No, too little.
Richard Fisher merits every bit of his outstanding reputation as head of the Dallas Fed. But we think he is wrong to suggest that the selection of the new Fed chairman should be kept out of politics.
The Fed is no more an apolitical institution than the Supreme Court. It is simply a political institution which has lost its way. Right now it is run by professors with a theory, a theory that is grounded in little logic and few facts. These professors, who have no prior management experience themselves, are taking the US right over a cliff. We need more political oversight, not less, because that is the only way to fire these people and replace them with more practical people.
We do not need any more back room deals in which special interests are well represented, but not the voters. Nor do we need self-appointed elites telling the people not to be concerned, because it is too complicated for them to understand. It is only hard to understand because these elites intentionally obfuscate and confuse. And they are often aided and abetted by the media.
The chairman of the Fed arguably has more power over the economy than the president. Yet most voters are completely unaware of what the Fed does. When the media says that the Fed “buys bonds,” they are are not told that this means the Fed is creating new money out of thin air. In particular, voters are not told that about the Fed’s key role in blowing up the dot com and housing bubbles and in bailing out Wall St at the expense of Main St and the average American.
Monetary politics was not always conducted in secret, away from scrutiny even of Congress. The Constitution puts Congress in charge of money and we have had great debates about the management of money in American history. Just take a moment to read President Andrew Jackson’s veto of the Second Bank of the United States Act (this bank was the Fed of its day) or William Jennings Bryan’s famous cross of gold speech accepting the Democratic nomination for president.
The Fed more than any other player is responsible for today’s collapse in real income for the average American and accompanying crony capitalist corruption. We should be having a very public debate about the appointment of the next Fed chairman. Voters ought to learn enough to have a view and express that view to Congress. The monetary elite have failed the people. The people need to change this in the only way they can, by speaking up to their elected representatives.