'Last Economist Standing' John Taylor Urges "Less Weird Policy" At Jackson Hole

Tyler Durden's picture

Economist John Taylor is on his way to join the world’s central bankers at Jackson Hole for the 35th annual monetary-policy conference in the Grand Teton Mountains. As he explains (via EconomicsOne.com)...

I attended the first monetary-policy conference there in 1982, and I may be the only person to attend both the 1st and the 35th.

I know the Tetons will still be there, but virtually everything else will be different. As the Wall Street Journal front page headline screamed out on Monday, central bank Stimulus Efforts Get Weirder. I’m looking forward to it.


Paul Volcker chaired the Fed in 1982. He went to Jackson Hole, but he was not on the program to give the opening address, and no one was speculating on what he might say. No other Fed governors were there, nor governors of any other central bank. In contrast, this year many central bankers will be there, including from emerging markets. Only four reporters came in 1982 — William Eaton (LA Times), Jonathan Fuerbringer (New York Times), Ken Bacon (Wall Street Journal) and John Berry (Washington Post). This year there will be scores. And there were no television people to interview central bankers in 1982 (with the awesome Grand Teton as backdrop).

It was clear to everyone in 1982 that Volcker had a policy strategy in place, so he didn’t need to use Jackson Hole to announce new interventions or tools. The strategy was to focus on price stability and thereby get inflation down, which would then restore economic growth and reduce unemployment. Some at the meeting, such as Nobel Laureate James Tobin, didn’t like Volcker’s strategy, but others did. I presented a paper  at the 1982 conference which supported the strategy.

The federal funds rate was over 10.1% in August 1982 down from 19.1% the previous summer. Today the policy rate is .5% in the U.S. and negative in the Eurozone, Japan, Switzerland, Sweden and Denmark. There will be lot of discussion about the impact of these unusual central bank policy rates, as well the unusual large scale purchases of corporate bonds and stock, and of course the possibility of helicopter money and other new tools, some of which greatly expand the scope of central banks.

I hope there is also a discussion of less weird policy, and in particular about the normalization of policy and the benefits of normalization. In fact, with so many central bankers from around the world at Jackson Hole, it will be an opportunity to discuss the global benefits of recent proposals to return to a rules-based international monetary system along the lines that Paul Volcker has argued for.

He may have a point!!

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Rainman's picture

It's too late ...moar weirder is the only policy left for them now.

Looney's picture


Less Weird Policy At Jackson Hole

Rest in peace, Michael Jackson!   ;-)


knukles's picture

They really are taking a public pillorying today.

"When monetary policy gets tough, the tough get weird"
                          - Dr H S Thompson

BuddyEffed's picture

I hope they invited Nomi Prins to Jackson Hole.

booboo's picture

if it's not weirder than the Magic Negro's trial balloon of a trillion dollar platinum coin and the last decade and a half its normal.

Looney's picture

Duper-in-Chief!   ;-)

mofreedom's picture

I think you meant diaper-head-in-chief, in that he poops out of ears, and not that he is a whitish musl?m.


Kaiser Sousa's picture

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and this is why they've been fucking with the phony paper prices of the only 2 forms of REAL MONEY....


Archibald Buttle's picture

sounds to me like they are testing the waters. jawbone NIRP, the value of protecting your principal etc. scare the sheeple. get them to doubt the safety of their investments and so forth. keep manupulating the PM prices down and stock up on phyzz on the cheap, while reeling in the next round of bagholders. i know that i, and assume that you, walk out of your LCS of choice with a little bigger smile and some extra spring in your step, when they beat down the price of the only two forms of real money. technically playing the same game but on a much smaller scale. eventually, the sheeple won't mind when their pension funds start buying up all the paper gold (and in the process price us folks of regular means out of the phyzz market). that's when they finally let the whole house 'o cards shebang come crashing down. all that will be left is to tie up some loose ends, likecharging us rent for THEIR FUCKING AIR that we are constantly using up.

and oh yeah, death to the moneychangers.

DrSyn's picture

The tram in Teton Village (a stone's-throw from Jackson Hole) can take all the central bankers to the top of Rondezvous Mountain.  My suggestion is that they all go up there during the next thunderstorm and stand as proud and tall as possible.  If they fail to get the inspiration I have in mind, they might try Electric Peak instead (no tram, but the exercise getting up there will do them some good).  Hopefully none of them will try to figure out how Electric Peak got its name, but given the central bankers ability to think creatively (or even to face reality) that shouldn't be a problem.  

mofreedom's picture

If they still have the Alpine Slide there, send them down greased up and without a slide.


RaceToTheBottom's picture

Electrocution is a great idea, but I would be happy with a nice dirty landslide.

Archibald Buttle's picture

just tell them electric peak is where keynes had a vision, tripping on mushrooms back when he was a teenager. he never could quite get the true knowledge once he came down, it was always there on the tip of his tongue, but alas... the ratio of something to the negative something else, it's gotta be in there, somewhere.

Oreilly's picture

He may be the last economist standing and all, but it'd be nice if you could refer to the graphics and then label them so that us non-economists know wtf you're talking about.  I did eventually figure it out, but in the future Tyler, please spoon feed me.

Kefeer's picture

The economist is John TAYLOR - the graph is the visual for reading impaired.  The TAYLOR rule is demonstrating the problem the rule identifies when Fed Fund Rates go below a certain point (the too easy part). 

Taylor’s rule is a formula developed by Stanford economist John Taylor. It was designed to provide “recommendations” for how a central bank like the Federal Reserve should set short-term interest rates as economic conditions change to achieve both its short-run goal for stabilizing the economy and its long-run goal for inflation. - end

YHC-FTSE's picture

Asking for "Less weird policies" from the banksters and assorted crooks who created this batshit crazy global mess of trillions in the la la land of debt and quadrillions of notional derivatives worldwide via the "clever" use of jargon and bullshit like DSGE as euphemisms for printing money to infinity that is tantamount to the largest theft, sorry transfer, of wealth in history is like asking the retards and athletes in the paralympics to stop acting so weird and grow limbs. It ain't happening.

Next they'll be annoouncing debts that pay for itself and nationalising the equity markets. Oh wait.....

Archibald Buttle's picture

so does that mean "transfer" is the new orange? a man can dream...

Offthebeach's picture

The Talor Rule would be more steady, but it has, or I should say , exposes greater problems. First and foremost it would layoff a lot of Fed econmist. So, there you go. Just like your local podunk Department of Motor Vehicles. Not going to happen. Another problem exposed is that existing Fed intervention might be bad, as of course it is, but you can't have the Temple priests admit the obvious.
The third problem would be that favored, influential buisness/givernment would be unmasked, hurt.
So, like the shipless Admirals in the Germnan Navy in the last days of Hitlers bunker, or like house staff in Nero's burning Rome, ant like, zombi like, the monitary eunuchs fritter about, wating for their meals.