Alan Blinder | |
|---|---|
 | |
| 15thVice Chairman of the Federal Reserve | |
| In office June 27, 1994 – January 31, 1996 | |
| President | Bill Clinton |
| Preceded by | David W. Mullins Jr. |
| Succeeded by | Alice Rivlin |
| Member of theFederal Reserve Board of Governors | |
| In office June 27, 1994 – January 31, 1996 | |
| President | Bill Clinton |
| Preceded by | David W. Mullins Jr. |
| Succeeded by | Alice Rivlin |
| Personal details | |
| Born | (1945-10-14)October 14, 1945 (age 79) New York City, U.S. |
| Education | Princeton University (BA) London School of Economics (MS) Massachusetts Institute of Technology (PhD) |
| Academic career | |
| Field | Macroeconomics |
| School or tradition | New Keynesian economics |
| Doctoral advisor | Robert Solow |
| Doctoral students | Julio Rotemberg |
| Information atIDEAS / RePEc | |
Alan Stuart Blinder (/ˈblaɪndər/, born October 14, 1945) is an American economics professor atPrinceton University and is listed among the most influential economists in the world.[1] He is a leadingmacroeconomist, politicallyliberal, and a champion ofKeynesian economics and policies.[2]
Blinder served on PresidentBill Clinton'sCouncil of Economic Advisers from January 1993 to June 1994[3] and as thevice chairman of the Federal Reserve from June 1994 to January 1996.[4]
His academic work has focused particularly onmonetary policy andcentral banking,[5] and on the "offshoring" of jobs. His writing has been published inThe New York Times,The Washington Post, as well as a monthly column inThe Wall Street Journal.
Regarding the2008 near-meltdown of major financial institutions, Blinder drew ten lessons for fellow economists, including “Excessive complexity is not just anti-competitive, it's dangerous” and “Illiquidity closely resembles insolvency.”[6]
Blinder was born to aJewish family[7] inBrooklyn,New York. He graduated fromSyosset High School inSyosset, New York. Blinder attended Princeton University as an undergraduate student and graduated summa cum laude with a B.A. in economics in 1967. He completed a 130-page long senior thesis, titled "The Theory of Corporate Choice".[8] He received an MSc in economics from theLondon School of Economics in 1968[4] and received a doctorate in economics from theMassachusetts Institute of Technology in 1971.[4] He was advised byRobert Solow.[9]
Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton where he has been since 1971; from 1988 to 1990, he chaired the economics department.[4] Also in 1990, he founded Princeton's Griswold Center for Economic Policy Studies. And he has served as vice-chair of The Observatory Group.[citation needed]
Since 1978, Blinder has been a Research Associate of theNational Bureau of Economic Research.[10] He is a past president of theEastern Economic Association and Vice President of theAmerican Economic Association and was named a Distinguished Fellow of the latter in 2011.[4] He is a Fellow of theAmerican Academy of Arts and Sciences (since 1991), a member of theAmerican Philosophical Society since 1996,[11] and a member of the board of theCouncil on Foreign Relations (since 2008).[12] Blinder's textbookEconomics: Principles and Policy, co-written withWilliam Baumol, was first published in 1979 and, in 2012 was printed in its twelfth edition.[13]
In 2009 Blinder was inducted into theAmerican Academy of Political and Social Science, "for his distinguished scholarship on fiscal policy, monetary policy and the distribution of income, and for consistently bringing that knowledge to bear on the public arena."[14] He is a strong proponent offree trade.[15][non-primary source needed] Blinder has been critical of the public discussion of the US national debt, describing it as generally ranging from "ludicrous to horrific".[16]
Blinder is listed among the most influential economists in the world according toIDEAS/RePEc.[1]
In 1975, Blinder served as the Deputy Assistant Director of theCongressional Budget Office.
