J. Bradford Delong is an economics professor at Berkeley, a co-author with Larry Summers of several papers, and a former deputy assistant Treasury secretary for economic policy from the Clinton Administration. He opposes Bernie Sanders’ amendment to audit the federal reserve, which the White House also opposes. But just barely. In a long post on his blog, he explains his hesitations, and offers a pointed challenge to President Obama. (A vote is expected next week on a compromise version of the Sanders’ amendment, which will allow both sides to save face with a one-time audit.)
So I am willing to defer to President Obama’s judgment that the Federal Reserve’s desire for a modicum of central banker privilege is worth respecting, and that the Sanders amendment is the wrong treatment for the disease. I am willing to do so, in large part, because I think the problems are not those that detailed routine investigations of staff communications would solve: the staff of the Federal Reserve do, it seems to me, overwhelmingly have a reality-based vision of the economy, conduct thorough and appropriate analyses of risks and scenarios, and understand the Federal Reserve’s dual mandate.
But I ask President Obama: What is your alternative? What is your alternate plan for improving the quality of Federal Reserve decisions–for getting policymakers who properly understand the state of the economy and who believe in the Federal Reserve’s dual mandate? It’s very hard to beat something–even a bad something–with nothing. And you have had… eighteen months, with only the appointment of Dan Tarullo and the reappointment of Ben Bernanke to show for it.
The entire post, which includes a long explanation of the concerns over Fed audits, is worth reading here.