After the chairman, at least in my opinion, Don has had a greater impact on the Fed's monetary policy process than any other single person, ... He was very close to the chairman, and they discussed issues frequently. He and this chairman were really a team.

It's risky just to sit back and wait for inflation to show up before we do something, ... One point arguing for monetary restraint is that we seem to have reached a stage where inflation is no longer falling.

Let's assume inflation averages 1 to 2 percent. Then you could see maybe the natural funds rate would be -- I don't know -- 3.5 percent, something like that.

It's risky just to sit back and wait for an upward trend in inflation to show up before we do something.

It would seem to me he would be more comfortable with a freer exchange of ideas, not coming in 100 percent convinced of what should be done.

I don't think it's a good idea to take a lot of cash out of your bank and put it under your mattress. Why? Because the Federal Deposit Insurance Corp. does insure up to $100,000 of your money in the bank -- but it doesn't insure your mattress.

At the same time, we need to proceed with some caution, because there's a fair bit of uncertainty about the economy's behavior right now.