Should Chuck Norris be the next Fed chairman?
Just imagine the jokes ...
"Chuck Norris doesn't target inflation. He roundhouse kicks it into submission."
"Chuck Norris doesn't buy gold to hedge against inflation. Gold buys Chuck Norris to hedge against inflation."
Although the fitness guru and star of TV's "Walker, Texas Ranger" may not have a Ph.D. in economics and hasn't paid his dues as a Fed governor, some in the market think that he just may be a better choice to follow Ben Bernanke than a more-seasoned candidate like Larry Summers or Janet Yellen.
Is it a joke? Well, sort of.
Lars Christensen, chief analyst at Danske Bank, proposed the idea in a recent blog post, contending that the Federal Reserve should be more rule-based, with a more focused directive than it currently has. In this situation, anyone could be Fed chairman— even Chuck Norris—since explicit market conditions could dictate Fed policy, instead of a decision maker with more "discretion."
"We have far too much focus on who should run this institution rather than what the institution should be about. What rules should it follow? What should it target?" Christensen explained on "Squawk on the Street" Friday.
"For example, as I had suggested, nominal GDP, then it would be very clear. It wouldn't really matter who would be Fed chairman. ... We should define very clear rules for what we want to achieve and then, more or less, let the market decide on monetary policy."
Christensen argued that in the 1990's, a more rules-based approach was a good thing and allowed monetary policy to be guided by signals in the market, instead of the other way around.
"I simplify [the argument with] Chuck Norris," Christensen said, "in that the market determines monetary policy after the rule is defined."
In his role in "Walker, Texas Ranger," Norris was known for his unyielding devotion to law enforcement, justice and moral values, with a conviction similar to what Christensen would like to see from the central bank.
"We should try to move away from discretion. The great recession that we have lived through over the last five years has been characterized by an enormous amount of central bank discretion," Christensen explained. "I would suggest that instead we put out some rules, we try to follow them," pointing to the Richmond Fed's Robert Hetzel, who had a similar strategy dubbed "lean-against-the-wind" (Click here for Hetzel's 2007 position paper on the topic)
"This is what the Fed actually used to have prior to the crisis. We lost that during the great recession because we lost track of what we were really targeting," he said.
Chuck Norris' management agency didn't respond to an email asking whether Norris would consider the Fed chairman role.