Tuesday, March 1, 2011

New SF Fed Bank President has been Named (A Proponent of Voodoo Economic Equations)

Dr. John C. Williams has been appointed president and chief executive officer of the Federal Reserve Bank of San Francisco, according to an announcement by Douglas W. Shorenstein, chairman of the San Francisco bank’s board of directors. Williams, whose appointment is effective today, has been executive vice president and director of research at the San Francisco Federal Reserve Bank since 2009.

He succeeds Janet L. Yellen, who resigned on October 4, 2010, when she was sworn in as vice chair of the Federal Reserve Board of Governors in Washington, D.C.

Williams, 48, appears to have been captured at birth by the apologists for the ruling elite and has never left their rarefied location on the planet. He earned a Ph.D. in economics from Stanford University in 1994, an MSc. in economics with distinction from the London School of Economics in 1989, and an A.B. with high distinction in economics from the University of California at Berkeley in 1984.

He joined the Board of Governors in 1994 as an economist and served as a senior economist from 1998 to 2002. During that time he also served as a senior economist at the White House Council of Economic Advisers from 1999-2000. Williams moved to the Federal Reserve Bank of San Francisco in 2002 as a research advisor. He was named senior vice president and advisor in 2004, and was promoted to executive vice president and research director in 2009.

He has focused most of his research on monetary policy and has co-authored a number of papers with John B. Taylor, creator of the insane Taylor Rule, which suggests the Fed can control inflation and economic growth by following a simple equation that contains estimates for inflation, and GDP growth.

If nutty equations like this actually worked, Long Term Capital Management would have never blown up and the sub-prime market would have never blown up. Bottom line, there are no constants in the world of economics, such as exist in the world of  the physical sciences (like water always freezing at 32 degrees). Without constants, you can't have these type equations. What characters like Williams and Taylor do is simply assume the least volatile variable is a constant, when the variable starts to "dance" the equation blows up. The only thing Williams and Taylor have been able to do as far as progress is to advance acceptance of these nutty equations so that they are not just used at confused individual private firms but by central banks, so that we can look forward to economic and financial explosions of greater size and destructive force.

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