An Open Letter to Ben Bernanke
To: Chairman Ben Bernanke
Federal Reserve
Washington, DC
Dear Mr. Chairman:
We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.
We subscribe to your statement in The Washington Post on November 4 that "the Federal Reserve cannot solve all the economy's problems on its own." In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.
We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.
The Fed's purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.
Respectfully,
Cliff Asness
AQR Capital
Michael J. Boskin
Hoover Institution, Stanford University
Former Chairman, President’s Council of Economic Advisors
Richard X. Bove
Rochdale Securities
Charles W. Calomiris
Columbia University Graduate School of Business
Jim Chanos
Kynikos Associates
John F. Cogan
Hoover Institution, Stanford University
Former Associate Director, U.S. Office of Management and Budget
Niall Ferguson
Harvard University
Author, The Ascent of Money: A Financial History of the World
Nicole Gelinas
Manhattan Institute & e21
Author, After the Fall: Saving Capitalism from Wall Street—and Washington
James Grant
Grant's Interest Rate Observer
Kevin A. Hassett
American Enterprise Institute
Former Senior Economist, Board of Governors of the Federal Reserve
Roger Hertog
Hertog Foundation
Gregory Hess
Claremont McKenna College
Douglas Holtz-Eakin
Former Director, Congressional Budget Office
Seth Klarman
Baupost Group
William Kristol
Editor, The Weekly Standard
David Malpass
GrowPac, Encima Global
Former Deputy Assistant Treasury Secretary
Ronald I. McKinnon
Stanford University
Joshua Rosner
Graham Fisher & Co., Inc.
Dan Senor
Council on Foreign Relations
Co-Author, Start-Up Nation: The Story of Israel's Economic Miracle
Amity Shlaes
Council on Foreign Relations
Author, The Forgotten Man: A New History of the Great Depression
Paul E. Singer
Elliott Management Corporation
John B. Taylor
Hoover Institution, Stanford University
Former Undersecretary of Treasury for International Affairs
Peter J. Wallison
American Enterprise Institute
Former Treasury and White House Counsel
Geoffrey Wood
Cass Business School at City University London
(Institutional Affiliations are for Information Only)
See the letter as printed in the Wall Street Journal (PDF)