Stabenow (D-MI)
Robert Menendez (D-NJ)

A video of the hearing can be found here.

Posted by: alkali on February 23, 2006 at 7:18 PM | PERMALINK

They always told me you can do anything with a law degree.

Posted by: Christopher M on February 23, 2006 at 7:23 PM | PERMALINK

Dayum.

I'd have expected a warning smoke signal from Brad DeLong or something...

Posted by: RT on February 23, 2006 at 7:29 PM | PERMALINK

Anyone else think it's getting hot in here?

Posted by: stovetop amphibian on February 23, 2006 at 7:32 PM | PERMALINK

They always told me you can do anything with a law degree.

But sometimes you need to be able to do it well.

Posted by: frankly0 on February 23, 2006 at 7:34 PM | PERMALINK

Not me. I don't understand how the Republicans can do this, unless they all have shit for brains. And here I just thought they were greedy jerks. This kind of thing is going to blow up in EVERYONE's face. Where are the so called moderates and "true" conservatives in the party? Probably waiting for the Dems to take the lead. Like that's gonna happen.

Posted by: jussumbody on February 23, 2006 at 7:36 PM | PERMALINK

So what's the verdict on Randall Kroszner?

Posted by: tbrosz on February 23, 2006 at 7:48 PM | PERMALINK

Ambassador to Luxembourg? Shit, I challenge anyone here to name the US Ambassador to Australia.

Go on, use Google: who's the US Ambassador to Australia?

Posted by: floopmeister on February 23, 2006 at 8:00 PM | PERMALINK

Here's a picture of the Governor and the Meal Ticket.

http://www.flickr.com/photos/18089544@N00/91820342/

Posted by: beowulf on February 23, 2006 at 8:00 PM | PERMALINK

Watch the hearings. Warsh has majored in Economics at Stanford and graduated Phi Betta Cappa. And when he went to Harvard Law school his focus was on fiscal and monetary policy. In short his education was primarily focused on economics.

http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=189

Posted by: Jeff on February 23, 2006 at 8:06 PM | PERMALINK

This is how the Republicans do business...rich kids get jobs when their daddies contribute money to political campaigns (and/or wield inordinate influence in other areas).

It's called patronage and cronyism, and the opposite of a merit society.

But, you have to give W. Bush credit where due, he gives back to his own roots and those taking his own career path (i.e. he "looks out for his own").

Posted by: Jimm on February 23, 2006 at 8:19 PM | PERMALINK

Go on, use Google: who's the US Ambassador to Australia?

I used to know it without Google: the brother of Bob 'CBS News' Schieffer. Now he's gone to Japan, the position's vacant, which probably means a professional is in charge.

Posted by: ahem on February 23, 2006 at 8:33 PM | PERMALINK

Quiet, Jeff. They're on a roll.

Posted by: tbrosz on February 23, 2006 at 8:40 PM | PERMALINK

Warsh has majored in Economics at Stanford and graduated Phi Betta Cappa. And when he went to Harvard Law school his focus was on fiscal and monetary policy. In short his education was primarily focused on economics.

Fax from the Dept of Unintentional Humor.

Posted by: frankly0 on February 23, 2006 at 8:41 PM | PERMALINK

We don't have an Ambassador in Canberra right now. The last one was recalled/kicked out in Feb 2005 for meddling in local politics to a degree impossible to tolerate in a 'diplomat'. IIRC correctly Schieffer was a Republican donator/buffoon.

Do I get a cookie?

Posted by: winna on February 23, 2006 at 8:43 PM | PERMALINK

PhD's are good, but too many PhD's is too much. Alan Greenspan would have benefited from actual time spent on the trading floor.

Posted by: Slothrop on February 23, 2006 at 8:43 PM | PERMALINK

And when he went to Harvard Law school his focus was on fiscal and monetary policy. In short his education was primarily focused on economics.

You can't "focus on" fiscal and monetary policy at HLS as it doesn't offer any courses on that.

