Random Walk

Angell’s retirement is wonderful news for gold hoarders like me, terrible news for the rest of you. Angell is the last remaining legacy of the Reagan era. When Washington policy wonks want to use monetary policy for economic fine tuning, Angell has held firmly to his puritan view that “the primary aim of monetary policy is to achieve a stable price level.” For his efforts to achieve this and for his persistent crusading for a capital-gains cut, Washington’s attitude seems to be goodbye and good riddance.

Who will replace him? Alice Rivlin, in the Clinton budget office, recently took herself out of the running. Good thing. Bear Stearns’s Larry Kudlow says that, if chosen, Mrs. Rivlin would have made “the IS-LM and Phillips Curves prominent Fed policy tools.” In other words, she believes that prosperity causes inflation. Other contenders are equally uninspiring: George Perry of Brookings, Van Doorn Oooms of the statist Committee for Economic Development, Peter Kenen of Princeton, and Alicia Munnell of Treasury (who gained notoriety for her proposal to raise billions for Uncle Sam by taxing your pension). With the exception of Kenen these are all committed Keynesians. Their economic model runs something like this: high tax rates + easy money = economic growth. They’re halfway there already.

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Angell’s retirement is wonderful news for gold hoarders like me, terrible news for the rest of you. Angell is the last remaining legacy of the Reagan era. When Washington policy wonks want to use monetary policy for economic fine tuning, Angell has held firmly to his puritan view that “the primary aim of monetary policy is to achieve a stable price level.” For his efforts to achieve this and for his persistent crusading for a capital-gains cut, Washington’s attitude seems to be goodbye and good riddance.

Who will replace him? Alice Rivlin, in the Clinton budget office, recently took herself out of the running. Good thing. Bear Stearns’s Larry Kudlow says that, if chosen, Mrs. Rivlin would have made “the IS-LM and Phillips Curves prominent Fed policy tools.” In other words, she believes that prosperity causes inflation. Other contenders are equally uninspiring: George Perry of Brookings, Van Doorn Oooms of the statist Committee for Economic Development, Peter Kenen of Princeton, and Alicia Munnell of Treasury (who gained notoriety for her proposal to raise billions for Uncle Sam by taxing your pension). With the exception of Kenen these are all committed Keynesians. Their economic model runs something like this: high tax rates + easy money = economic growth. They’re halfway there already.