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Hoover Institution senior fellow John Taylor on running for Treasury Secretary and running the fed and the economy.
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And we're back with John Taylor senior fellow at the Hoover institution and maybe just maybe mr.
Taylor you -- Treasury Secretary would you want that job.
In a settlement speculation I really like what I'm doing here at Stanford.
-- society teach and students get now and talk and if not treasuries carry on would you want to run the Fed.
Same the same thing you know like what I'm doing and and intellect your questions about what the Fed should do but let's keep the -- -- that at this point a lot of speculation on the.
There certainly is John I would be allowed to get away with that afternoon that that we didn't -- of the Federal Reserve.
Thing has not -- -- job.
Congress.
Our elected officials you can lump -- the president if you well.
In terms of managing our finances or the Federal Reserve which is essentially helped those very people.
Spend borrowed money by keeping interest rates so loud so what any -- you get to -- Yeah I think it's kind of reinforced each other if you look at fiscal policy the administration.
Starting in 2009 you know these the temporary stimulus package cash for clunkers first time homebuyers temporary cut -- payroll tax was short extension of -- overall tax and that's caused a huge amount of uncertainty and you think about monetary policy it's you know temporary.
Quantitative easing ends its comeback has gone out of snowing again so all that together to me is a lot of short term -- -- feel like and I think that.
Has not been helpful an end to it you know further answer your questions kind of reinforced.
Both sides so that's why I think it's so important to get back to a credible longer term strategy tax reform deficit reduction.
And a more predictable Federal Reserve.
With the Federal Reserve though is Ben Bernanke to blame for that do you think that.
Up myriad other people if they've been running the Central Bank would've done the same thing.
But elect.
Cast blame it seems to me that if you look at history.
You see in the 1980s in the ninety's there was always pressure to do a lot of things the economy was really really bad in the early 1980s.
And the Fed moved away from the very.
Activists set of policies in the seven days to a more.
Predictable.
Understandable policy and the same pressure exists all the time and policy to do things intervene.
-- take specific actions but I think we history shows what works better -- that policy in the eighty's and ninety's.
Really did wonders compared to the seventies and compared to where we are now.
Do you think lawmakers -- will move -- act swiftly to.
Right our -- our financial situation you've got to deal with the expiring tax cuts and and ended spending cuts.
That are lending but then broadly speaking.
Trying to reduce our national debt do you think that they will definitively act even if the Federal Reserve does not change his policy for at least another year and a half.
Well I think there's a lot of interest and in doing that I think that quite frankly the program that.
Governor Romney's put forward to gradually reduce spending and of predictable way credible way is is a start that's a good budget good way to begin.
And then also to get started on the tax you for -- things like to actually -- gonna take awhile is no question about it see you gotta deal with the cliff.
In the short run but you can't just kick the can down a road once again.
You gotta keep make sure the you're doing something constructive and I think there's there's a lot of people -- doing that so I I am optimistic about a right now.
So we're not are we Japan though are we past the point of no return are we going to be in this very.
Slow growth kind of -- Uncomfortable place with low interest rates but no growth for years to come.
To.
We don't need to be very hopeful that we'll get out of this fund committed data came in this morning again just slow growth slow growth 2%.
You housing picks up but not risen though residential investment goes down we've got to get out of this but I think a change in policy.
Will make all the difference and that's why -- -- a got to change of policy can't be complacent.
But there's a real opportunity here to get back to the condor recovery.
We've had in the past the kind of growth we had in the eighties and I think as people see that they've been.
Make sure it happens of course the election's going to be part of what determines how that all turns -- Certainly well John good to see.
Thank you so much hope they see in person next time but you know what I would leave northern California the -- -- -- the -- -- with John Taylor from Stanford University take -- John.