After HLS Kevin was at Morgan Stanley, where his focus was on dealmaking, not economics.

Posted by: Stefan on February 23, 2006 at 8:47 PM | PERMALINK

winna: cookie indeed.

Wonder when this incompetent administration will get around to appointing another? It's only been a year...

Posted by: floopmeister on February 23, 2006 at 8:48 PM | PERMALINK

What's really funny is our Ambassador to the Court of St James.

He's a car dealer. No, sadly, I'm not joking.

Posted by: winna on February 23, 2006 at 8:53 PM | PERMALINK

What's really funny is our Ambassador to the Court of St James.

He's a car dealer.

Sorta apt, i would have thought.

"Now this reconditioned Iraqi war, Mr Blair, is the one for you. Only one owner (bit of a wimp, didn't push it too far) and comes with an ironclad 'slam dunk' guarantee."

"Oh, and there's our exclusive 'funded by Iraqi oil' repayment scheme, which means it won't cost a thing!"

Posted by: floopmeister on February 23, 2006 at 9:02 PM | PERMALINK

"I see no harm in giving Bobby a little legal experience before sending him out to practice the law." -- JFK, on nominating RFK for Attorney General, when his brother had never done any actual legal work.

Posted by: theAmericanist on February 23, 2006 at 9:02 PM | PERMALINK

You can't "focus on" fiscal and monetary policy at HLS as it doesn't offer any courses on that.

7:33 into the hearings.

"Later he studied economics and regulatory policy at Harvard Law School where he focused his course work on market economics and debt capitol markets".

Posted by: Jeff on February 23, 2006 at 9:06 PM | PERMALINK

Forgot to add:

"taking classes at Harvard Business school and the MIT Sloan school of business."

Posted by: Jeff on February 23, 2006 at 9:08 PM | PERMALINK

He may have taken classes at HBS and Sloan on market economics and debt capital (not capitol) markets, but he certainly didn't take them at HLS. Law school = courses on law, not on economic policy. Any corporate law classes he took would have been focused on legal regulatory issues, not economics.

But then again, so what? I know literally dozens of people with MBAs from Harvard, Sloan, Wharton, etc. as well as many many more with law degrees from HLS and every other top law school in this country -- does that mean we're all qualified to sit on the Board of Governors?

It's nonsense. Claiming that a few elective economics courses taken a dozen years ago in any way qualifies him for the position is absurdist puffery.

Posted by: Stefan on February 23, 2006 at 9:18 PM | PERMALINK

Gee, how many people here had grades good enough to get jobs at Morgan Stanley? I'll bet Kevin, from the University of Spoiled Children, didn't.

Posted by: y81 on February 23, 2006 at 9:19 PM | PERMALINK

I went to hear a fed board member speak here in Austin (there was a free lunch involved)...he spent 45 minutes rambling on about how the earth was only 4000 years old and he had "seen the proof".

Needless to say, I already had a poor opinion of fed board members.

Snoop

Posted by: Snoopy on February 23, 2006 at 9:28 PM | PERMALINK

Gee, how many people here had grades good enough to get jobs at Morgan Stanley? I'll bet Kevin, from the University of Spoiled Children, didn't.

*raises hand* Oooh, oooh, me, me, I did! I did!

Listen, Morgan Stanley makes money, it doesn't do policy. It's not a brain trust, though there are very many highly intelligent people who work there. But the type of work it does is deal-making, not policy. If the mere fact that Warsh worked at Morgan (and he was only an executive director, not an MD) qualifies him for the post, then there are tens of thousands of others at Morgan, Goldman, Citi, etc. who are equally qualified.

Posted by: Stefan on February 23, 2006 at 9:29 PM | PERMALINK

Actually, the more I think about it, experience as a successful car dealer may be one of the best backgrounds possible for an ambassador.

