The Robert Heinlein Wars, Part MDCCLXIV: Hoisted from 2006

Must-Read: It is very hard to read the subtext of what Tyler Cowen is saying here about the Fed Chair.

If I had to guess, it would be that he is saying:

  1. The first key requirement of a Fed Chair is that he or she not have already angered Trump. Gary Cohn has angered Trump. So he is out.
  2. There are a bunch of remaining candidates on the Republican side: Taylor, Warsh, Powell, and Kashkari.
  3. The second key requirement for a Fed Chair is that he or she be a calm, sane, consensus builder.
  4. John Taylor has, over the past decade, alienated his academic colleagues to a remarkable degree in his pursuit of Republican street-red. That disqualifies him.
  5. Kevin Warsh was, while at the Fed, a strident and wrong anti-Bernanke voice. That disqualifies him.
  6. Powell and Kashkari have taken reasonable positions and made strong and reasonable arguments for them—and would be good Fed chairs.
  7. But when you "compare... [their] leadership virtues to Yellen['s]..." she comes out ahead.

That, at least, is what I think he is trying to say:

Tyler Cowen: The Fed Needs a Savvy Politician as Its Chair: "The next time major economic volatility comes around, Fed decisions will be scrutinized and politicized like never before...

...[by] the mainstream media... social media... perhaps by our very own president.... The key factor for any Fed leader will be the ability to maintain and project a coherent, unified voice at the Fed, so that the Fed remains an island of relative sanity in the polarized nation....

National Economic Council Director Gary Cohn was a former front-runner, and may still be in the running, but his recent public squabbles with Trump disqualify him by the above standards. Candidates on the Republican side include former Fed board governor Kevin Warsh, current governor Jay Powell, Stanford University economist John Taylor and current Minneapolis Fed president Neel Kashkari, all with notable talents. I would prefer the one who, in the interviewing process, comes off as the most low-key, most able to build consensus, best with the news media, and perhaps has done the least to publicly lobby for the post.

Then compare that candidate’s leadership virtues to Yellen.

This time around, it’s all about the politics.