The Kansas City Federal Reserve is losing a great voice with the departure of outgoing President Tom Hoenig.
Hoenig was often a lone voice of reason against maintaining record low interest rates. Last January, when members of the Federal Reserve voted to leave interest votes alone, Hoenig cast the sole dissenting vote. It was the first time in more than a year that the Reserve vote wasn’t unanimous.
And, as his mandatory retirement date approached, he became an even louder critic of government run out of control.
Last February, he warned that U.S. fiscal policy was on an “unsustainable course.” He said the government must adjust its tax and spending programs or risk a crisis.
“It is that simple. If pre-emptive corrective action is not taken regarding the fiscal outlook, then the United States risks precipitating its own next crisis,” Hoenig said.
He warned then that U.S. fiscal policy must focus on reducing the debt buildup and its consequences.
He turned his sharp fiscal eye to Kansas City in a final speech to the Kansas City Chamber of Commerce last week. Telling the crowd he was no stranger to controversy, Hoenig said Kansas City, Mo., should find a revenue source to replace its 1 percent earnings tax.
He said the city income tax is hollowing “out the core of Kansas City.”
Due to Federal Reserve rules that require retirement at age 65, Hoenig’s days at the Reserve were numbered on Oct. 1, 2011.
It’s discouraging to lose such a voice of fiscal reason during this period of economic strife. Although Hoenig only cast 12 dissenting votes of 67 total, having a seasoned voice of dissent is always welcome on any such body.
Now, the Kansas City Federal Reserve turns to Terry Moore, president of the Omaha Federation of Labor, AFL-CIO. Moore will lead a committee to seek a new president of the Kansas City Federal Reserve.
Hoenig will be difficult to replace.