Truth SHOULD be a high duty of central banking, ex-Fed Governor Alan Blinder says


5:16 ET Tuesday, November 15, 2011

Dear Friend of GATA and Gold:

For years many Internet sites have attributed to the economist Alan Blinder, now a professsor at Princeton University in New Jersey, a provocative comment reportedly made on a Public Broadcasting System program in 1994 during his service as a member of the Board of Governors of the Federal Reserve System:

"The last duty of a central banker is to tell the public the truth."

An Australian friend of GATA, A.F., recently went looking for authority for the quotation and your secretary/treasurer suggested that he start with Blinder directly.

... Dispatch continues below ...


Be Part of a Chance to Discover Multi-Million-Ounce Gold and Silver Deposits in Canada

Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada.

Check out the exploration program on our Allco gold/silver project :

-- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit.

-- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries.

-- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited.

To learn more about the Allco property or Northaven's other gold and silver projects, please visit:

Or call Northaven CEO Allen Leschert at 604-696-3600.

As it turns out, Blinder was very glad to be asked, for he both doubts that he made the statement even as he long has been concerned that it could be construed literally rather than as criticism and thus be used to misrepresent his views, which are emphatically that central banks should be more open and transparent.

As GATA has been among those attributing the quotation to Blinder, we are grateful to him for providing the statement appended here to set things straight.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Tuesday, November 15, 2011

I have been trying for a long time to track down this false attribution, and A.F. has been very helpful, for which I am grateful.

As anyone with even a nodding acquaintance with my record knows, for decades I have been urging, needling, and cajoling the Fed to be more open and transparent. Although the Fed has come a long way, I still am urging more openness. The quotation in question is the opposite of what I actually believe and have written many times.

I have not been able to find the source of the exact phrase quoted, if there even is one. If I ever said it, which I am beginning to doubt, it was either in the context of listing a central bank's duties (with the duty of openness listed last) or in the context of contrasting my views with the secretive, closed-mouth tradition in central banking.

But I'm starting to think that the quotation was made up out of whole cloth. Why?

With A.F.'s help, I was able to pinpoint a 1999 Wall Street Journal story that reported on survey research I did. (This research eventually was published in a paper in the American Economic Review in December 2000.) The Wall Street Journal story was accurate; it does not contain the alleged quote. What it (correctly) says is that, in ranking eight reasons why credibility is important, central bankers ranked last "a duty to be open and truthful with the public."

Here's the excerpt from my paper:

"F. A Duty to Be Open and Truthful (Q8). A quite different reason for thinking credibility important is that 'central bankers are public servants who therefore have a duty to be open and truthful with the public.' A confession is appropriate here: This is my personal favorite reason for why a central bank should strive to be credible, which to me means matching its deeds to its words. But survey respondents rank it either last (among the central bankers) or next to last (among the economists). The mean score for the central bankers is 4.00 (which translates to "agree"); but it is only 3.30 among the economists. Perhaps, as one central banker wrote on his survey, central bankers do not like to think of themselves as 'public servants.'"

Notice that I characterized this reason of truthfulness as "my personal favorite" even though it was the least favorite among central bankers who responded to my survey. Notice also that the phrase "the last duty of a central banker is to tell the public the truth" does not appear in the passage.

I hope this is helpful, and you have my permission to reproduce the contents of this e-mail anywhere.

Thank you.

Alan Blinder
Economics Department
Princeton University
Princeton, New Jersey

* * *

Support GATA by purchasing a silver commemorative coin:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:


The United States Once Again Can Establish a Stable Dollar Worth Its Weight in Gold

Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, has released a plan to restore economic growth through a stable dollar.

The plan, titled "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies," responds to the recurrent economic crises of the last century and outlines a detailed proposal for America's leadership on "how we get from here to there." That is, how we get from the present unstable paper dollar to a stable dollar as good as gold.

James Grant, author and editor of Grant's Interest Rate Observer, says of the Lehrman plan: "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman the country has finally found him."

To learn more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: