Review: An Open Letter to Ben Bernanke – That’s it?

Since none of my break out ideas have triggered this morning I had some time to catch up on my reading.  One article struck me.  In an open letter to Ben Bernanke, posted in the Wall Street Journal’s Real Time Economics blog (at bottom of article), several ‘top tier’ economists and hedge fund managers scold the Federal Reserve for their policy initiative saying it will not work. They offer instead a vague statement about improving tax, spending and regulatory policies as a better focus. That’s it? Why did they even bother writing the letter?

Giving them the benefit of the doubt, since they are all supposed to be very smart people, I suggest that maybe there were other ideas that came out of the group but did not make the final cut. Perhaps the conversation went something like this:

Michael Boskin and John Taylor from Stanford: What about this ‘Hey Ben you know California is in trouble, why not give us the money’?

Niall Ferguson, historian of money: Gentlemen, that is a very US centric suggestion. Global economies are becoming more interconnected. With the crisis in Greece and Ireland, soon to be followed in Portugal, why don’t you chaps buy those countries? I have been to all three for my PBS series and Greece and Portugal have wonderful beaches, better than California, and Ireland has the golf you all love?

Douglas Holtz-Eakin former budget director: That could complicate the budget process having more than one currency to deal with.

James Grant, Grant’s Interest Rate Observer: That would certainly halt the rise in rates on their bonds. Would we have to assume their debt?

Cliff Asness: Excuse my, I have to go to the men’s room (…and tweak my algo’s to account for this…)

Amity Shlaes, Council on Foreign Relations: I think that is essential. Otherwise we run the risk of them not being nice to us on the beach or giving us late afternoon tee times.

David Malpass, GroPac (what?): I am not sure that will accomplish anything either and I know everything about economics, just ask Jimmy Dean, he used to follow my advice explicitly at Bear Stearns, oh wait.

Seth Klarman, Baupost: You mean, Jimmy Cayne, you moron.

Kevin A. Hassett, former Member Fed Board of Governors: This all sounds very complicated. I have been at the Fed and will tell you we need to make it simple for everyone to understand.

William Kristol, Editor the Weekly Standard: I think I can make it understandable for everyone. Shall I give it a try?

All: Yes, please do and then sign our names.

The result: Open Letter to Ben Bernanke

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