Richard Fisher is the President of the Dallas Fed and I would like to have overheard his personal reactions to Ponzi Perry's physical threat against the mild mannered Fed Chairman, Ben Bernanke. It seems that Ponzi and the Tea Party just love to beat up on the Fed, particularly, QE2. Actually, Richard Fisher doesn't care much for QE2. And as a Dissenter at the the Fed's FOMC meeting in August, Richard Fisher has become an instant hero of tea baggers who have positioned him as a rough riding adversary of Uncle Ben and the librul FOMC.

I have been interested in Fisher 's remarks over the last two years because he seems to make sense about what I had referred to as Bernanke's leaky pipes. IMO, the problem with QE2 and monetary policy in general is that the water moves in large diameter pipes to large banks which hoard it and the water never flows through the small pipes leading to the community banks and small businesses who are having the credit drought.  (shameless references to my previous blogs).

With regard to what Fisher dissented from in the August FOMC meeting, it was the published statement that interest rates would be kept low well into 2013. Fisher felt that the "benefit of stating that the FOMC  anticipates economic conditions were likely to warrant holding the base rate at 'exceptionally low levels...at least through 2013' " was outweighed by the possibility that small businesses would have an incentive to delay borrowing for expansion. He stated that small businesses were already likely to delay borrowing for expansion--partly because of the rancor of the debt ceiling debate in the weeks preceding the FOMC's meeting.

Far from being a pretty-ugly-tea-bagging dissenter, Fisher's views are collegial, perceptive, and because he mostly agrees with me, very much right on. He gave a speech yesterday at the NABE conference in Dallas. The speech,"Of Moose and Men", can be found on the Dallas Fed website.

Compared to my plumbing metaphors, Fisher uses automobiles. He states that the Fed can provide the gas but small banks and small businesses must step on the pedal and engage the transmission. And in the economists' mantra du jour(it's up to policy makers), including folks like the crew at PIMCO, Fisher goes right back to the policy makers in Washington. It's policy makers who are in the driver's seat, the central bankers are the kids in the back seat who are asking, "when are we going to get there?" Investment needs to have incentives, companies need to invest and hire in order to prime the pump of aggregate demand. Fisher likes the fact that after Obama's speech, they are fighting to find the balance between short term "goosing" of the economy and long term deficit reduction. Fisher is anything but the tea baggers' dream of a Bernanke saboteur.

As for Ponzi Perry's grand plan to ride the Texas "jobs miracle", Fisher points out that Texas has had a 40 year record of a 1% positive gap in job growth over and above the national average, which is exactly where it is now. He also mentioned that Texas is "blessed with an abundance of natural resources."

And in the most telling graph I have seen anywhere, Fisher explains why the economy is doing so badly. He states that the bad economy in the U.S. was caused by a banking crisis. Then the graph shows that the economic aftermath in the U.S. is exactly that of every other country which has had a banking crisis.

Tea Baggers: Where is thy Dissenter sting now, if not the upscale renaissance Texas banker from the Dallas Fed?