Stephen Miran on Regulatory Dominance, Shrinking the Fed's Balance Sheet, and the Return of Monetarism

David Beckworth (0:02)

Welcome to Macro Musings, where each week we pull back the curtain and take a closer look at the most important macroeconomic issues of the past, present, and future. I am your host, David Beckworth, a senior research fellow with the Mercatus Center at George Mason University. I'm glad you decided to join us.

Our guest today is Steve Miran. Steve is a former Federal Reserve Governor, a former CEA Chair, and a former two-time macroeconomy guest. He returns today to join us and discuss his work on the Fed's balance sheet as a governor, and also his recent work on the role of money in monetary policy. Steve, welcome back to the podcast.

Stephen Miran (0:49)

Thanks for having me back. It's great to see you again.

David Beckworth (0:51)

It's great to have you on. And if I have got my dates correct, the last time you were on the podcast was September 2024 So this show will be coming out in September 2026, so two years to the date.

And a lot has happened in your life since then. A lot. I mean, who knew? Maybe you did know it was coming, but you were CEA chair.

Stephen Miran (1:13)

Wow.

David Beckworth (1:13)

For the president, then you became a governor.

I mean, who knows? You might be a governor again, as openings appear on the Board of Governors. But I want to talk about your work on the Fed's balance sheet because that is a big topic now. It seems to have momentum. We have a balance sheet task force. And I think some of this momentum is due to you and your work, your paper, your speeches.

And then also time permitting will get to your work on monetary policy and the rule for money in that. Before we do that though, I'm sure listeners are dying to know, I'm dying to know kind of like the behind the scenes part of being a CEA chair and a Fed governor. So maybe give us a quick overview. What was it like to be a CEA chair? Let's start with that. Did you every morning get up and go visit Trump, give them an economics brief, or how did that role operate?

Stephen Miran (2:02)

Well, not every morning, but often, and there's a lot of, the role of CEA chairman is really, it's in the name, it's the Council of Economic Advisers.

And so you're providing economic analysis and economic advice to the president, to other members of the administration, to different parts of the government on a regular basis. And whatever the issue of the day is, whatever the big thing that people are working on, that's what you want to try and analyze and study and prepare on, so you can give them the best advice you can. And it applies from the president all the way on down. Anybody who needed economic assistance on a night of the work, and I was more than happy to get it.

David Beckworth (2:39)

So you were in the old executive building. In fact, I visited you once in that role. It's not that far of a walk to the White House. So you get a call to you, like you grab your laptop and you run down the hall and cross the little road there into the West Wing. Is that how it worked?

Stephen Miran (2:55)

That's how it works. And yeah, so the CEA offices are in the Eisenhower building, as you said, and then you just cross West Exec Avenue and you walk right into the West Wing and into the Oval. And you're there, you're part of the admin, you're part of the way that's complex. And one of the interesting things about CEA is that you really work on a really, really wide variety of subjects.

And in the morning, it's tax policy. And then a little bit later, it's tariffs and industrial policy. And then a little bit later, it's regulations. And then later on, it's health care policy and education or something else. Right. And so you really are bouncing from subject to subject to subject in a really, really fascinating array of stuff that you work on. It really is a very, very, very, very.

David Beckworth (3:39)

Now briefly describe the difference between the CEA, which you chaired, and then also the NEC office, the National Economic Council. Is that the name of it?

Stephen Miran (3:49)

Yeah, National Economic Council, NEC. Yeah. So CEA and NEC are really the two economic components of the White House. Zoo economic policy components of the White House. And the difference is that the word advisors is in the name of CEA. And so CEA is really an advisory part, right? CEA exists to help formulate economic analysis and economic advice, economic policy, right? And so CEA might be really involved in trying to figure out what a good policy is and how would a good policy be structured and what types of things, you know, what we care about and what types of things can move the needle on the economy and what's going on in the economy, what are the data saying, where are things likely to go?