Yellen or Summers?
Bookmakers handicapping the selection of Ben Bernanke's successor as Federal Reserve chairman have decided it's a two-way race between the brilliant Larry Summers ("brilliant" seems to be permanently affixed to his name) and Janet Yellen, currently the Fed's vice chairman.
The battle lines have been drawn. Senate Democrats are circulating a letter in support of Yellen. Proteges of Robert Rubin are lining up for Summers. Female economists are standing up for sisterhood.
Honestly, people. Show a little imagination. I can think of several qualified candidates. All that's needed is a change of focus. With "forward guidance" elevated to a monetary policy tool, what we need at the Fed is someone who can wield it; someone akin to the Great Communicator.
1. IBM Watson
If you can win at "Jeopardy!," how tough can it be to calculate the effect on the bond market of reducing asset purchases by $20 billion a month?
IBM Watson, a question-answering computer system with 26,000 Twitter followers, wowed audiences in 2011 when it trounced previous "Jeopardy!" winners and took home the first prize of $1 million. Since then, Watson has taken on real-life challenges in the fields of medicine and finance.
IBM says it is joining forces with financial institutions to teach Watson the business of banking. Watson consumes vast amounts of data. Then it digests and communicates the information to its partners, helping them to identify risks and make informed investment decisions, according to IBM.
I bet Watson would have done a much better job than the banks in managing risks, than the rating companies in identifying junk mortgage securities, than Fed in making informed decisions. Milton Friedman always wanted to replace the Fed with a computer. Now here's the chance.
2. Bottlenose Dolphin
Biologists have long puzzled over what dolphins do with their huge brains. Now they know. A significant portion of that brain is devoted to acoustic processing, which suggests that communication is an important feature of dolphin life.
Researchers have found that bottlenose dolphins use a unique signature whistle to distinguish themselves from one another and communicate. They respond when their signature whistle is played back to them in the same way humans respond when someone calls their names.
Sound travels five times faster in water than in air, so dolphins' whistles and clicks constitute an efficient means of communication. Given the Fed's obsession with talk, there is something to be said for speed and easily identifiable sounds, assuming it's another dolphin doing the listening.
3. Edward Snowden
Edward Snowden, the former National Security Agency contractor camped out in Moscow's Sheremetyevo Airport while waiting for an offer of asylum, has no problem communicating clearly. After working for defense contractor Booz Allen Hamilton in Hawaii for less than three months, he walked out of the office with some of the nation's most highly classified secrets on a flash drive and shared them with all of us.
The U.S. has charged Snowden with espionage, but perhaps the NSA whistleblower could strike a deal with authorities given his unique qualifications.
Fed policy has evolved from guarding the "Secrets of the Temple'' (pre-1994) to letting it all hang out today. Installed at the helm of the Fed, Snowden would take transparency to a whole new level, making sure that everyone had access to all of the information all of the time.
4. Dale Carnegie
Dale Carnegie parlayed his prowess as a public speaker into a career, helping students and business leaders acquire the skills needed for persuasive presentations. His 1931 best seller, "How to Win Friends and Influence People," was the forerunner for today's self-help gurus.
Carnegie died in 1955, but his vision of leadership training is relevant today. The Fed, frustrated by what seems to be a hearing disability on the part of the bond market, might want to sign up for a course. This Carnegie observation is particularly pertinent: "When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion."
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)