The Impossible Dream: Stan Fischer, Fed Chairman

Stanley Fischer is the governor of the Bank of Israel. (Photo: Sasson Tiram) Stanley Fischer is the governor of the Bank of Israel. (Photo: Sasson Tiram) Dylan Matthews, a reporter at The Washington Post, recently wrote an interesting article suggesting that Stan Fischer, who announced last month that he was resigning as governor of the Bank of Israel, might become the next chairman of the Federal Reserve.

Mr. Fischer would indeed be highly qualified (as would Janet Yellen, the vice chairwoman of the Federal Reserve, or Christy Romer, the former chairwoman of President Obama’s Council of Economic Advisers, to name two other obvious candidates). But Mr. Matthews also suggested that Mr. Fischer might have an advantage in the confirmation process because he has been a highly successful governor of the Bank of Israel, and he worked well with Prime Minister Benjamin Netanyahu.

I think this is fantasizing; Mr. Matthews is failing to face up to the deep monetary craziness of the modern Republican Party. You have to bear in mind that the party’s intellectual leaders are people who have spent the past four years expecting hyperinflation any day now. Two years ago they lectured Ben Bernanke, the Fed chairman, on how terrible it is to “debase” currency. And, of course, the utter failure of their predictions hasn’t changed their minds a bit.

So here comes Mr. Fischer, who said in the Washington Post article: “I still think Keynesian economics is extremely important, and if anybody didn’t think so, this crisis should have made them rethink.” This is actually a double insult to the Ryanoids — both praise for Keynes and the suggestion that one should rethink one’s views in the face of experience, which are both anathema to them. And as head of the Bank of Israel, his signature achievement was a large debasement — sorry, depreciation — of the currency, which insulated the nation from the crisis and was achieved through huge purchases of foreign exchange.

This is actually a form of quantitative easing (as well as a bit of currency war); it’s exactly the kind of thing the G.O.P. goes wild about when Mr. Bernanke does it. But doesn’t Mr. Fischer’s success play a role? Hey, that’s evidence-based thinking, which is part of what the Ryanoids are fighting.

I guess my point is that President Obama should appoint someone good — Stan, Janet, Christy, or someone else to be named — and not even try to appease the crazies.