In my interview with the former president of the Federal Reserve Bank of Dallas and Distinguished Fellow at the National Center for Policy Analysis we discussed the economic impacts of mark to market, the Geithner plan, Keynes' paradox of thrift, the Fed's balance sheet, and the necessary deftness to remove monetary stimulus in a timely fashion.
The length of the interview is 12 minutes and 2 seconds.
The 1913 Fed Reserve act (and Bagehot's Lombard) allow patient nursing of just about any troubled assets. Why is it any different if the Fed holds them, or if demagogic frivolities like RFC, RTC or TARP do so? It all goes back to Joseph's Pharaoh or Confucius ever-normal granary holding on to underpriced grain until famine.
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