These Are The People Who Do Not Want The Fed's Veil Lifted

Tyler Durden's picture

The following individuals whose primary goal in life is getting tenure and publishing a textbook, yet believe they have a voice in deciding whether over 300 million American people should know just whose interests the Fed so staunchly protects, have issued an open letter to Congress and The Executive Branch, demanding that no one ever dare tinker or have audit powers over the private institution that is the Federal Reserve. Those who run hedge funds, operate semi-failed companies, work for an Investment Bank, especially taxpayer bailed out ones, or are otherwise conflicted, are highlighted in bold.

It makes sense to recall that the recent grassroots campaign to enforce the opposite - i.e., more transparency at the Fed, has been supported by over 5,000 individuals at this point. Zero Hedge recommends all who believe in transparency in this time when we have anything but, sign the petition to demonstrate their disagreement with the individuals below.

"Fed Independence" Petition Signatories:

Ricardo Caballero MIT

Kenneth French Dartmouth College

Robert Hall Stanford

Anil Kashyap Chicago Booth

Pete Klenow Stanford

Frederic Mishkin Columbia

Thomas Sargent NYU

Michael Woodford Columbia

Andrew Abel Wharton School,University of Pennsylvania

Daron Acemoglu MIT

Michael Adler Columiba University

Yacine Ait-Sahalia Princeton University

Fernando Alvarez University of Chicago

Scott Anderson Wells Fargo & Co.

Cliff Asness Managing and Founding Principal, AQR Capital Management LLC

Paul Asquith Massachusetts Institute of Technology

David Backus NYU

Dean Baim Pepperdine University/UCLA

Ravi Bansal Duke University

David Bates University of Iowa

Andrew Bernard Dartmouth College

Richard Berner Morgan Stanley

George Borts Brown University

Scott Brown Raymond James & Associates

Markus K. Brunnermeier Princeton University

Ralph C. Bryant Brookings Institution

Michael Carey Calyon Securities (USA) Inc. Credit Agricole Group

Christopher Carroll Johns Hopkins University

Martin Cherkes Columbia University

Diego Comin Harvard University

Jernej Copic UCLA

Dora Costa UCLA

Steven Davis University of Chicago Booth School of Business

Angus Deaton Princeton University

Davide Debortoli University of California, San Diego

Eddie Dekel Northwestern University

Harold Demsetz UCLA

Scott Desposato University of California, San Diego

Douglas Diamond University of Chicago Booth School of Business

Peter Diamond MIT

Francis X. Diebold University of Pennsylvania

Avinash Dixit Princeton University

Matthias Doepke Northwestern University

Darrell Duffie Stanford

Pierre Collin Dufresne Columbia

Martin Eichenbaum Northwestern University

Andrea Eisfeldt Northwestern UniversityKellogg School of Management

Jeffrey Ely Northwestern University

Eduardo Engel Yale University

Eugene Fama University of Chicago Booth School of Business

Henry Farber Princeton University

Roger Farmer UCLA

Jon Faust Center for Financial Economics, Johns Hopkins U.

Michael Feroli J.P.Morgan

Wayne Ferson U.S.C.