In the 1990s, he served on PresidentBill Clinton'sCouncil of Economic Advisers from January 1993 to June 1994,[3][4] and as the 15thVice Chair of the Federal Reserve from June 27, 1994, to January 31, 1996 (more specifically as the Vice Chairman ofBoard of Governors of the Federal Reserve System).[4]
As Vice Chairman, Blinder cautioned against raising interest rates too quickly to slow inflation because of the lags in earlier rises feeding through into the economy. He also warned against ignoring the short term costs in terms of unemployment that inflation-fighting could cause.[17]
Many have argued that Blinder's stint at the Fed was cut short because of his tendency to challenge chairmanAlan Greenspan. By challenging assumptions, Blinder supposedly disrupted "the whole pipeline of Greenspan-arriving-at-decisions."[18]
He was an adviser toAl Gore andJohn Kerry during their respective presidential campaigns in2000 and2004.[4]
Blinder was a co-founder and a vice-chair of thePromontory Interfinancial Network, LLC.[citation needed]
After his service as the vice chairman of the Federal Reserve, Blinder, along with several former regulators, founded a company that offers a number of services that provide a means for depositors (including governmental entities, nonprofits, businesses, as well as individuals such as retirees) to access millions in Federal Deposit Insurance Corporation (FDIC) coverage at a single institution instead of multiple ones.[citation needed] This provides banks that are members the ability to offer coverage above the FDIC per account/per bank limit by letting those banks place funds into CDs or deposit accounts issued by other network banks. This occurs in increments below the standard FDIC insurance maximum ($250,000) so that both principal and interest are eligible for FDIC insurance.[19] The company acts as a sort of clearinghouse, matching deposits from one institution with another.[19] Through its services it allows access to higher levels of FDIC insurance although limits apply.[20]
Blinder was an early advocate of a "Cash for Clunkers" program, in which the government buys some of the oldest, most-polluting vehicles andscraps them. In July 2008, he wrote an article inThe New York Times advocating such a program,[21] which was implemented by theObama administration during the summer of 2009.[22] Blinder asserted it could stimulate the economy, benefit the environment, and reduce income inequality.[21] The program was praised by President Obama for "exceeding expectations",[23] but criticized for economic and environmental reasons.[24][25][26][27]
TheGreat Recession started in December 2007 and bottomed-out in June 2009, at which point the U.S. economy began a slow recovery.[28] Blinder points out that payroll employment didn't regain its previous level until almost five additional years.[6][non-primary source needed][29]
Blinder argues for 10 lessons for fellow economists,[6] including —
4)“Self-regulation is oxymoronic.”
5)“Fraud and near-fraud can rise to attain macroeconomic significance.”
6)“Excessive complexity is not just anti-competitive, it's dangerous.”
Regarding the teaching of college-level economics, Blinder writes, “If you are not teaching your students that ‘Keynesianism’ is neither conservative nor liberal, you should be.”[30]
Economic models with one interest rate —“the” interest rate — are no longer good enough. He writes, “After all, in the 2000s we saw several dramatic instances of risk spreads first narrowing dangerously, then skyrocketing once fear took over from greed, and then narrowing again as calm returned.”[31]
For a beginning class in economics, he recommends including QE, or Quantitative Easing, as practiced by the Fed, the fact that investment bubbles can and do occur, and that “leverage is a double-edged sword.”[32]
Regarding other concepts such as “Too Big To Fail,” Blinder recommends including them in advanced courses but not in introductory classes. He thinks the early class(es) should include material which economists largely agree on, the “received wisdom” as it were, although he sees how other teachers might come to different conclusions.[33]
In a 2019 article entitled “The Free-Trade Paradox: The Bad Politics of a Good Idea,” Blinder states that the main focus of the economics profession has been using price signals to produce goods and services as cheaply as possible. Jobs are viewed as secondary, and often as a distinct negative which people put up with only to get the money for their own consumption.[34]
But then he asks, “What if people care as much (or more) about their role as producers — about their jobs — as they do about the goods and services they consume? That would mean economists have been barking up the wrong tree for more than two centuries.”[34]
He still thinks there's an excellent case to be made for free trade, just not the case which economists typically make.[34]
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| Government offices | ||
|---|---|---|
| Preceded by | Member of theFederal Reserve Board of Governors 1994–1996 | Succeeded by |
| Vice Chair of the Federal Reserve 1994–1996 | ||
