Evening Must-Read: Binyamin Applebaum: Richard Fisher, Often Wrong but Seldom Boring, Leaves the Fed

By far the most extraordinary and astonishing thing about ex-Dallas Federal Reserve Bank President Richard Fisher: in spite of being wrong ex post for eight straight years in a row on pretty much everything to do with the appropriate direction of and the risks to Federal Reserve policy, he not only never changed his mind, he never lost his dead-certain iron confidence that he was right:

Evening Must-Read: Binyamin Applebaum: Richard Fisher, Often Wrong but Seldom Boring, Leaves the Fed: “[Richard Fisher] was also among the last to understand the depth of the resulting financial crisis…

He warned throughout most of 2008 that inflation was the primary danger to the economy — a threat that has still not materialized — and that the bleak pronouncements of other Fed officials were fueling an unwarranted sense of panic. In August, as the financial system teetered on the brink of collapse, he voted to raise interest rates, which would have made the situation even worse. In December that year, when the Fed reduced its benchmark interest rate nearly to zero in a move to spur a recovery, Mr. Fisher cast the only dissenting vote. After the meeting, he decided the moment required solidarity and went to Ben S. Bernanke, the chairman, to change his vote.

But Mr. Fisher said in the interview here that he had not changed his mind. He said the Fed should never have pushed interest rates below 2 percent, nor bought so many bonds…. He says he simply does not believe the Fed is helping. He says holding down interest rates has mostly enriched the rich, like his own family. The middle class is being squeezed, he said, “but the Fed can’t fix that.”… The Fed’s portfolio, which has swelled to more than $4 trillion, is “an enormous amount of explosive fuel” and the danger is “an explosion of inflation.”

“My successors,” he said, “are going to have to be very careful in steering that ship.”