Kevin Warsh, a pro-growth advocate at the Fed
Great, great stuff from Fed member Kevin Warsh in the WSJ. After giving his perfunctory agreement with QEII, he gets after it with a rousing piece of advocacy:
Pro-growth policies include reform of the tax code to make it simpler, more transparent and more conducive to long-term investment. These policies also include real regulatory reform so that firms—financial and otherwise—know the rules, and then succeed or fail. Regulators should be hostile to rent-seeking by the established, and hospitable to the companies whose names we do not know. Finally, the creep of trade protectionism is anathema to pro-growth policies. The U.S. should signal to the world that it is ready to resume leadership on trade.
The deleveraging by our households and businesses is not a pattern to be arrested, but good prudence to be celebrated. Larger, more liquid corporate balance sheets and higher personal saving rates are the reasonable and right responses to massive government dissaving and unpredictable government policies. The steep correction in housing markets, while painful, lays the foundation for recovery, far better than the countless programs that have sought to subsidize and temporize the inevitable repricing. It is these transitions in our market economy—and the adoption of pro-growth fiscal, regulatory and trade policies—that lay the essential groundwork for greater, more sustainable prosperity.
Me: I would say there is as much as a 39 percent chance Kevin Warsh is the next Treasury Secretary of the United States. First, I think Tim Geithner is staying for Obama’s full term. Second, betting markets currently give 39 percent chance Republicans take the White House in 2012. Warsh is highly respected in GOP policymaking circles and has a gold-plated resume. I could see Warsh at Treasury and eventually Glenn Hubbard/John Taylor at the Fed in a GOP administration.