1) The Fed should create the outcomes such that their predictions were wrong
2) While also just having a bad interpretation of data to begin with
3) The Fed is only imagining that its toolkit can cause a specific outcome for economic growth, but it cannot cause humans to transact a certain way or predict what a large group of humans (or large pool of capital) will do. No economist can, and the other economists don't have an infinite balance sheet to try to influence it either.
4) The Fed was never asked to or mandated to do the things it does to stimulus the economy. (Caveat, the stimulus bills in 2020 are a major exception). The Fed just notices that nobody can stop it. Similar to the Supreme Court realizing that and testing it in Marbury v Madison. Congress lacks consensus on it and everyone is afraid of the alternative (Congress having to deal with monetary policy themselves, politically).
I agree. Congress is paralyzed (far more than the usual) when it comes to monetary policy and financial services regulation. It's officially their job but not their wheel house. Unsettling.
the job of the Fed is a proven impossible one. Their job is to nudge the entirety of the economy towards one or two of the Fixed Exchange Rate, Free Capital Flow, and Independent Monetary Policy at any given time, but never all three at once.
I still remember Bernanke’s pronouncements before the 2008 crash that everything is just fine. It’s hard to not conclude that they either aren’t very competent or are playing political games.
> remember Bernanke’s pronouncements before the 2008 crash that everything is just fine
The Fed chair saying "we're fucked" is, on its own, enough to cause a credit crisis. (This is why the Fed doesn't tend to make blanket forward-looking statements like "everything is just fine.")
You don't 'need' the fed. The country lasted 150 years without one, and shortly (less than 20 years) after its introduction, a deflationary cycle and great depression ensued. The fed preventing a deflationary cycle has been thoroughly and mercilessly disproven.
Either the fed is powerless to stop the economic crisis we've suffered, or they're too incompetent to manage them. Either way it looks like they need dissolved.
The fed couldn’t possibly stop a deflationary cycle when the currency/population ratio was determined by how many atoms of non-oxidizing noble metals happens to be in the earth’s crust.
The federal reserve themselves disagree with you [1].
Also note [2]:
"In 1913, this problem was addressed by the creation of the Federal Reserve System (Fed).33 The
Fed was to remedy the situation in a two ways. First, it would provide a means by which banks
could borrow in times of stringency to satisfy their customers’ demand for cash. Second, it could
create a new form of money, Federal Reserve notes, which could be expanded or contracted in
quantity to respond to the need for more cash."
"The creation of the Federal Reserve had little if any effect on the gold standard. The dollar was
still defined in terms of gold. Federal Reserve notes were redeemable in lawful money. The Fed
not only operated under the gold standard, but was charged with maintaining it, and kept a
percentage of gold cover for its notes. Gold still dictated the value of the dollar. "
“ Because the international gold standard linked interest rates and monetary policies among participating nations, the Fed’s actions triggered recessions in nations around the globe.”
That’s what I was alluding to, sorry for not being clear :)
There's not been a run on banks since the Fed's existence. The country needed a "Fed" - you can only say that they're unneeded because you have not experienced a time when they didn't exist and bank deposits couldn't be secured.
It's like people who ask why they need to be vaccinated for polio now that there's very few cases of it.
1) The Fed should create the outcomes such that their predictions were wrong
2) While also just having a bad interpretation of data to begin with
3) The Fed is only imagining that its toolkit can cause a specific outcome for economic growth, but it cannot cause humans to transact a certain way or predict what a large group of humans (or large pool of capital) will do. No economist can, and the other economists don't have an infinite balance sheet to try to influence it either.
4) The Fed was never asked to or mandated to do the things it does to stimulus the economy. (Caveat, the stimulus bills in 2020 are a major exception). The Fed just notices that nobody can stop it. Similar to the Supreme Court realizing that and testing it in Marbury v Madison. Congress lacks consensus on it and everyone is afraid of the alternative (Congress having to deal with monetary policy themselves, politically).