Kristin Forbes MIT-Sloan School of Management

Mark Gertler New York Univiersity

Marc Giannoni Columbia University

Simon Gilchrist Boston University

Robert J. Gordon Northwestern University

Roger Gordon UCSD

David Greenlaw Morgan Stanley

Gene Grossman Princeton University

Steffen Habermalz Northwestern University

James Hamilton University of California, San Diego

Gary Hansen UCLA

Robert Hansen Tuck School, Dartmouth College

Gordon Hanson UC San Diego

Milton Harris University of Chicago Booth School of Business

Tarek Hassan University of Chicago Booth School of Business

Zhiguo He Chicago Booth

John Heaton University of Chicago

D. Lee Heavner Analysis Group, Inc.

Christian Hellwig UCLA

Gailen Hite Columbia Business School

Yael Hochberg Kellogg School of Management, Northwestern University

Stuart Hoffman PNC Financial ServicesGroup

Bengt Holmstrom MIT

Bo Honore Princeton University

Peter Hooper Deutsche Bank

Takeo Hoshi University of California, San Diego

Christopher House University of Michigan

Peter Howitt Brown University

Chang-tai Hsieh University of Chicago

Ellen Hughes-Cromwick Chief Economist, Ford Motor Company

John Huizinga University of Chicago Booth School of Business

Erik Hurst University of Chicago Booth School of Business

Ravi Jagannathan Kellogg School of Management, Northwestern University

Dana Johnson Comerica Bank

Karen Johnson Federal Reserve Board of Governors (retired)

Charles I. Jones Stanford University, Graduate School of Business

Paul Joskow MIT

Matthew Kahn UCLA

Juno Kang The Bank of Korea

Steven Kaplan University of Chicago Booth School of Business

Bruce Kasman J.P. Morgan Chase

Peter Kenen Princeton Uniiversity

Ralph Koijen University of Chicago Booth School of Business

David Kotok Chariman, Central Banking Series, Global Interdependence Center, Philadelphia, PA.

Arvind Krishnamurthy Northwestern University

Rafael La Porta Dartmouth College

David Lake University of California, San Diego

Bruce Lehman UCSD

Nan Li Ohio State University

Hilarie Lieb Northwestern University

John Liew AQR Capital Management

Juhani Linnainmaa University of Chicago Booth School of Business

Andrew Lo MIT

Kevin Logan Dresdner Kleinwort

Guido Lorenzoni MIT

Hanno Lustig UCLA Anderson

Louis Maccini Johns Hopkins University

Burton Malkiel Princeton University

Eric Maskin The Institute for Advanced Study, Princeton University

Robert McDonald Kellogg School, Northwestern University

Daniel McFadden University of California, Berkeley

Doug McMillin Louisiana State University

Rajnish Mehra UC Santa Barbara

Robert Mellman J.P. Morgan

Robert Merton Harvard University

Laurence Meyer Macroeconomic Advisers, LLC

Atif Mian University of Chicago

Gregory Miller Suntrust Banks, Inc.

