By Al Lewis
ASPEN, Colo.--Foreign money pouring into the U.S. should be invested to put more Americans to work, said Richard Fisher, the president of the Dallas Federal Reserve Bank, on Thursday at the 2012 Aspen Ideas Festival.
"We're the best-looking horse in the glue factory," he said in a panel discussion moderated by CNBC's Maria Bartiromo, titled "Can the Federal Reserve Stimulate the Economy?"
That's why foreign money is coming here, Fisher said, adding that now it is up to fiscal authorities--meaning Congress, not the Fed--to set clear tax and regulatory policies, and create incentives for companies to put people back to work.
Mr. Fisher has long said the Fed has done too much in trying to stimulate the economy.
"No amount of monetary policy can substitute for what's needed from our fiscal authorities," he reiterated Thursday.
Mr. Fisher also has been an advocate of breaking up America's too-big-to-fail banks.
He continued these themes at the ideas festival and promised a "summer reader" to follow on the buzzing report his bank issued earlier this year about breaking up too-big-to-fail institutions. "We think the least worst option is to break up these largest institutions," Mr. Fisher said.
Mr. Fisher said he expects interest rates to remain low for "a long time" in keeping with the Fed's announced policy. But Mr. Fisher added there's little the U.S. central bank can do to help Europe with its debt problems.
Taking questions after the panel discussion, Fisher conceded to a hypothetical question that if Europe were to get worse, or the U.S. economy suffered an unexpected shock, he might support more Fed accommodation.
"We would have to watch and see what develops," he said. "We are a tool that can be used but we would have to have a serious discuss about using that tool."
On a positive note, Mr. Fisher said he believes the U.S. housing market has finally hit bottom, and the world isn't so much going through a financial crisis, but a "rebooting" necessitated by trading technology and the globalization of financial markets.
"The world is going through a process of needing to modernize and reboot fiscal policy," he said.
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