Kevin Warsh's Debut

The new Fed governor Kevin Warsh gave his debut speech yesterday, focusing on a fascinating and little understood phenomenon: the striking increase in firms' cash holdings.

The ratio of cash to investment has averaged about 60 percent during the past few decades...[But the ratio] soared to more than 150 percent by year-end 2004.

I got to know Kevin while I was working at the CEA and he was at the NEC. He is very bright and extraordinarily articulate.

Kevin also has a key credential for holding a high position in economic policy: He was once a section leader in ec 10.