Robert Moffitt Johns Hopkins University

Stephen Morris Princeton University

Dale Mortensen Northwestern University

Giuseppe Moscarini Yale University

Tobias Moskowitz University of Chicago, Booth School of Business

Stefan Nagel Stanford

Maurice Obstfeld University of California,

Lee Ohanian UCLA

Maureen O’Hara Cornell University

Stavros Panageas University of Chicago BoothSchool of Business

Dimitris Papanikolaou Northwestern University

Robert Parry President & CEO, Federal Reserve Bank of San Francisco, Retired

Lubos Pastor University of Chicago BoothSchool of Business

Lasse H. Pedersen NYU

Monika Piazzesi Stanford

Keith Poole University of California, San Diego

Giorgio Primiceri Northwestern University

Valerie Ramey University of California, San Diego

Enrichetta Ravina Columbia University

Esteban Rossi-Hansberg Princeton University

Michael Rothschild Princeton University

Tano Santos Columbia Business

Ulrike Schaede University of California, San Diego

Richard Schmalensee MIT

Martin Schneider Stanford

Kermit Schoenholtz NYU Stern School of Business

Jay Shanken Emory

Robert Shiller Yale University

Hyun Shin Princeton University

Stephen Shore Johns Hopkins University

Costis Skiadas Northwestern University

Matthew Slaughter Dartmouth College

James F. Smith Kenan-Flagler Business School, UNC-Chapel Hill

Chester Spatt Carnegie Mellon University

James H. Stock Harvard

Rene Stulz The Ohio State University

Amir Sufi University of Chicago Booth School of Business

Joseph Swanson Northwestern University

Vefa Tarhan Loyola University Chicago

Edwin M. Truman Peterson Institute for International Economics

Harald Uhlig University of Chicago

Andrey Ukhov Northwestern University

Sergio Urzua Northwestern University

Chris Varvares Macroeconomic Advisers, LLC

Pietro Veronesi University of Chicago

Paul Wachtel New York University, Stern School of Business

Richard Walker Northwestern University

Mark Watson Princeton

Shang-jin Wei Columbia

David Weil Brown University

Pierre-Olivier Weill UCLA Economics

Burton Weisbrod Northwestern University

William Wheaton MIT

Michael Whinston Northwestern University

Mirko Wiederholt Northwestern University

Mark Witte Northwestern University

Tiemen Wouteren Johns Hopkins University

Jonathan Wright Johns Hopkins University

Wei Xiong Princeton University

Stanley Zin New York University


And here is the text of the endorsed letter:

Open Letter to Congress and the Executive Branch

Amidst the debate over systemic regulation, the independence of U.S.
monetary policy is at risk. We urge Congress and the Executive Branch
to reaffirm their support for and defend the independence of the
Federal Reserve System as a foundation of U.S. economic stability.
There are three specific risks that must be contained.

First, central bank independence has been shown to be essential for
controlling inflation. Sooner or later, the Fed will have to scale back
its current unprecedented monetary accommodation. When the Federal
Reserve judges it time to begin tightening monetary conditions, it must
be allowed to do so without interference. Second, lender of last resort
decisions should not be politicized.

Finally, calls to alter the structure or personnel selection of the
Federal Reserve System easily could backfire by raising inflation
expectations and borrowing costs and dimming prospects for recovery.
The democratic legitimacy of the Federal Reserve System is well
established by its legal mandate and by the existing appointments
process. Frequent communication with the public and testimony before
Congress ensure Fed accountability.

If the Federal Reserve is given new responsibilities every effort
must be made to avoid compromising its ability to manage monetary
policy as it sees fit.

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Anonymous's picture

TD juxtapose that news with this one:

A large group of investors with $3 trillion in securities assets and former top regulators on Wednesday released a report attacking the White House's proposal to give the Federal Reserve more power as part of a massive regulatory restructuring under consideration on Capitol Hill.

svendthrift's picture

Now we have a list for when the dollar collapses. Good stuff.

Hondo's picture

I'll put my vote for transparency and audit against any one of these nits!!


PS:  I really don't think that many are really that smart......hear me Cliffy.

Anonymous's picture

Are you the guy Rick & I had dim sum with in S.M., LA about 10 years ago? I call Rick every month at his house in PA.
I trust the free market (free people) to choose a monetary system. Money is too important to be controlled by gov.

Anonymous's picture

Considering the growing population of the world, money and "monetary policies" aren't actually the questions anymore. More important at this point of time, is the fact of the "american-empire" exploiting it's "democratic policies" over the entire world - taking the resources which all people need to survive, with the money they print "out of thin air". so now, the question isn't "do we have enough money in the world?", but, "do we have the resources, for everyone?"

thank-you for listening! (ok...reading) ;-)

agrotera's picture

The talk media completely misrepresented this petition--i guess the x-enron lobbyist sent out press releases to the unsuspecting, but the proof is in the pudding.  God how the lies can grow--and like someone said, 'getting rid of a bad statistic is harder than killing a vampire'--yes and getting rid of conventional wisdom that is perpetually supported with more lies is even more of a nightmare.


What an unbelievable lie!!!The Fed's independence is a strawman--our country deserves to know that the privately held Federal Reserve corp is  a monopoly of mammoth proportions and runs every elected official (except for maybe r paul, and a. grayson).  The elected officials that can't stop kissing the ring of this monster, need to be ousted out of office, and the Fed's charter needs to be revoked--we would still have the Fed, but it would be owned again, by our country, not by private parties. This is NOT socialistic but socialism is the clever way that the big bank heist for all the fed member banks was accomplished--pls wake up and don't buy it--think.

