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Broadly speaking we the people cheered for and demanded cheap money. Baby steps towards raising rates (during massive boom years) were decried by the markets,

by generj 4y ago

Broadly speaking we the people cheered for and demanded cheap money. Baby steps towards raising rates (during massive boom years) were decried by the markets, by politicians (an particular an ex-President) and by the populace generally who are not well informed on what central banks do. The central banks should have raised rates anyways - but let’s not pretend like everyone wouldn’t have hated them for causing a recession or even just a slow down in growth by doing so.

prottog 4y ago
> let’s not pretend like everyone wouldn’t have hated them The whole point of the nominal independence of the Fed from the political process is that they would be able to take unpopular decisions that may hurt in the short term but will further their dual mandate (maximum employment and price stability) in the medium and long term. Seeing as they cannot do that, and these days are venturing further away from their mandate by assuming the mantle of fighting climate change as well as racial inequity, we might as well do away with it entirely. It's not like the financial history of this country hasn't been replete with one crisis after another even after the advent of the Fed, and one dollar at the time of the creation of the Fed is worth about $30 now, so prices have only been stable for a strange definition of price stability. (For comparison, the Swiss franc inflated about 10x in a similar time period.)
NickC25 4y ago
>Broadly speaking we the people cheered for and demanded cheap money. Exactly! We saw what cheap money did to rebound the economy after the 2008 crash - it created the largest bull run we've ever seen. Politicians, hoping to keep their jobs (and make sure their trading accounts grew), said "yeah, we'll keep things right as they are" because they didn't want to be the ones that caused a cool down which would in turn cost them their jobs (and insider information).

by generj 4y ago

prottog 4y ago

> let’s not pretend like everyone wouldn’t have hated them The whole point of the nominal independence of the Fed from the political process is that they would be able to take unpopular decisions that may hurt in the short term but will further their dual mandate (maximum employment and price stability) in the medium and long term. Seeing as they cannot do that, and these days are venturing further away from their mandate by assuming the mantle of fighting climate change as well as racial inequity, we might as well do away with it entirely. It's not like the financial history of this country hasn't been replete with one crisis after another even after the advent of the Fed, and one dollar at the time of the creation of the Fed is worth about $30 now, so prices have only been stable for a strange definition of price stability. (For comparison, the Swiss franc inflated about 10x in a similar time period.)

NickC25 4y ago

>Broadly speaking we the people cheered for and demanded cheap money. Exactly! We saw what cheap money did to rebound the economy after the 2008 crash - it created the largest bull run we've ever seen. Politicians, hoping to keep their jobs (and make sure their trading accounts grew), said "yeah, we'll keep things right as they are" because they didn't want to be the ones that caused a cool down which would in turn cost them their jobs (and insider information).