Posted by: tbrosz on February 23, 2006 at 9:42 PM | PERMALINK

He may have taken classes at HBS and Sloan on market economics and debt capital (not capitol) markets, but he certainly didn't take them at HLS. Law school = courses on law, not on economic policy. Any corporate law classes he took would have been focused on legal regulatory issues, not economics.

But then again, so what? I know literally dozens of people with MBAs from Harvard, Sloan, Wharton, etc. as well as many many more with law degrees from HLS and every other top law school in this country -- does that mean we're all qualified to sit on the Board of Governors?

It's nonsense. Claiming that a few elective economics courses taken a dozen years ago in any way qualifies him for the position is absurdist puffery.

I'm not arguing he's qualfiied enough for the position. To me anything less than a PHD in Ecnomics is insuffiecient. I just thought that Noam's article was somewhat misleading in that he gave the mistaken impression that Warsh hasn't had much of an economic education.

Posted by: Jeff on February 23, 2006 at 9:42 PM | PERMALINK

I just thought that Noam's article was somewhat misleading in that he gave the mistaken impression that Warsh hasn't had much of an economic education.

Take a look at the CVs of the people who ACTUALLY get Ph.Ds at good economics departments, e.g., MIT. Note the remarkable level of academic excellence. Tell us how that compares to some guy who manages to get into, say, even the Harvard MBA program because of his "leadership" qualities (W somehow comes to mind).

Posted by: frankly0 on February 23, 2006 at 9:51 PM | PERMALINK

repubs, dems they are all the same. infowars.com can explain it to you that havent discovered they are all working towards a new world order.

Posted by: kharl on February 23, 2006 at 9:52 PM | PERMALINK

What an interesting series of exchanges. I'm surprised that so many of the conservatives responding are so ignorant of the importance of real expertise on the Fed as to think that Warsh was qualified. But the fact that they are so ignorant makes it easier to understand that they really don't understand how incompetent the President is, and how poor his managerial and policy judgments are. Of course, it's been so long since we had an incompetent Democrat as president - you have to go back to the early twentieth century at this point - it's easy to overlook that we could always pull one out of the deck on the next deal, and there'd be plenty of liberals who'd be as blind to his/her incompetence as these wingnuts are to W.'s. Still, I would have thought that conservatives would be more likely to recognize the importance of expertise in the management of monetary policy. It's food for thought.

Posted by: dcbob on February 23, 2006 at 9:56 PM | PERMALINK

Actually, the more I think about it... tbrosz

Don't strain yourself, now...

Posted by: floopmeister on February 23, 2006 at 9:58 PM | PERMALINK

I agree with Kevin that the Senate Democrats have little excuse for rolling over on such appointments. But extending my previous thought, I don't really understand why Republicans would rubber stamp the appointments either. Why doesn't an organized group of 40-50 senators have enough power to call BS on an incompetent president? They've each got a great deal of local power, and all politics is local. Why can't they collectively confront a chief executive who can barely tie his shoes, TurdBlossom or no? They control the purse strings, for pete's sake. It really puzzles me.

Posted by: dcbob on February 23, 2006 at 10:01 PM | PERMALINK

I'm surprised that so many of the conservatives responding are so ignorant of the importance of real expertise on the Fed as to think that Warsh was qualified.

Ah, but what do the Chinese think about him? He'll be a member of the team running their North American investments, won't he?

Posted by: floopmeister on February 23, 2006 at 10:23 PM | PERMALINK

That was sarcasm, BTW, for the pedantically inclined...

:)

Posted by: floopmeister on February 23, 2006 at 10:28 PM | PERMALINK

What excuse do they have?

no excuse. they're muthafukkin retarded wastes of my goddamned energy.

Posted by: cleek on February 23, 2006 at 10:29 PM | PERMALINK

given the current state of mainstream economics departments, we're far better off with people who refrained from spending a lot of time in them.

bernanke was a serious academic nomination. but we need people more in tune with how businesses actually work in order to save his ass when inflation targeting goes off the rails.

