Alan Stuart Blinder (1st syllable rhymes with "blind") (born October 14, 1945) is an American economist. He serves at Princeton University as the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs in the Economics Department and as vice-chairman of The Observatory Group. He founded Princeton's Griswold Center for Economic Policy Studies in 1990. Since 1978 he has been a Research Associate of the National Bureau of Economic Research. He is also a co-founder and a vice chairman of the Promontory Interfinancial Network, LLC.
Alan S. Blinder during his term as Vice Chairman of the Federal Reserve, 1994-1996ref name="What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?, Nov. 2014"
|15th Vice Chair of the Federal Reserve System|
June 27, 1994 – January 31, 1996
|Appointed by||Bill Clinton|
|Preceded by||David Mullins|
|Succeeded by||Alice Rivlin|
|Born||October 14, 1945|
New York City, New York, U.S.
|Alma mater||Princeton University|
London School of Economics
Massachusetts Institute of Technology
|New Keynesian economics|
|Information at IDEAS / RePEc|
He served on President Bill Clinton's Council of Economic Advisers (July 27, 1993 – June 26, 1994), and as the Vice Chairman of the Board of Governors of the Federal Reserve System from June 27, 1994, to January 31, 1996. Blinder's recent academic work has focused particularly on monetary policy and central banking, as well as the "offshoring" of jobs, and his writing for lay audiences has been published primarily but not exclusively in The New York Times, The Washington Post and Wall Street Journal, where he now writes a regular monthly op-ed column.
Regarding the 2008 near-meltdown of major financial institutions, Blinder drew ten lessons for fellow economists including: "It can happen here," "Fraud and near-fraud can rise to attain macroeconomic significance," "Excessive complexity is not just anti-competitive, it's dangerous," and "Go-for-broke incentives will induce traders to go for broke."
Blinder was born to a Jewish family in Brooklyn, New York. He graduated from Syosset High School in Syosset, New York. Blinder received his undergraduate degree in economics from Princeton, graduating summa cum laude in 1967. He subsequently gained an MSc in economics from the London School of Economics (1968) and then received his doctorate in economics from the Massachusetts Institute of Technology in 1971. He was advised by Robert Solow.
Blinder has been at Princeton since 1971, chairing the economics department from 1988 to 1990. He is a past president of the Eastern Economic Association and Vice President of the American Economic Association and was named a Distinguished Fellow of the latter in 2011. He is a Fellow of the American Academy of Arts and Sciences (since 1991), a member of the American Philosophical Society since 1996, and a member of the board of the Council on Foreign Relations (since 2008). Blinder's textbook Economics: Principles and Policy, co-written with William Baumol, was first published in 1979 and, in 2012 was printed in its twelfth edition.
In 2009 Blinder was inducted into the American 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." He is a strong proponent of free trade. Blinder has been critical of the public discussion of the US national debt, describing it as generally ranging from "ludicrous to horrific".
Blinder has served as the Deputy Assistant Director of the Congressional Budget Office (1975), on President Bill Clinton's Council of Economic Advisers (January 1993 - June 1994), and as the Vice Chairman of the Board of Governors of the Federal Reserve System from June 1994 to January 1996. As Vice Chairman, he 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.
Many have argued that Blinder's stint at the Fed was cut short because of his tendency to challenge chairman Alan Greenspan:
[Economist] Rob Johnson, who watched the Blinder ordeal, says Blinder made the mistake of behaving as if the Fed was a place where competing ideas and assumptions were debated. "Sociologically, what was happening was the Fed staff was really afraid of Blinder. At some level, as an applied empirical economist, Alan Blinder is really brilliant," says Johnson.
In closed-door meetings, Blinder did what so few do: challenged assumptions. The Fed staff would come out and their ritual is: Greenspan has kind of told them what to conclude and they produce studies in which they conclude this. And Blinder treated it more like an open academic debate when he first got there and he'd come out and say, 'Well, that's not true. If you change this assumption and change this assumption and use this kind of assumption you get a completely different result.' And it just created a stir inside – it was sort of like the whole pipeline of Greenspan-arriving-at-decisions was disrupted.
