I don’t get it. There’s been a lot of superstition surrounding the Fed lately but the Fed did what they were supposed to do during the recession but people like Tsing are acting like they did something wrong. If you want to argue against the Fed mandates, fine, but don’t act like they weren’t lawfully following their charge. Now with trump it’s getting all messed up. In this Econ The Fed should be actively decreasing the money supply and offloading it’s balance sheet to allow for private expansion but they’re not because of trump’s political pressure. Add on top of that he just nominated two stooges to further corrupt the Fed with his influence. When we combine the superstition of people like Tsing with real corruption in the fed and it’s a recipe for disaster.
Two things. First, the Fed chairs aren't acting merely within their mandates. Price stability and the impact of inflation continues to be under reported because of things like hedonics, "efficiency" and unequal weighting in price metrics. Said another way, inflation continues to run much hotter than the mandate because the Fed ignores the share of costs with things like food, health care and rent, and continues to think that, because dish washers have gotten 20% more efficient in the last 10 years, they've come down in price. So they're failing miserably on that. Second, they can't really do much to drive the employment mandate because, as any one with an IQ over 80 can tell you, the Fed doesn't drive employment and it can't make companies hire more people. The so-called "pushing on a string" narrative. Lastly, the driving up of asset prices (stocks, housing, etc) is not a mandate at all, but something the Fed's owner banks have found works well for them and the rich, and so this drives inequality as a good half of the country doesn't even have the money to get into the stock market. So yeah, the Fed chairs have failed miserably and continue to push the same broken model, with the only answer being "well, if it didn't work we didn't do enough money printing". The problem is that the money isn't going to where it is needed. Why? Because the Fed has no way of doing it correctly. Blame the Fed, and blame the Presidents putting the same clowns in office to do the same thing over and over again.
Superstition? I've posted charts, statistics and real analysis behind my arguments. What have you come back with that has any substance? I agree that the Fed should be tightening, not loosening. But I've also stated (which you somehow keep missing) that they should have been doing so for a long time, well before Trump came into power. So the errors they are making now are continued from before.
Again, you’re arguing against norms and accepted parameters such as how to gauge inflation and again, looking to me to defend it is misguided. You and I have completely different approaches to this. For instance I don’t agree with the so called dual mandate but I accept it instead of complain about it. Same as the way inflation is measured, it doesn’t account for the way people live and what impacts their lives and spending habits but again I’m not a complainer and certainly don’t blame some cabal of deep state bankers. What I see you complaining about is misguided and a waste of time. The fed is going to do what the fed is mandated to do. Don’t blame the Fed, blame the mandate. As to inflated asset prices, what about the other side, when assets were deflated due to a lack of government regulation? And what should have been done then? You look at one side of the coin only but you’re missing the other side of the coin. You think of this as a zero sum game in that the fed’s action only benefited banks - this is superstition. Ideally, the government should not be allowing Fannies to hold 40% subprime and banks to be leveraged 30:1 but they did. The failure of regulation is what caused the Fed to respond in accordance with its mandate. I get you don’t like the way the mess was cleaned up but you’re beef should be with the regulators not the fed.
Arguing against "norms" and "accepted parameters" (accepted by who?) is pretty much how progress is made on anything. What a joke! Which is stunning considering you are supposedly for the people and inequality of income and opportunity, as a liberal. If it is a waste of time, bugger off. You engaged me in this conversation. When were assets deflated due to a lack of government regulation? Where did I say it only benefited banks? I specifically point out that it benefited the rich, and even mentioned myself in the list of those it benefited. Of course, it hurts the poor, those on a fixed income and those who rely on savings. With the Fed, not the regulators. You do understand the Federal Reserve is a regulating authority, don't you? Well, obviously you don't.
Well I can’t tell you’re arguing against norms and accepted metrics. I had to pull out of you your problem is with the dual mandate. I am certainly for practical ways of increasing opportunity. I don’t buy into gimmicks though. The recession, which was a result of deregulation, led to deflation. Congress set the regulatory climate that created the subprime crisis, not the fed.
Horseshit. First of all, the Fed was totally on board with the housing crisis and even pushed adjustable rate mortgages that, when they jumped up in rate after the adjustment period, forced many out of homes they bought as those homes became unaffordable. They were unaffordable all along, but because rates were so low and banks pumped things like "no income, no verification" loans, anyone with a heartbeat could buy a McMansion. Second, it isn't that my problem is with the dual mandate (noting that you ignored my question on how many other central banks out there have a dual mandate). That's just a small part of this. What began this thread is me pointing out that the Fed is made up of academics with no real world experience and that putting a businessman on their board couldn't make it any worse.