Posted by: rufustfyrfly on February 23, 2006 at 10:33 PM | PERMALINK

I just thought that Noam's article was somewhat misleading in that he gave the mistaken impression that Warsh hasn't had much of an economic education.

It's not misleading at all -- Warsh hasn't had much of an economics education. He has, however, taken some business classes, and a few theory classes over a dozen years ago, but that is hardly the same thing as a fully-rounded economics education. I probably took some of the same classes that Warsh did, and it's all I can do to stagger my way through a basic economics textbook. There's a rather big difference between experience in practical deal-making, which Warsh has, and expertise in higher-level theory, which he doesn't.

Posted by: Stefan on February 23, 2006 at 10:35 PM | PERMALINK

Just for fun, I've been asking some friends what they remember of him, and here's some of the responses: "not particularly distinguished," "a bit of a tool," "no apparent qualifications for this job," etc.

Posted by: Stefan on February 23, 2006 at 10:39 PM | PERMALINK

"This is the Fed, for God's sake.."

Good grief, yes, we count on the fed to correct our big government socialist adventures. Without them watching over things, we could never have such fun!

Posted by: Matt on February 23, 2006 at 10:39 PM | PERMALINK

I've been asking some friends what they remember of him, and here's some of the responses: "not particularly distinguished," "a bit of a tool," "no apparent qualifications for this job," etc

Aren't these the sorts of comments that people who were on corporate boards with W, back in his dilettant days, said about our glorious leader? Seriously, I'm not kidding. I seem to recall exactly this from people who sat on boards with Shrub.

Posted by: craigie on February 23, 2006 at 10:43 PM | PERMALINK

Former insider and ex-true-believer John DiIulio's observations are relevant and worth reposting here:

In eight months, I heard many, many staff discussions, but not three meaningful, substantive policy discussions. There were no actual policy white papers on domestic issues. There were, truth be told, only a couple of people in the West Wing who worried at all about policy substance and analysis, and they were even more overworked than the stereotypical, non-stop, 20-hour-a-day White House staff. Every modern presidency moves on the fly, but, on social policy and related issues, the lack of even basic policy knowledge, and the only casual interest in knowing more, was somewhat breathtaking -- discussions by fairly senior people who meant Medicaid but were talking Medicare; near-instant shifts from discussing any actual policy pros and cons to discussing political communications, media strategy, et cetera. Even quite junior staff would sometimes hear quite senior staff pooh-pooh any need to dig deeper for pertinent information on a given issue.

This gave rise to what you might call Mayberry Machiavellis -- staff, senior and junior, who consistently talked and acted as if the height of political sophistication consisted in reducing every issue to its simplest, black-and-white terms for public consumption, then steering legislative initiatives or policy proposals as far right as possible. These folks have their predecessors in previous administrations (left and right, Democrat and Republican), but, in the Bush administration, they were particularly unfettered.

When your party philosophy is that government is by its very nature incapable of actually governing, policy is necessarily rendered meaningless, data is a threat, and and all that's left is continuously consolidating one's political standing by putting the right warm bodies into jobs.

An approach that sadly precludes principle from ever trumping politics.

Posted by: Windhorse on February 23, 2006 at 11:15 PM | PERMALINK

If I remember right, I got a '5' in the AP test for Econ way back in the day. I guess that would qualify me for a spot on the board of governors too. Now to raise enough cash to donate to the RNC...

Posted by: Dustbin Of History on February 23, 2006 at 11:47 PM | PERMALINK

"The Republicans are the party that says government doesn't work and then they get elected and prove it."
~P.J. O'Rourke

Posted by: craigie on February 23, 2006 at 11:48 PM | PERMALINK

A law degree doesn't qualify me to work at the Fed? What the hell am I going to law school for??