This put him in conflict with Greenspan and his staff. "A lot of senior staff ... were pissed off about Blinder – how should we say? – not playing by the customs that they were accustomed to," Johnson says.
"Cash for Clunkers"Edit
Blinder was an early advocate of a "Cash for Clunkers" program, in which the government buys some of the oldest, most-polluting vehicles and scraps them. In July 2008, he wrote an article in The New York Times advocating such a program, which was implemented by the Obama administration during the summer of 2009. Blinder asserted it could stimulate the economy, benefit the environment, and reduce income inequality. The program was praised by President Obama for "exceeding expectations," but criticized for economic and environmental reasons.
In the period 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. 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. The company acts as a sort of clearinghouse, matching deposits from one institution with another. Through its services it allows access to higher levels of FDIC insurance although limits apply.
Views regarding 2008 near-meltdown of major financial institutionsEdit
Blinder draws 10 lessons for fellow economists in a 2014 article entitled "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?"
1) It can happen here. Most emphatically.
2) Minsky was basically right.
Hyman Minsky (1919–1996) said financial bubbles can and certainly do exist. In his view, cycles of boom and bust are the central concepts. In fact, excesses sometimes become more severe as a bubble progresses, with people seemingly forgetting the past and believing that, "This time is different." And when the crash inevitably occurs, people swing abruptly in the opposite direction, become overly pessimistic, and belatedly shun even reasonable risk. As Blinder summarized Minsky's views, "The financial system is a zoo that needs zookeepers, lest the wilder animals escape and wreak havoc upon the rest of us."
3) Reinhart-Rogoff recessions are worse than Keynesian recessions.
A Reinhart-Rogoff recession is one in which parts of the financial system have been destroyed, which the recovery from takes considerably longer than from a relatively normal recession which responds to the standard Keynesian tools of tax cuts and infrastructure spending. [The other side of the counter-cyclical Keynesian approach is, during economic good times, for governments to run deficits which are smaller percentages of GDP or even slight surpluses.]
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.
7) Go-for-broke incentives will induce traders to go for broke.
8) Illiquidity closely resembles insolvency.
Blinder asks, Was the situation of Lehman Brothers, which was allowed to fail in September 2008, really so different from the situation of Bear Stearns, which was saved in March 2008?
9) Moral hazard isn't a show-stopper, it's a tradeoff.
10) Economic illiteracy can really hurt.
- (2014), "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?" Princeton University Griswold Center for Economic Policy Studies Working Paper No. 243, 22-page paper, November 2014.
- (2013), After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, New York: Penguin Press, 24 Jan. 2013. ISBN is 978-1594205309.
- (2009), "How Many U.S. Jobs Might Be Offshorable," World Economics, April–June 2009, 10(2): 41–78.
- (2009), "Making Monetary Policy by Committee," International Finance, Summer 2009, 12(2): 171–194.
- (2008), "Do Monetary Policy Committees Need Leaders? A Report on an Experiment," American Economic Review (Papers and Proceedings), May 2008, pp. 224–229.
- (2006), "Offshoring: The Next Industrial Revolution?" Foreign Affairs", March/April 2006, pp. 113–128. (A longer version with footnotes and references is "Fear of Offshoring," CEPS Working Paper No. 119, December 2005).
- (2006), "The Case Against the Case Against Discretionary Fiscal Policy," in R. Kopcke, G. Tootell, and R. Triest (eds.), The Macroeconomics of Fiscal Policy, MIT Press, 2006, forthcoming, pp. 25–61.
- (2004), The Quiet Revolution, Yale University Press
- (2001, with William Baumol and Edward N. Wolff), Downsizing in America: Reality, Causes, And Consequences, Russell Sage Foundation
- (2001, with Janet Yellen), The Fabulous Decade: Macroeconomic Lessons from the 1990s, New York: The Century Foundation Press
- (1998, with E. Canetti, D. Lebow, and J. Rudd), Asking About Prices: A New Approach to Understanding Price Stickiness, Russell Sage Foundation
- (1998), Central Banking in Theory and Practice, MIT Press
- (1991), Growing Together: An Alternative Economic Strategy for the 1990s, Whittle
- (1990, ed.), Paying for Productivity, Brookings
- (1989), Macroeconomics Under Debate, Harvester-Wheatsheaf
- (1989), Inventory Theory and Consumer Behavior, Harvester-Wheatsheaf
- (1987), Hard Heads, Soft Hearts: Tough‑Minded Economics for a Just Society, Addison-Wesley
- (1983), Economic Opinion, Private Pensions and Public Pensions: Theory and Fact. The University of Michigan
- (1979, with William Baumol), Economics: Principles and Policy – textbook
- (1979), Economic Policy and the Great Stagflation. New York: Academic Press
- (co-edited with Philip Friedman, 1977), Natural Resources, Uncertainty and General Equilibrium Systems: Essays in Memory of Rafael Lusky, New York: Academic Press
- (1974), Toward an Economic Theory of Income Distribution, MIT Press
- National Bureau of Economic Research, Alan S. Blinder
- Economist Rankings at IDEAS
- Grim, Ryan (2009-09-07) Priceless: How The Federal Reserve Bought The Economics Profession, Huffington Post
- Alan Blinder, , accessed 17 October 2009
- "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?," Alan Blinder, Nov. 2014. Blinder credits fellow economists Kenneth Rogoff (1953– ) and Carmen Reinhart (1955– ) with describing important features of a worse-than-normal recession in which parts of the financial system are destroyed.
- Encyclopedia of American Jewish History, Volume 1 edited by Stephen Harlan Norwood, Eunice G. Pollack p 721
- Princeton University, Alan S. Blinder, Princeton University
- Towards an economic theory of income distribution.
- NBER, Curriculum Vitae: Alan Stuart Blinder, accessed 14 August 2001
- Alan Blinder, Textbooks
- Princeton University, 24 June 2009, Blinder named fellow of American Academy of Political and Social Science, accessed 14 August 2009
- Blinder, Alan S. (2008). "Free Trade". In David R. Henderson (ed.) (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.CS1 maint: Extra text: editors list (link)
- Mark Weisbrot (10 January 2012). "The economic idiocy of economists". Comment is free. London: guardian.co.uk. Retrieved 31 March 2012.
- The New York Times, 18 March 1995, Opening the Fed's Doors From Inside; Alan Blinder Preaches Communication at Tight-Lipped Central Bank
- Blinder, Alan S. (27 July 2008). "A Modest Proposal: Eco-Friendly Stimulus". The New York Times.
- Why One Economist Pushed Cash For Clunkers, National Public Radio, August 11, 2009.
- More Cash for Clunkers?; Despite the frenzy, another $2 billion may not sell any additional cars., Wall Street Journal, August 3, 2009.
- Derek Thompson, The Senate Should Kill Cash for Clunkers, The Atlantic, August 2009.
- "Cash for Clunkers" Bad for Environment?, CBS News, August 7, 2009.
- Clearing the air; Environmental benefits limited from ‘Clunkers’ deal, The Houston Chronicle, September 5, 2009.
- ,"Stimulus For Clunkers" Wall Street Journal, August 6, 2014.
- https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=45817065 & https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=45817065 & http://www.bbt.com/bbtdotcom/business/banking/cds/cdars.page
- Svaldi, Aldo (18 August 2008). "CDARS, safety in numbers for big bank customers". Denver Post.
- "Antifragile: Things That Gain from Disorder", Chapter "The ethical and legal" By Nissim Taleb & https://www.umpquabank.com/personal-banking/high-value-cds/
- After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, Alan Blinder, Penguin Press, 2013, review by GoodReads.
|Wikiquote has quotations related to: Alan Blinder|
- Blinder's Princeton homepage
- After the Music Stops: The Financial Crisis, the Response, and the Work Ahead at Penguin Publishers
- Promontory Interfinancial Network, LLC
- Alan Blinder on Charlie Rose
- Works by or about Alan Blinder in libraries (WorldCat catalog)
- "Alan Blinder collected news and commentary". The New York Times.
- Statements and Speeches of Alan S. Blinder
- Blinder, Alan S. (2008). "Keynesian Economics". In David R. Henderson (ed.) (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.CS1 maint: Extra text: editors list (link)
| Vice Chair of the Federal Reserve System