Anonymous's picture

What we have here is tenured and politically connected guys trying to protect their retirement while the rest of the country be damned... These bearded nutwads don't want anyone to rock their boat. Why would anyone want to kill the golden goose, unless offcourse that golden goose doesn't come to your door to lay the nugget.

Anonymous's picture

And we thought the liberal institutions are against business and anti establishment. Talk about being mislead by misinformation and psycho-babble.

Anonymous's picture

is that 'the' Robert Schiller?

Arm's picture

Shiller.  Yes, that's him

Anonymous's picture

These idiots actually think the FED is independent??? HAHAHAHAHAHAH

Anonymous's picture

It is independent silly. It is just independent of the country, its people busy making a bounty for its independent members who keep rotating into and out of politics.

crazyjerrygarcialover's picture
crazyjerrygarcialover (not verified) Jul 15, 2009 3:55 PM

The Fed is actually the true governing body of the US.  Wasn't it a Rothschild who said something to the effect of, "Give me control of the money and I don't care who makes the laws."  The Fed is a shadow government masquerading as a private corporation with a mandate from the 1913 act.  The basic charter serving as the backbone for that act was crafted by Rockefeller, Mellon, Carnegie, Morgan, et al.  The Fed doesn't serve to protect us, it serves to protect itself/banks.

Anonymous's picture

Now I see why my alma mater went from $32k to $56k/yr from 2001 to 2008. Academia is one the main beneficiaries of the inflation of money and credit. They get paid to give intellectual cover to these monsters.

Anonymous's picture

The bulk fuel distributor just left.
I just bought 300 gallons of diesel and 300 gallons of gasoline.

If Ron Pauls' HB 1207 and S 604 fails to pass the streets of America will run with blood.

agrotera's picture

Hey all you great researchers-- it would be so wonderful if one of you would take on the challenge of looking to see if any member banks of the federal reserve have gone down vs the toobigtofail banks that were annointed too precious to fail ( and the affiliated hedge funds that use to be investment banks ).


CIT bank is in the news--funny how it's affiliated bank (CIT Bank) is NOT a FED member bank and all kind of hullaballo is happening about to save or not to save...funny that the Fed's member banks seemed to be protected without question--is it like mafia protection--the member banks are the money producers for the fed so they get protection?


Anonymous's picture

The letter reads like it was written five years ago before the Fed turned American capitalism into a farce.

Anonymous's picture

@ #7360

American capitalism has been a farce for far more than five years.

Anonymous's picture

Why can't we have both a transparent and independent FED. Is it too much to ask?
(P.S> I disagree, independence is very important factor, however given the FED played along with absolutely every white house scheme, I don't see how anyone can call it independent; my point is that most of those people that signed are probably fooled by the purpose of this letter. )

Anonymous's picture

I think it was more like the White House played along with every FED scheme.

Anonymous's picture

Shocking that Brad DeLong didn't sign it.

Anonymous's picture

Why is it that those who are supposedly more educated are so stupid?

Anonymous's picture

It is easy to reason using just bare facts with a person with commonsense but not learned. It is improbable to reason with an educated individual with no commonsense.

Anonymous's picture

Not stupid at all.

Where has price inflation outpaced the rate of general inflation? Academics.

With no Fed-induced inflation, these clowns wouldn't be able to hide their empire building. Imagine if the only price that went up year-after-year was the price of education.

Wouldn't be easy to hide.

rogersails's picture

Somewhere in this debate, transparancy became equated with independence.


Anonymous's picture

large number of academics - why

agrotera's picture

Groupthinkthinktank members

FischerBlack's picture

Every single one of them wants to be called in by the Fed for some kind of CV builder to raise their profile and allow them to study things from the inside for their Nobel work. They're prostitutes. Economics is social science and there are no right answers, just mountains of data supporting contradictory positions on all three sides of a binary issue. They're never held to account for anything they do or say. What a great job. When I'm wrong I loose oodles of money and everyone thinks I'm a twit. .

But, in fairness, I like economics, and some economists -- anyone from GMU pretty much.

