Lord forbid...we don't want to "encroach" on the Fed's independence
JACKSON HOLE, Wyoming (Reuters) - Increasing political encroachment on the Federal Reserve, particularly from the Republican Party, could threaten the central bank's hard-won independence and undermine confidence in the nearly 100-year old institution.
That was the pervasive sentiment among economists gathered at the Fed's annual monetary policy symposium in Jackson Hole, Wyoming. Against the dramatic backdrop of the Grand Teton mountain, many said a closely-contested presidential race has turned the monetary authority into a political football.
"I do fear for it a bit if the election comes out that way, especially if some of the more radical voices, that happen to be Republican voices nowadays, get reelected," said Alan Blinder, Princeton economics professor and a former Fed vice chairman, adding that historically opposition to the U.S. central bank had come predominately from the left.
"There's a lot of hostility," said Blinder, who was appointed to the Fed by former president Bill Clinton.
The primary topic of conversation at the rustic mountainside resort was whether or not Fed Chairman Ben Bernanke and his colleagues would deliver another round of monetary stimulus soon.
By the way, there is melodramatic distortion of history in the article, the Fed didn't incur "hard won independence" it surfaced as a result of trying to control the economy subsequent the Panic of '07 as a fixture of Congress to avoid partisan politics. The Fed didn't win, the Congress, the same Congress which foisted the responsibility of banking back to banks, and currency valuation, which Jefferson warned would be the financial death of all of us, to an independent obscure "employee" of the government. Like all well intended Frankenstein monsters, after a few grunts and groans has ravaged the countryside ever since, absolute power by banks corrupting absolutely.
And if the Depression was an example of Fed competence, rather than the forces of illusionary wealth of the twenties, where were they when the bubble of irrational exuberance hit in the twenties, and where were they during the 30's when one failed political ploy after another fell throughout the period in three to four waves?
Bernanke's appearance is like the chickens playing the piano at the state fairs.Everyone gathers to watch.Someone puts in a quarter,out falls some corn,and walla, Ben the chicken pecks out the same sour tune on the piano.
It's not that simple. Removing the Fed is like removing a cancerous tumor:
You've got to get the entire cancerous package. You have to get rid of any stray cells circulating the body. You have to get rid of any new sites that have metastaticized far from the original tumor site.
The body has to be just sick enough to warrant radical surgery, but just healthy enough to survive and warrant any recidivism.
Removing the illusion of growth, namely the Fed, doesn't mean somebody can't produce bonds to support the government, can't meddle with the currency valuations, can't sit by helplessly and watch private industry botch it up with first understanding degrading the currency isn't "help" it's fraud, and fraud not just in the simple sense "it's bad". But in the sense it just screws everyone over.
We have a Fed, other countries have a Fed, or are trying to have a collective Fed through one world financial systems.
Do you really want the value of money, without fixation to some basket case of commodities?
Do you really want this do nothing Congress to be in charge of financial systems?
This has to be parsed gradually. The last statement I just made, was spoken more elequently, by Ron Paul.