Adam asks,

what problems do you think are important today that you didn’t think were important in 2004, and what policies would you favor now that you would have opposed then?

For me the answer is obvious, my once unwavering devotion to an independent Federal Reserve has been shattered. If in 2004 someone had suggested that the Federal Reserve should be more accountable to elected officials then at best I would have smiled and humored them. At worst I would have accused them of democratic fundamentalism and weakness-of-will in the face of our society’s ubiquitous pro-democracy propaganda.

Transparency? Oh, no, no, no, I would have said, Greenspan spoke well, when he quipped

I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said

Giving clear answers only encourages a sense of ease and simplicity, which in turn encourages unexamined input. If people wish to understand monetary policy then A Monetary History of the United States is available at most libraries and every major university subscribes to the Journal of Monetary Economics.

The Great Moderation, I felt, was our greatest triumph and it was achieved only by unshackling financial technocrats from their political masters. I cheered Bob Lucas’ 2003 address to the American Economic Association declaring

[Macroeconomics originally] referred to the body of knowledge and expertise that we hoped would prevent the recurrence of that economic disaster.

My thesis in this lecture is that macroeconomics in this original sense has succeeded: Its central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many decades.

Today, I am banging the table asking why Bernanke won’t explain the Fed’s unwillingness to adopt a 4% inflation target. Today I cannot help but wonder whether the Regional Fed presidents aren’t too far removed from the everyday pain of high unemployment. Do they not know policy failure when they see it?

The extent of my current heresy cannot be overestimated. To my former self the idea that the unwashed masses – a term that would have included members of Congress, notable media pundits and CEOs of major corporations -  had anything useful to contribute to monetary policy was as sensible as saying we should set the Federal Funds rate based on an examination of the entrails of a chicken.

Nor, do I think this was or is even today a minority position. What set Kartik Athreya apart was not his opinions but his willingness to share them with society.

I have gone thoroughly native. But, then again, facts have changed

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