Anonymous's picture

I spy Fama in there. Fucking circle jerk.

zeropointfield's picture
zeropointfield (not verified) Jul 15, 2009 2:10 PM

The democratic legitimacy of the Federal Reserve System is well established by its legal mandate and by the existing appointments process. Frequent communication with the public and testimony before Congress ensure Fed accountability.


Ahem. Is that so? If all legistlative powers are vested in Congress and if not properly delegated the exercise of power is illegal, how can a delegation under the Constitution be proper when it effecitvely takes an entity and puts it outside - and above the - law and establishes a body that has neither accountability to nor real oversight by Congress?

The Federal Reserve Act puts the Fed outside the Constitutional order and is thus void. The Fed does not have authority whatsoever.

pcdunham's picture


I tend to agree with most of what you write but not in this case.  I don't think Fed transparency and this letter this letter defending monetary policy independence are mutually exclusive.  I think this letter is directed at the grilling of Bernanke a couple of weeks ago.  I'm pretty sure we can all agree that many of the Representatives asking questions had no idea what they were talking about and were doing a bit of grandstanding. (Given that the Representatives all seemed to be regurgitating the exact same questions, they all probably asked their staffers to prepare questions and those staffers all asked the same person) To my point, the letter specifically addresses ability to remove the unprecedented monetary accommodation when necessary and interference with personnel selection.  Further, the Fed minutes released today mention treasury purchases. Specifically, it was mentioned that much larger purchases were necessary to materially affect long term rates but there is a risk that markets may interpret expansion of purchases as monetizing the deficit.  I understand the argument for transparency.  However, The Fed is probably resisting congress because if they do concede any independence, the floodgates of political pressure may open which would crush the dollar.  Personally, Larry Summers a Chairman of The Fed is a bit scary. To conclude, the signatories are more concerned with ability to remove monetary accommodation not transparency.

agrotera's picture

Sorry what you said, " The Fed is probably resisting congress because if they do concede any independence, the floodgates of political pressure may open which would crush the dollar."...just ain't so!!!!! The money printing, the passing of US$'s to "toobigtofail" was a scheme that looks very crooked to all the world and when a country becomes corrupt, the currency follows.  If we could redo the lies of the fall, and unwind, MS, GS, MER and C or let them be bought in pieces the way that broken entities deserve, and need to be treated, the world would view us as honest again.   It won't be the blackmailing of the US to "keep the Fed status quo or else" that breaks the US$, it will be the US continuing to allow the corruption that has prevailed in it's apex over the last 10 months thanks to all the agents and shills of the privately held federal reserve monopoly. 


The easy smell test on all of this is to take notice--all that so called "need for liquidity" that was "SO" important last fall only accomplished keeping the failed entities alive-but, it didn't provide any added liquidity.  And there won't be any 'mopping" up of liquidity, only the big hammer to fall on all of our heads by an increase in the fed funds rate--so the federal reserve member banks make even more on their margins....very corrupt.


No, if the dollar fails, it will be because wethepeople have allowed this banana republic to take hold in our cherished republic--not because we have awakened and decided to resist, and take back mammoth corrupt power from the privately held federal reserve corporation. 

Comrade de Chaos's picture

I mostly agree with "pcdunham ", however without transparency there is no way for us to make sure that FED is independent. Right now it seems to follow everything that comes out of White House with absolute obedience. FED was planned as a tool of financial stabilization and not the economic planning. As far as I am aware, we don't have any economic planning bodies that were designed for the economic planning. And since suddenly we do, maybe we should stop calling ourselves a free market economy.

pcdunham's picture

That makes sense, and I'm not arguing against transparency.  Just trying to point out that the petitiion and signatories aren't arguing against transparency either.  There should be a distiction between transparency and independence.

Anonymous's picture

"Finally, calls to alter the structure or personnel selection of the Federal Reserve System easily could backfire by raising inflation expectations and borrowing costs and dimming prospects for recovery."

