Thanks for the Memories

Don Kohn has resigned from the Fed. With him goes a lot of memory.

The Obama administration is now going to be busy finding a successor. While most will focus on whether new Fed members will be interest rate hawks or doves, what’s really interesting can’t be so easily labeled.

Dr. Kohn brought an unparalleled sense of history to his job. He joined the Kansas City Fed in 1970, and moved to Washington in 1975. He saw double-digit inflation, market panics, insolvent banks, and financial contagion well before the latest crisis developed. When the sub-prime fiasco hit, he provided the Chairman with valuable insight about how the Fed had dealt with these challenges.

He served tirelessly, sometimes making politically unpopular calls, like maintaining confidentiality about bank transactions. And he knew how to get things done. During the height of the panic, he had a daily conference call with Bernanke, Geithner, and Governor Warsh. Together, they were the “Four Musketeers.”

Prior to Kohn’s elevation to the Board in 2002, staff economists had never moved up to a policy chair. But we’re lucky he was. By bringing institutional memory to the Fed’s inner circle, he helped us avoid a second Great Depression. He is one of the many unsung heroes of the crisis.

Douglas R. Tengdin, CFA
Chief Investment Officer
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