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April 16, 2015 at 10:23 AM
Dear Ben,
If I might be so bold as to assume we can be on a first-name basis, let me be among of the first to say, congrats on the new gig!
You have been quite the busy ex-Fed chairman, what with the new job and office at Brookings and a red-hot new eponymous blog. Today we learned you entered into a consulting deal with Citadel, Kenneth Griffin’s $25 billion hedge fund. I feel safe in assuming that as a sharp student of economic theory you made sure to let market forces dictate your compensation. There’s only a limited supply of ex-Fed chiefs and the demand is huge.
Kudos!
After eight years of thankless duty as head of the world’s most important central bank, no one will begrudge your efforts to monetize the insights and experience you gained there. I am sure your attorneys vetted this arrangement, and there are no obvious conflicts of interest. But be aware that this has the appearance of the usual Washington-Wall St. revolving door; some critics may not be mollified by the fact that the Fed was never Citadel’s regulator.
Nevertheless, all of this activity is starting to look a bit frenetic. Allow me to share some unsolicited advice:
Pace yourself!
You are going to burn out if you’re not careful. As your Fed predecessors Paul Volcker and Alan Greenspan have shown, you are likely to have a long post-chairmanship ahead of you. You don’t want to risk an early burnout from taking on too much too soon. It’s a real possibility, not something to be shrugged off.
The good news is that Griffin by most accounts is a good boss; people seem to really like working at Citadel. The bad news is you are running at a very fast pace, with long-form blog posts and epic, wonky battles with the brilliant Larry Summers (all processing power, suspect judgment). Trolling the guy who helped cause the financial crisis, angled to replace you at the Fed, then spent years criticizing how you ran things was pure genius. I have been a dedicated observer of the Fed’s response to the financial crisis (that’s my job) and always tried to look objectively at whether the actions were justified by economic conditions. However, lots of others were angry to the point of irrationality. Sure, the blog and the forthcoming book are a great opportunity to rebut to your critics. As Fed chairman, you were somewhat constrained from responding directly. But as a former Fed chief, you are free to fire away.
But be smart about picking your battles. Summers, just to cite one name of many, will not go away quietly. And remember the rules of asymmetrical warfare. Those who appear weak usually are. Most of the time, adversaries in this camp can be ignored. The trick is to know when to deliver a counterthrust.