Posted by: Alexander Wolfe on February 23, 2006 at 11:54 PM | PERMALINK

As a current MBA student, I wouldn't sneeze at an Morgan Stanley investment banker. Once apon a time, such people were people who came from the right background, but now that it's a traded company, they are a fair bit more meritocratic about who they hire. Furthermore, anyone valuing a major publicly traded company for a merger or aquisition has a reasonably good knowledge of macroeconomics.

That said, I'd rather have an economics PhD on the fed board, and if they came from a Wall Street firm like Morgan Stanley, I'd prefer they came from either research or trading over investment banking. And I'd prefer they not be a crony, but rather be chosen on the basis of merit.

Posted by: Robert B on February 24, 2006 at 12:05 AM | PERMALINK

A law degree doesn't qualify me to work at the Fed? What the hell am I going to law school for??

Good question. I mean, it's not like there's a shortage of lawyers, is there? So why *are* you going to law school? Just wanna get that license to steal?

Posted by: Maldini on February 24, 2006 at 12:09 AM | PERMALINK

As a current MBA student, I wouldn't sneeze at an Morgan Stanley investment banker. Once apon a time, such people were people who came from the right background, but now that it's a traded company, they are a fair bit more meritocratic about who they hire.

I wouldn't sneeze at a Morgan investment banker if I was looking to engage an investment banker (not that Warsh was ever particularly distinguished there, though, as he never stayed long enough to make MD). But he's not up for a position as a dealmaker, he's up for a position as, basically, a high-level economic theorist. I've worked as a lawyer at a top law firm, but that doesn't qualify me to sit on the Supreme Court, for example.

Furthermore, anyone valuing a major publicly traded company for a merger or aquisition has a reasonably good knowledge of macroeconomics.

Not at the level one needs to work at the Fed. C'mon, that's just ridiculous.

Posted by: Stefan on February 24, 2006 at 12:16 AM | PERMALINK

Schumer sat with and nominated him.

Posted by: P on February 24, 2006 at 12:51 AM | PERMALINK

I've worked as a lawyer at a top law firm, but that doesn't qualify me to sit on the Supreme Court, for example.

Stefan, when I'm president, you're my first SCOTUS pick.

Posted by: craigie on February 24, 2006 at 1:37 AM | PERMALINK

y81 on February 23, 2006 at 9:19 PM:

Gee, how many people here had grades good enough to get jobs at Morgan Stanley?

Heh. You'd be suprised.

Posted by: grape_crush on February 24, 2006 at 1:55 AM | PERMALINK

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Posted by: David on February 24, 2006 at 5:11 AM | PERMALINK

Republicans want those interest rates to be plunging by November, and this is the way to do it.

Posted by: bob h on February 24, 2006 at 7:04 AM | PERMALINK

"Furthermore, anyone valuing a major publicly traded company for a merger or aquisition has a reasonably good knowledge of macroeconomics." (I said.)

"Not at the level one needs to work at the Fed. C'mon, that's just ridiculous." (Stefan said.)

Oh, I agree with you, as I made clear (I thought) in my second paragraph. I was just responding to the general idea that picking someone from Morgan Stanley was the equivalent of picking a professional jockey or a hairdresser to be on the Fed board. While being an MS banker is hardly enough (especially if, as pointed out, he never made MD), those guys are, at least, pretty smart and necessarily know something about macroeconomics. Again, that alone should not be enough to satisfy anyone that this guy is qualified for the Fed.

Posted by: Robert B on February 24, 2006 at 10:19 AM | PERMALINK

I'm trying to recall what my Grandpa said to me many years ago.

Oh, yeah, he said "It's not what you know it is who you know."

I laughed at him. What an old-fashioned idea. Just like unions. I told him we don't need unions anymore. He said "*Nobody* needs unions when times are good. Wait until times are bad."

But he's dead now. And 9/11 changed everything. Uh huh.

