Crisis
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Monetary Policy in a Pandemic
“The Fed’s new lending programs were not very helpful, and they come at a potentially high cost. Insofar as they were designed to allocate credit, as opposed to merely providing liquidity, they amount to an expansion of the Fed’s mandate. And, although the extent of the Fed’s credit allocation was limited this time, it has…
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What Should the Fed Do Now?
“As cities and states ease their lockdowns and restrictions, the Fed should continue to support the recovery with accommodative monetary policy. As Powell described, ‘A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.'” ~ Thomas L. Hogan
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The Fed Needs a Shed
“The crisis period is now behind us. The need for these facilities, if ever there was one, is now past. It’s time to put away the emergency lending tools.” ~ Thomas L. Hogan
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Can the Fed Reduce Inequality?
“If the Fed aims to reduce inequality, it should use policies that are known to be effective. There is little scope for affecting inequality with monetary policy. Reducing banks’ regulatory burden reduces inequality by improving the lives of Americans with the lowest incomes.” ~ Thomas L. Hogan
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Powell Must Choose: Fiscal Restraint or Runaway Inflation
“Jerome Powell and those steering fiscal policy choose from two paths: fiscal responsibility or monetary debasement. If he is unable to maintain stable expectations of low inflation, the latter path awaits.” ~ James L. Caton
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The Fiscal Fed
“Allowing the Fed to become a catch-all institution undermines its independence and ability to conduct monetary policy. If every job is the Fed’s job, it won’t do any of them well.” ~ Nicolás Cachanosky
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Inflation, Credit Allocation, and the Fed
“At the behest of Congress, the Fed has opened new facilities far afield of its traditional mandate. There is still some risk that the Fed will lose control and inflation will get out of hand. But there is a much bigger risk that the Fed will misallocate credit, reducing long run economic growth in the…
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The Federal Reserve Is Both Too Politicized and Too Powerful
“If we don’t want history to remember COVID-19 as the event that cemented political control over monetary policy, we need to act soon. The Fed’s emergency programs must be halted and eventually retired; its balance sheet must shrink to pre-crisis levels; and Congress must cease directing the Fed to engage in fiscal policy, even amidst…
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Did the US Lockdown Too Late and Open Too Soon?
“The U.S. imposed lockdowns at the same time as Europe, did so with comparable levels of stringency, and actually reopened at a later date and slower pace than most European nations.” ~ Phil Magness
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Bill Gates: From Entrepreneur to Supervillain
“Supervillains coerce and harm. Successful entrepreneurs serve and enrich humanity. Gates should return to his entrepreneurial roots.” ~ Barry Brownstein
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The Reluctant Fed
“Fed officials should follow the example set by Ben Bernanke. They should be ‘extremely reluctant’ to engage in facilities like the MSLP, SMCCF, and PMCCF. Such programs are ‘outside the range of [the Fed’s] responsibilities.’ They are fiscal policies that ‘are best resolved by Congress’ since they require ‘balancing political and social priorities.'” ~ Thomas…
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COVID-19 Made the Federal Reserve Sick
“The change in the Fed’s mandate is not something we can afford to ignore. Its new policies come with significant economic and political costs. If we do not come to grips with them, the Fed might not be able to help much when the next crisis hits.” ~ Alexander W. Salter
