Reverse Antidisestablishmentarianism And the Fed

As for the gravest sin of the QE era, in the fiscal year 2015, the U.S. government paid 1.8 percent on public debt. One would be hard pressed to identify any other debtor whose borrowing costs decrease despite its trebling in debt outstanding. Actually, that's a privilege we need to protect. As for indemnifying the nation's balance sheet, that opportunity has been squandered by spineless politicians who would rather maintain the veneer of scant deficits rather than extend the maturity of the nation's debts. Our wise neighbors to the south recently issued a 100-year bond. Where, one must ask, is our leaders' wisdom when we need it most?”

This is a quote from a new addition to a highly respected research service. The writer, Danielle DiMartino Booth, has left the Dallas Fed, where she worked for nine years, and penned her first blog after joining my good friend Philippa Dunne at Liscio. Full disclosure: I don't normally take sides, but I'm on their side. They are both fishing buddies and campers at our annual gathering in Maine. More importantly, they are smart and unafraid.

Danielle has written her first missive with a reverse antidisestablishmentarianism twist. Her target, unlike Gladstone’s in 1869, is not the official state church in Ireland. Her darts are aimed instead at the policy outcomes she suggests have derived from the actions of her former employer, the Federal Reserve. Thus, like Gladstone, she has declared herself; but the temple she criticizes is one that has previously been examined by historians Allan Meltzer (A History of the Federal Reserve) and Martin Mayer (The Fed), among others.

We may not agree with all that Danielle writes. But we suspect she and her Liscio colleagues will hold nothing back in expressing their opinions.

I have permission to give my two friends a boost. The link is above.

Have fun. More will be revealed.

David R. Kotok, Chairman and Chief Investment Officer