..this is a somewhat pejorative term that some traders and investors use when it is obvious a proponent of a certain investment strategy has a position in same. The spectrum of human behavior is sufficiently narrow to ensure that this happens so often as to consider it an afterthought. Still, on some occassions, it still behooves one to practice this exercise in assessing when a "well known" economist or bank pundit has a decided interest in the outcome.
Case in point below. Mr. Feldstein is a director with AIG, which holds massive amounts of sub-prime debt securities...now why would he take the view that the fed should cut when just last year he thought inflation was of paramount concern to the fed? It is unfair to single out Mr. Feldstein as it seems every Wall St. bank also wants the Fed to cut for what is surely sound economic reasons having nothing to do with their own funding difficulties and financing prices...
Feldstein Warns of U.S. Recession, Urges Fed Rate Cut
By Scott Lanman
Sept. 2 (Bloomberg) -- Harvard University economist Martin
Feldstein said the U.S. housing slump threatens a broader
recession, and the Federal Reserve should lower interest rates.
``The economy could suffer a very serious downturn,''
Feldstein, head of the group that charts America's business
cycles, told a Fed conference in Jackson Hole, Wyoming,
yesterday. ``A sharp reduction in the interest rate, in addition
to a vigorous lender-of-last-resort policy, would attenuate that
very bad outcome.''
Feldstein made a case for lowering the overnight lending
rate between banks to 4.25 percent from 5.25 percent to cushion
the economy from the fallout of defaults on subprime mortgages.
Chairman Ben S. Bernanke told the same gathering on Aug. 31 that
the Fed will do what's needed to stop the past month's credit-
market rout from ending the six-year expansion.
Lowering interest rates may result in a ``stronger economy
with higher inflation than the Fed desires,'' a situation that
Feldstein described as the ``lesser of two evils.''