While inserting a deliberate flaw for managers can be an effective tactic, it is not without risk. The flaw can be missed by all reviewers and forgotten by its creator, accidentally making it into the final product, as illustrated by a contract clause for a "horse and buggy."
The strategy of inserting an obvious flaw for a manager to "fix" is used across diverse fields. Known as "Atwood's Duck" in tech, it's called "the Admiral's Potato" in the navy or the "hairy arm" in advertising. This reveals a common psychological pattern in managing upward.
By creating five task forces to study Fed reforms, new Chair Kevin Warsh can delay controversial decisions. This strategy buys time and provides a convenient deflection ("we have a task force for that") when facing politically charged questions, particularly from a pressuring President.
The electoral success of Germany's far-right AFD party creates a political paradox. Since no mainstream party will form a coalition with them, traditional rivals like the conservative CDU and far-left Die Linke may be forced to cooperate to form governments, despite their mutual animosity.
Warsh's terse, non-communicative style is a deliberate strategy to force markets to focus on fundamental economic data rather than over-analyzing the Fed's every word. This approach aims to reduce volatility by making the central bank less of a focal point for market distortion.