This is the statement that bothers me. How is that transparency or changing personnel or altering the structure would raise inflation expectations and interests and dim the prospects for recovery? They never defend the statement. And if that were really true, then it means that inflation expectations and interest rates are being held unnaturally low for no other reason than the perception of the people at the helm. And if that's the case, then why bother with the macroeconomic modeling? Why not just take a series of opinion polls and say it's the "animal spirits" of the marketplace? If the Fed's veil is removed, so too will be the alchemy that is macroeconomics. The whole discipline is a joke.

pcdunham's picture

Go do some research on central banks where staff is changed without warning by elected politicians. Do some statistical analysis of interest rates and see which central banks have higher interest rates and inflation.  The letter doesnt say rates are dependent on specific personel.  Its remarkably smple. altering personel or structure introduces uncertainty to confidence in the currency.

Anonymous's picture

all them crooks should be jailed

economessed's picture

I have mixed emotions about all this.  On one hand, the Federal Reserve needs to be held accountable.  On the other hand, the whole Federal Government needs to be held accountable.


I have great confidence in both of these institutions to fail spectacularly due to their endemic confluence of greed, corruption and bureaucracy.  My only uncertainty surrounds whether they have failed sufficiently at this point.  I suspect they'll need to screw-up in a more flagrant and absurd way before the collase gets fully underway.

Anonymous's picture

and by signing the petition, I'm sure to have my phone tapped, mail opened, taxes audited, etc. Suer, where do I signup. REVOLUTION NOW!

Veteran's picture

Bwaaahahahaha.  The opinions of the educational industrial complex are worth exactly jack shit.  Those phonies played a huge role in this mess as well.  As an aside was always amazed at how wonderfully my professors explained how things worked in the real world.  You know, the same world they were too chicken shit to join so they hid out in academia their whole life.


You want to get laid, go to college.  You want an education, go to the library.

-Frank Zappa

Anonymous's picture

unfortunately, the fed will never be audited. the bill will neverr reach a vote. people will be spoken to.

Anonymous's picture

I feel like I'm on acid reading this... Why do the opponents of this bill assume that "audit power" = "policy control"? Could someone explain?

Anonymous's picture

As others have noted abovev, I don't think this letter was meant to address the bills to audit the fed. It's addressing other concerns.

Anonymous's picture

Wow....great comments all around.........I think that we need to reserch the backgrounds of the signers of the letter/petition, and find out what connections they have to the major banks. Methinks that somewhere there is a little back scratching and hand smothing going on. Revolving many of these are economists who have "consulted" for the Fed or for members. Just wondering outloud!

Anonymous's picture

did you guy read post from and john rubino at the dollar is in for an imminent devaluation no later that 9/15/2009. their logic is solid. i believe so too because we can't just print paper dollars and force upon the world to accept them. that is why tim geithner at middle east and saudi right now to tell them continue accept dollars for oil. that is why chinese president mr. Hu rather skipped g-8 meeting to go back to his country to prepare. news said because of ethinic classes but i don't think so. 135 han dead chineses will not change a thing for a president of more than 1 billion people during an important meeting. china does not need us anymore, they can consume their product themselves or ship to other countries can buy without borrowing them money.
here are links

hedgnome's picture

I'm shocked. Really.

Members of the eduacational/financal/political establishment rushing to defend the Fed's independence?


hohack's picture

there was a day of          





way back when,

Miles Kendig's picture

When the folks who are advancing the concept of not only continued Fed secrecy, but of greater Fed powers are forced to premise the basis of their argument upon the all emcompassing umbrella of Fed independence to set monitary policy rather than upon the requirements for Fed secrecy to protect the formal banking system from the same fate the shadow banking system suffered at the hands of its "depositors" or primary sources of funding, or any other discussion of the matters at hand then those of us that support greater transparency of the operations of the Fed are gaining the upper hand in the debate.


In other words, the failure to address the primary issue in the debate is another means of communication of the admitted weakness of the position.