This week, Ralph Benko published a piece in Forbes that outlined what I would consider two fundamental problems with Janet Yellen’s Federal Reserve: its willingness to experiment and its growing politicization.
As Benko states in the opening of his piece, economic mobility depends on when and how quickly the Fed decides to tighten or raise interest rates. Although the left has called for continued easing, keeping interest rates low or at zero in order to promote job growth, they are unfortunately misguided.
Although Yellen has been adamant about helping workers, gaining media attention for her portrayed empathy, our country’s best kept secret is, perhaps, that free-market advocates are also pro-worker. Nothing is better for job creation than a free-market where a “rising tide lifts all boats.” That concept is foreign to Chairman Yellen, however, and she has done a fabulous job of connecting exclusively with the left, going so far as advocating for a social safety net and social services at the Boston Fed.
Clearly, that is not the appropriate venue to speak on such matters.
For that reason, American Principles in Action, an Atlas Network partner, delivered a letter to Chairman Yellen, signed by 20 high profile free-market advocates (including the Sound Money Project’s Judy Shelton,) asking her to meet with “representatives of the right” as well.
If the Fed is to be politicized, then the interactions should at least be equitable across the board. After all, “the difference between members of the humanitarian left and humanitarian right is one of means, not ends.”
Throughout the rest of his article, Benko goes on to discuss the various schools of thought regarding rule based monetary policy, ultimately asking, “which rule would likely be optimal for fomenting equitable prosperity as well as price stability?”
It remains an open question.
To read Ralph Benko’s article in its entirety, click here.