Wednesday, August 14, 2013

A Phone Call From President Obama

By Bill Bonner

When will these markets get back to business? Probably soon.

But not yet. Yesterday was another meaningless, directionless, pointless day.

Even the financial press seems to be out at the beach. Nothing much of interest has come our way for weeks.

And still no call from the White House! We’ve been sitting by the phone. Every once in a while, we make a “hurrummmp” sound to clear the throat… ready to reply…

“Yes, Mr. President… Bill Bonner here.

“Take the job of running the Fed?

“Well, I don’t know. How much does it pay?

“Is that all? Do I get health insurance too?

“Well, okay, I guess so. But it’s a big change. So I need to check with my wife.”

But all this rehearsal has been in vain. The phone hasn’t rung. The person not calling is none other than Barack Obama. And the job he’s not offering – chairman of the Fed – is the very job that your editor is clearly, decisively, no-questions-about-it, most suited for.

Why us?

Ah, glad you asked.

You see, there are some jobs that require real skill. Don’t ask us to fix your computer or to make you a fine piece of furniture. When it comes to electronics, we’re better off without them. And as for fine woodworking, if we can’t do it with a chainsaw, call someone else.

But central banking? Right up our alley.

It is a profession akin to air-traffic control… or night watchman. If an air-traffic controller does his job, everything goes smoothly. But his scope for artistry and improvement is limited.

He cannot do a better job by improvising novel systems or causing pilots to undertake unorthodox procedures.

He is more like an accountant than a screenwriter. If he does his job well, the accountant adds two plus two and gets four. He cannot do better and get five or six. Four is all he can get.

So too, the air-traffic controller can help make sure people get where they were going safely. If he does his job well, things will turn out as expected. But if he does a “brilliant” job, travelers end up where they didn’t expect to go; he has not really added to the sum of human happiness. Out-of-the-box air traffic controlling will not make the world a better place. It can only make a mess of things.

Likewise, the best a central banker can do is the normal thing. Creative central banking – and experimental central bank policies – should be avoided. They don’t make the world a better place; they only take people where they didn’t want to go.

At best, the central banker is a dull person who does more or less nothing. He doesn’t build anything, invent anything, create anything, manipulate anything, jiggle anything, twist anything, pull anything, push anything, increase anything, decrease anything, adjust anything, fix anything, stimulate anything or even touch anything…

The ideal central banker keeps to his essential mission. Like a night watchman, he does nothing at all. He merely surrenders the premises in the morning exactly as he found them the night before.

Not only does the ideal central banker not do anything; neither does he think anything. The last thing you want in a central banker is the energy and brilliance of a man like Larry Summers who has many thoughts (almost all of them terrible).

The Lost History of Emile Moreau

Instead, you want a central banker who rarely thinks at all. And then, when he does have a thought, it is not about central banking.

That’s why our favorite central banker of all time was a Frenchman. Yes, who can forget Emile Moreau? Apparently, everyone!

Even the people who live in this area of France… scarcely five miles from Emile Moreau’s home… can’t remember the man.

Last night, at dinner, we asked friends.

“Have you ever heard of Emile Moreau?”


“Emile Moreau. Governor of the Bank of France between 1926 and 1930. You passed his house on your way here tonight.”

What was marvelous about Monsieur Moreau was that he was a central banker able to keep things in proper perspective. He attended a central bankers summit in the mid-1920s – along with Benjamin Strong from the Fed and Montagu Norman of the Bank of England.

On the agenda were the most pressing and important issues of the day – how to save the British economy… and how to settle the reparations issue and avoid another world war.

But what was on Moreau’s mind was something much more important: hunting season. When the season opened in this part of France, at the end of August, Moreau promptly left the conference and took up his shotgun.

We hope to be able to follow Moreau’s great example and to live up to the standards he set for himself and his profession.

Of course, some will argue that we lack the experience necessary to do the job.

True, we have no experience as a banker. In fact, we haven’t written a check in at least 35 years. Nor have we stepped foot into a bank in at least 25 years – except for a brief visit to the Waterford branch of the Bank of Ireland. (The poor bank has no money. We felt sorry for the clerks; we thought we might cheer them up.)

But there are some things that are best done without training or experience. When you get married to a young woman, for example, you don’t want her to be too skilled in the art of lovemaking. You’ll wonder where she got the training!

Likewise, you’re better off with a virgin central banker. Preferably one headed to a convent!

No kidding. When it comes to debauching a currency, once is already too often. Better to get a central banker who claims he has never done it before… and who pledges never, ever to do it again.

Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.
The above article originally appeared at

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