As a governor of the Federal Reserve Board from 1996 to 2002, Laurence H. Meyer helped make the economic policies that steered the United States through some of the wildest and most tumultuous times in its recent history. Now, in A Term at the Fed, Governor Meyer provides an insider's view of the Fed, the decisions that affected both the U.S. and world economies, and the challenges inherent in using monetary policy to guide the economy.
When Governor Meyer was appointed by President Clinton to serve on the Federal Reserve Board of Governors in 1996, the United States was entering one of the most prosperous periods in its history. It was the time of "irrational exuberance" and the fabled New Economy. Soon, however, the economy was tested by the Asian financial crisis, the Russian default and devaluation, the collapse of Long-Term Capital Management, the bursting of America's stock bubble, and the terrorist attacks of 9/11.
In what amounts to a definitive playbook of monetary policy, Meyer now relives the Fed's closed-door debates -- debates that questioned how monetary policy should adapt to the possibility of a New Economy, how the Fed should respond to soaring equity prices, and whether the Fed should broker the controversial private sector bailout of LTCM, among other issues. Meyer deftly weaves these issues with firsthand stories about the personalities involved, from Fed Chairman Alan Greenspan to the various staffers, governors, politicians, and reporters that populate the world of the Fed.
Since the end of his term, Meyer has continued to watch the Fed and the world economy. He believes that we are witnessing a repetition of some of the events of the remarkable 1990s -- including a further acceleration in productivity and perhaps another bull market. History does not repeat itself, yet Meyer shows us how the lessons learned yesterday may help the Fed shape policy today.
Meyer was appointed to the Federal Reserve Board by President Clinton in 1996, and his term coincided with some of the most momentous economic events of the second half of the 20th century--the collapse of the Asian banking system, the implosion of the Russian economy and the birth and death of the so-called New Economy. Meyer was at the center of global financial policy making and witness to the inner workings of arguably the most powerful government agency in the world. Unfortunately, too much jargon and unrelated personal anecdotes clutter the text; Meyer stumbles from blithe personal asides ("I figured that if I didn't faint or throw up on the President, the nomination was mine"). He is strongest at summarizing complex macroeconomic theory and practice. His breezy style helps unlock the mystery of national monetary policy and global finance. A mystery unsolved is that of Fed Chairman Alan Greenspan, who is the central figure of the book. Though in close contact with him for six years, Meyer offers no more insight than one might find in a weekly news magazine. While broadly informative and certainly unique, the book represents an opportunity lost. Copyright (c) Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to the Hardcover edition.
-- PUBLISHERS WEEKLY.
There are no customer reviews available at this time. Would you like to write a review?
January 03, 2006
Number of Print Pages*
Adobe DRM EPUB
* Number of eBook pages may differ. Click here for more information.
Excerpt from A Term at the Fed by Laurence H. Meyer
By the time I had completed my first economics class in college, I knew I wanted to be an economist. One attraction was that a career as an economist appeared to offer such a variety of opportunities and challenges: teaching, research, consulting, and serving in government. In addition, one didn't have to make a single choice within this set: One could pursue several options simultaneously or sequentially. By age fifty, I had already been a teacher, researcher, and consultant. Never for a day have I regretted my career choice.
But I had two unfulfilled dreams. The first was to play second base for the Dodgers. The second was to be chairman of the President's CEA, a position of stature and some influence and an ideal spot for an academic economist seeking an opportunity for public service. For some inexplicable reason, though, the Federal Reserve never made it into my dreams. And that's despite the fact that, in retrospect, it was truly the ideal spot for me.
In any case, in September 1995 I was sitting peacefully at a conference in Washington, D.C., organized by my consulting firm, when my adventure began. My partner handed me a note saying that Laura Tyson, chairman of President Clinton's National Economic Council would like me to call her. My consulting firm had worked with the Clinton administration's economics team, as we had with the Bush and Reagan administrations' teams previously, so such a call, though unusual, didn't suggest anything out of the ordinary.
When I slipped out and returned the call, our conversation seemed innocuous enough. There were some openings on the Federal Reserve Board, and Laura asked me for some suggestions about possible nominees. She also asked if I would like to be considered for the position, but I viewed the latter question as more of a courtesy than serious inquiry. I quickly provided a list of several potential candidates and gave no further thought to the possibility of being nominated.
But this call was indeed the beginning of the process that would result in my nomination and confirmation. Once I was nominated to the Board, incidentally, I was frequently asked, How does someone get to be on the Federal Reserve Board? The technical answer is, You have to be nominated by the President and confirmed by the Senate.
But to me, the question usually sounded more like How did someone like you get to be on the Board? The answer, generically, is really quite simple. It depends on some combination of whom you know, what you have accomplished, what your party affiliation is and what you have contributed in support of your party. The relative importance of these considerations differs depending on the President and on his economics and political teams.
In my case, I knew most of the economics team that would make the decision; I had been a professor of economics at Washington University in St. Louis for twenty-seven years; I was an award-winning economic forecaster; and I was a valued consultant to several administrations, including the current one, as well as to the Board of Governors itself. In addition, I was widely recognized as a Democrat and modestly outspoken in support of Democratic positions on economic policy. My consulting firm had even earned a gold star by doing a much appreciated piece of policy analysis for the Clinton presidential campaign. So I had the credentials.
The next important event toward my nomination was a call from Joseph Stiglitz, chairman of the President's CEA. Joe told me that I would be on the administration's short list for the Fed position, provided I would commit to accepting the nomination if it was offered. Even though Laura Tyson had hinted at this possibility in the earlier call, Joe's call came as a total shock. I was immediately excited about the prospect of serving on the Board -- and thrilled to have been asked.