Posted by: Tripp on February 24, 2006 at 10:33 AM | PERMALINK

Oh, I agree with you, as I made clear (I thought) in my second paragraph. I was just responding to the general idea that picking someone from Morgan Stanley was the equivalent of picking a professional jockey or a hairdresser to be on the Fed board. While being an MS banker is hardly enough (especially if, as pointed out, he never made MD), those guys are, at least, pretty smart and necessarily know something about macroeconomics. Again, that alone should not be enough to satisfy anyone that this guy is qualified for the Fed.

Yeah, but "pretty smart" is nothing at all. Everyone I know is "pretty smart." It's merely a basic minimum level of competence at this level.

To put it in military terms, picking an MS ED to be on the Fed Board is the equivalent of taking a captain in the US Army, immediately promoting him to four star general and placing him on the Joint Chiefs of Staff.

Posted by: Stefan on February 24, 2006 at 10:45 AM | PERMALINK

You are right, Kevin. This is all the Democrats' fault. Have you accepted that job editorializing at the Washington Post yet?

Posted by: brewmn on February 24, 2006 at 11:26 AM | PERMALINK

It is no harder to vote no than to vote yes. Sustaining a filibuster is difficult, but voting "no" when an incompetent is named to an agency that is supposed to exercise independent judgment is a no-brainer.

Posted by: Joe Buck on February 24, 2006 at 12:07 PM | PERMALINK

You can't "focus on" fiscal and monetary policy at HLS as it doesn't offer any courses on that.

Posted by: Stefan

Yeah, I was bemused by this claim as well. Contracts, yes. Fiscal and monetary policy, no.

Posted by: CFShep on February 24, 2006 at 12:45 PM | PERMALINK

I recall my interview with the Fed Reserve Bank in Dallas.

Here's what I was told:

"You are clearly the superior candidate for this position. Head and shoulders above any other applicant. I will recommend that you be hired, but as I'm leaving to take up a position in academia, my recommendation won't carry that much weight."

He then told me not to hold my breath.

He went to predict, correctly, that the position would be filled by a 'well-connected, white male graduate of the University of Texas".

Bingo.

Some things don't change. Just don't patronize me with that phony crap about 'meritocracy', okay?

Posted by: CFShep on February 24, 2006 at 12:55 PM | PERMALINK

"M&A trenches?"
Posted by: Hedley Lamarr on February 23, 2006 at 6:19 PM | PERMALINK

Mergers and Acquisitions

------------

OMG, the scales are descending from my eyes and I clearly see now that almost all Democrats in Congress are Vichy. OMG. .... same ol' same ol'

I agree that a NO vote is as easy to make as a YEA vote. There's no excuse for those Dems to go along to get along with torturers and murderers and thieves.

Posted by: MarkH on February 24, 2006 at 2:37 PM | PERMALINK

Very simple: No balls and fewer brains.

Posted by: Biil Arnett on February 24, 2006 at 4:36 PM | PERMALINK

Couldn't help but comment Kevin. I didn't know this was a role playing blog. Kepp the dialog going though. Heavens know the MSM need the help.


"I understand why Republicans continue to rubber stamp appointments like this, but what's up with Senate Democrats? This is the Fed, for God's sake, not an ambassadorship to Luxembourg. What excuse do they have?"

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Posted by: 国际贸易公司 on February 25, 2006 at 8:44 PM | PERMALINK

Shame on the Democrats for letting this happen. Shame, especially, on Chuck Schumer, who glowingly introduced Warsh to the Senate Banking Committee. I have always been a fan of Chuck and was shocked. Then I found that Chuck, too, is on the take. Chuck received $17,500 from the Estee Lauder Company (http://www.opensecrets.org/politicians/detail.asp?CID=N00001093&cycle=2000) and $2,000 from Evelyn Lauder. Chuck may get his comeuppance, though. I wouldn't be surprised if Warsh serves part of his term and then runs against Schumer with serious Lauder, Wall Street, and national GOP money. Warsh is, after all, a politician (not an economist).

Posted by: Follow the Money on February 26, 2006 at 12:02 AM | PERMALINK




 

 

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