Wednesday, July 15, 2009

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

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,

Berkeley 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

School 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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