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Federal Reserve: Don’t Blame Us For The Lousy Economy!
TND Guest Contributor: Paul-Martin Foss
The Fed’s latest Beige Book is out, and the finding is that the strong dollar is holding back the US economy. That dastardly dollar, always trying to ruin things for people. If you were to peer inside the heads of Fed officials when they put together “analysis” like this, their thought process would look something like this: 1.) The Fed and its monetary policy can never have negative effects on the economy; 2.) Must find some other explanation for poor economic performance.
Earlier in the year we heard the cold weather blamed for muted economic activity. Now we’re seeing the “strong” dollar blamed. What will the next excuse be? There are a whole host of reasons for diminished economic activity. Let’s face it, this “recovery” from the financial crisis has been pretty subpar, and business owners have a lot of reasons not to invest in new capital or new hires. Minimum wages are increasing in many areas, health care costs are climbing, and the potential for rising interest rates may make capital investment unprofitable in the future.
But the Fed deserves quite a bit of blame as well. It is the Fed that, after all, has tried to pin interest rates as low as possible for the past seven years. It is the Fed that, every six weeks, has the entire financial world on pins and needles as they await a possible change in monetary policy. Talk about regime uncertainty. But rather than accept any responsibility at all for exacerbating poor economic performance, the Fed will always blame something convenient.
Weather too cold? Well, nothing the Fed or anybody else can do about that. Weather too hot? Ditto. Strong dollar? That’s the Treasury’s problem. But the Fed might just be willing to sacrifice and engage in another round of quantitative easing. After all, what harm could a few trillion more dollars do? To make a long story short, if you’re expecting sound economic analysis rather than self-serving drivel from anything the Fed publishes, you’re wasting your time.
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About Paul-Martin Foss:
Paul-Martin Foss is the founder, President, and Executive Director of the Carl Menger Center for the Study of Money and Banking, an Arlington, VA-based think tank dedicated to educating the American people on the importance of sound money and sound banking.
Prior to founding the Menger Center, Mr. Foss worked in the U.S. House of Representatives for seven years, including six years as Congressman Ron Paul’s legislative assistant for monetary policy and financial services, and one year as Deputy Legislative Director for Congressman Thomas Massie.
As Congressman Paul’s legislative assistant, he assisted the Congressman in his duties as Chairman of the Subcommittee on Domestic Monetary Policy by helping to develop hearing topics, agendas, and briefing Congressmen and their staffs on monetary policy topics. Mr. Foss also was responsible for the management of Dr. Paul’s monetary policy and financial services legislation, including the “Audit the Fed” and “End the Fed” bills, and was co-editor of Ron Paul’s Monetary Policy Anthology, a multi-thousand page compilation of hearing transcripts, lecture transcripts, and other documents related to Dr. Paul’s chairmanship.
Mr. Foss received his Bachelor’s degree from The University of the South (Sewanee), and Master’s degrees from the London School of Economics and Georgetown University’s Edmund A. Walsh School of Foreign Service.
This article appeared on the Carl Menger Center for the Study of Money and Banking and is reprinted with permission, “Creative Commons 4.0.”
Source: http://thenewsdoctors.com/federal-reserve-dont-blame-us-for-the-lousy-economy/
