Tags: Fed | Fisher | Congress | job

Fed’s Fisher: Congress, Not the Fed, Must Spur Job Growth

Wednesday, 15 Feb 2012 09:47 AM

Federal Reserve Bank of Dallas President Richard Fisher said more Fed easing might backfire and that Congress and the Obama administration should streamline tax and regulatory policies to spur long-term job growth.

“No amount of monetary accommodation will change the pathology” businesses face, Fisher said Wednesday in a speech in San Marco, Texas.

“Excessive monetary accommodation might only add a further dosage of angst, fueling fears of future inflation.”
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The Fed on Jan. 25 said it would keep rates near zero at least through late 2014, extending a previous date of mid-2013 or later.

The Dallas Fed president, who doesn’t vote on policy this year, has been among the most vocal internal Fed critics, dissenting last year twice against moves to push down long-term rates and to keep the benchmark U.S. interest rate near zero until at least mid-2013. He voted five times in 2008 in favor of tighter policy.

“The greatest impediments to investing in and creating jobs in the U.S. are the current tax code and regulatory burden and uncertainty, as well as lagging workforce skills,” Fisher said in the text of a speech to the Texas Manufacturers Summit 2012. Fisher cited a recent Harvard Business School survey of businesses that “more than 70 percent of respondents expect U.S. competitiveness to decline” over the next few years.

“No one ― business operator, worker or consumer ― can plan for the long term with confidence until the federal government removes the angst that is associated with run-away deficits and unfunded liabilities that threaten to drown our economy in debt,” Fisher said.

Buying More Bonds

Fed Chairman Ben S. Bernanke said in a press conference after the Jan. 25 Federal Open Market Committee meeting that the Fed is keeping the option open of buying more bonds. The Fed pushed down the rate close to zero in December 2008 and has engaged in two rounds of asset purchases totaling $2.3 trillion to boost the economy and reduce the jobless rate of more than 8 percent.

In his brief description of the U.S. economy, Fisher said, “the national unemployment rate is beginning to ebb. But too many Americans remain out of work and for too long.”

Fisher devoted most of his speech to describing Texas’s economy. He said Texas has been one of three states to reach peak employment again following the past recession in part because of tax and regulatory policies that favor job creation. A restaurant operator may spend as much as two years to get a permit for expansion in California that takes six weeks in Texas, Fisher said.

‘Power States’

“If you examine the differences among New York and California and Texas, you will note that these former power states have less flexible labor rules,” Fisher said.

The Dallas Fed and other regional banks Jan. 31 released unprecedented details about their personal wealth. Fisher’s disclosure listed holdings exceeding $20 million, including millions of dollars in municipal bonds and 7,113 acres of land in states including Iowa, Missouri and Texas.

Fisher, 62, has been president of the Dallas Fed since 2005. His district includes Texas, northern Louisiana and southern New Mexico.

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