Fed's Fisher Pulls No Punches

Posted by Kevin G. Hall on November 5, 2013 

— Tell us how you really feel Richard Fisher.

Speaking to a gathering of Australian business economists, the president of the Federal Reserve Bank of Dallas blasted the Obama administration and Congress for working against the economic recovery the Federal Reserve has been trying to bolster.

While Fed chief Ben Bernanke uses cautious language like headwinds from fiscal policy, Fisher outright accused official Washington of slowing growth and harming average Americans.

The inability to agree on a budget over the past five years, he said, and ill-conceived across-the-board cuts in federal spending has shaved as much as a full percentage point off of growth, he said in remarks prepared for delivery to the

"It is no small wonder that the most expansive monetary policy the FOMC has ever engineered has been hampered from accomplishing what it set out to do. In short, while the Fed has been moving at the speed of a (baby) boomer in full run, the federal government of the United States has at best exhibited the adaptive alacrity of a koala (without being anywhere near as cute)." Fisher said.

He didn't stop there.

"This can be demonstrated with some simple math from the most elementary formula for calculating gross domestic product (GDP). Private expenditures on goods and services increased at a 3.2 percent rate over the expansion to date, whereas GDP has increased at 2.2 percent. One could say that GDP would have risen at 3.2 percent had government expenditure increased at the same rate as private expenditure. Or, more modestly, if government spending had just been held constant, instead of contracting, GDP would have grown at an annual rate of 2.6 percent," he said, spelling out how the administration and Congress have hampered recovery.

On a lighter note, Fisher noted his father Leslie was a native Australian who emigrated to the United States and lived a long life.

"My dad lived to the ripe old age of 90. He was a tough old bird. And Aussie to the bone. For most of his life, he smoked three packs of cigarettes a day and drank a great deal of Scotch," Fisher recalled. "He admitted to this one evening and a friend said, 'Hold on. My father was a smoker and also drank a lot of Scotch. But he died at 60. What gives?' To which my father replied, 'Well, he just didn't do it long enough.'"

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