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Before the Federal Reserve, recessions devastated the US economy every 20 years in the United States. When the Fed is actually given the autonomy to do what’s r

Before the Federal Reserve, recessions devastated the US economy every 20 years in the United States. When the Fed is actually given the autonomy to do what’s right it’s a pretty effective system. The last two recessions were pretty bad but they weren’t due to monetary policy but rather fiscal policy + bad actors and a pandemic. The skeptic in me questions the motivation of public figures who blame all economic woes on the Fed. It really checks off a lot of populist scapegoat boxes * Un-elected technocrats making important decisions in the shadows * big government interfering in the economy * impossible to understand as a layperson (for anyone?) * a big departure from traditional ways of doing things so people think it was better in the good old days Additionally it’s a good way to distract from America’s dismal fiscal policies. Finally, I think there’s a physiological component where people blame economic hardship on the tangible incarnation of wealth - money - as opposed to more abstract systems. It’s a way to map their emotions on something they know and understand.

notch656a 5y ago
>Before the Federal Reserve, recessions devastated the US economy every 20 years in the United States And other than in the afterglow of victory in WW-II, this continued on, with the additional hazard of yet even more power for government to mismanage the monetary supply. >The last two recessions were pretty bad but they weren’t due to monetary policy but rather fiscal policy + bad actors and a pandemic. Monetary policy and fiscal policy have a habit of being intertwined when one of the feds main mechanisms for introducing currency into the public is to buy various bonds and debts that are influenced by fiscal policy. The fact is for most recessions you can't put all the blame in any one box.
mindslight 5y ago
> When the Fed is actually given the autonomy to do what’s right it’s a pretty effective system Effective at what? By preventing recessions from fully proceeding, the Fed stops the cycle of creative destruction. It's certainly nicer for the employees of moribund businesses who don't get laid off, but according to economic reasoning (as applied everywhere else), they represent a misallocation of labor. At the large scale, bad bets end up being covered by the house rather than the investors who made them losing out. > The skeptic in me questions the motivation of public figures who blame all economic woes on the Fed This doesn't have any bearing on the truth of the matter. Given that analyzing the Fed is not a mainstream topic (especially for the blue tribe), the skeptic in you should do more questioning of the official narrative. > it’s a good way to distract from America’s dismal fiscal policies It is the US's dismal fiscal policy. Trillions of newly created dollars are handed to the financial industry, but escape political criticism as spending since they're "debt" that technically might have to be paid back (even though they will never be paid back, just like the legislative government's debt). Meanwhile any scrap that might mitigate the inflationary pain for the middle and lower classes gets scrutinized and shot down as a ridiculous handout. Consistency would mean either giving some of the newly printed money to individuals (MMT), or stopping the handouts to the financial industry.

notch656a 5y ago

>Before the Federal Reserve, recessions devastated the US economy every 20 years in the United States And other than in the afterglow of victory in WW-II, this continued on, with the additional hazard of yet even more power for government to mismanage the monetary supply. >The last two recessions were pretty bad but they weren’t due to monetary policy but rather fiscal policy + bad actors and a pandemic. Monetary policy and fiscal policy have a habit of being intertwined when one of the feds main mechanisms for introducing currency into the public is to buy various bonds and debts that are influenced by fiscal policy. The fact is for most recessions you can't put all the blame in any one box.

mindslight 5y ago

> When the Fed is actually given the autonomy to do what’s right it’s a pretty effective system Effective at what? By preventing recessions from fully proceeding, the Fed stops the cycle of creative destruction. It's certainly nicer for the employees of moribund businesses who don't get laid off, but according to economic reasoning (as applied everywhere else), they represent a misallocation of labor. At the large scale, bad bets end up being covered by the house rather than the investors who made them losing out. > The skeptic in me questions the motivation of public figures who blame all economic woes on the Fed This doesn't have any bearing on the truth of the matter. Given that analyzing the Fed is not a mainstream topic (especially for the blue tribe), the skeptic in you should do more questioning of the official narrative. > it’s a good way to distract from America’s dismal fiscal policies It is the US's dismal fiscal policy. Trillions of newly created dollars are handed to the financial industry, but escape political criticism as spending since they're "debt" that technically might have to be paid back (even though they will never be paid back, just like the legislative government's debt). Meanwhile any scrap that might mitigate the inflationary pain for the middle and lower classes gets scrutinized and shot down as a ridiculous handout. Consistency would mean either giving some of the newly printed money to individuals (MMT), or stopping the handouts to the financial industry.