Was Peter Klein Correct That There Were Better Establishment Candidates to Put on the Fed Than Stanley Fischer?

A little over a week ago, economist Peter Klein made the case that there were better candidates that President Obama could have nominated for a position on the Federal Reserve Board of Governors than Stanley Fischer.

Klein argued that Fischer's " monetary policy views are largely indistinguishable from those of Ben Bernanke and Janet Yellen. He strongly favors the current Fed policy of keeping short-term interest rates near zero..."

Klein went on:

If the Fed is supposed to provide “scientific,” politically neutral analysis and administration, wouldn’t you expect some diversity on the Board?

Of course, I’m not expecting the Fed to appoint an Austrian economist as Governor. But there are a number of plausible, politically feasible candidates who would have provided balance to Yellen’s somewhat extreme views. John Taylor is the most obvious candidate...

And now, as if on cue, WSJ's Jon Hisenrath is out with an interview with Taylor, where Taylor calls for a major hike in interest rates, something that Yellen, Fischer and company are unlikely to do.:

John Taylor: Interest Rates Should Already Be Higher

We caught up with Stanford University professor John Taylor at a Hoover Institution conference Friday on the Federal Reserve’s 100-year anniversary.

Our main topic of conversation, which is being hotly debated in markets and at the Fed, was where short-term interest rates should be in the years ahead, after the Fed lifts them from zero...

He’s an authority on the subject, having authored a widely followed economic formula known as the Taylor rule, which uses a few basic calculations to explain how much interest rates should change based on deviations in inflation and economic slack. Using his rule, Mr. Taylor says short-term rates should already be above 1%, not pinned near zero.