|
> Their job is to act a lender of last resort, not to centrally plan the economy despite what you think The historical purpose of an independent central bank is to provide credibility to the currency (and, by way of that, also to provide some credibility to debt, especially government debt, denominated in the currency) by centrally planning monetary policy, and doing so at armsome length from the fiscal policy of the government. The job of the Federal Reserve, specifically, as laid out in law expressly includes managing monetary policy with specific prioroties regarding productivity, employment, and inflation -- that is, within certain parameters management of the economy via monetary policy. So, factually, you are wrong, no matter whatn ideologically, you think their job should be. > What's implied here then is a gross misunderstanding of what money actually is: a means of instrumentation and measurement. Money is a number of things, but while it's something of a very loose proxy measure for somethings, this is, historically, neither the primary intended purpose, nor the primary practical function of money. > When supply of money in relation to other "things" is constantly and artificially manipulated, it becomes near impossible for the prices of goods and services to reflect actual information about fundamentals, comparative advantages, etc. Insofar as this is true at all, it's just as true if the changes are due to forces other than central planning. And no matter what you use as money, and how you manage it, it's supply in relation to other goods and services is going to change. |