I’ve put together a PDF file that summarizes the current Federal Open Market Committee. My objective in this exercise is provide a handy way of getting data on the various Members of the Federal Open Market Committee. It was also a way for me to better understand who is making out monetary policy, and from a social angle, try to understand their biases.
Most of the data in the PDF file (Excel file available here), comes from the Fed’s own websites. I reorganized it, and deleted some bits of data that I thought were less important. I added links to their bio, books, speeches, academic papers, etc. (Full disclosure: if you buy a book from Amazon using one of the links, I get a small commission.)
When I look at this data, what jumps out at me is the number of Ph. D. economists – they are 10 out of the 15 here, then three MAs in Economics and related fields, one MBA (Fisher) and one JD (Warsh). (Personally, I would want to limit the number of Neoclassical economists on the committee to five, and put in a few Austrian School economists. Monetary policy is too important to be left to a bunch of Neoclassical economists.) Beyond that, among the economists, there are many of them that have done direct work on the inter-linkages between monetary policy and financial markets (Bernanke, Kohn, Kroszner, Mishkin, Plosser, Evans, and Lacker). A number of them have written about central banking and financial markets under conditions of stress.
Historically, it would be hard to find a group of Fed Governors more prone to using unorthodox methods to try to fight a crisis in the financial markets. They have the training for it, and they do not want to go down as not having learned from the received wisdom on monetary policy regarding the Great Depression. They will be fast, not slow. Unorthodox, not orthodox, and bending/breaking the rules where possible. They will tolerate a possibly large permanent increase in inflation, and avoid the Japanese experience 1990-Present. They will pursue a unilateral course of action, and ignore foreign grumbling.
This is the FOMC that we have today, and the composition of the committee matters when considering how they will execute monetary policy. Expect aggressive responses, with considerable volatility.
Two postscripts: To me, the Committee seems young, with an average age of 51. Second the compostion of the committee will likely change after the elections, because Congress is holding up the nominations that President Bush has put forth. The nominees are Fed Governor Randall Kroszner, whose term officially ended Jan. 31, Capital One Financial Corp. executive Larry Klane and Virginia community-banker Elizabeth Duke. Kroszner can continue to serve at the Fed until a successor is appointed.
The two businessmen would have been an interesting addition, but will not likely be approved because of the politics. The one that wins the presidential election will have a large impact on the Fed, because he will get to appoint three board members. The current economic volatility will have a large impact on the skill set of those that get nominated.