Republicans propose a bill forcing the Fed to ditch the duel mandate

Jan 2009
5,841
50
#1
Some Republicans have proposed a bill to get rid of the Fed's dual mandate of price stability and full employment and switching it with a sole focus on price stability.

http://www.reuters.com/article/idUSTRE6AF49F20101116

...and this is why I would rather have the GOP in office- at least they show some signs of common sense. Now I don't have much faith in the politicians either way, but it's a start. Hopefully the Pauls can help keep support alive on this one.
 
Nov 2010
137
0
Co. Springs, CO
#2
Well I do not know much about the fed, how it works or why, but I will say that I am against QE2, and whatever the fed has been doing isn't working.

That being said, I am always about scaling back the power of government agencies, so GO REP!

Anyone know alot about how the fed operates like to give me a brief run down, or have any good reads on the subject?
 
#3
this was pretty much the issue in the late 70s when Voelcker was there...

inflation and unemployment = stagflation

they had tried to keep unemployment down by permitting inflation to balloon. They got both. Getting inflation under control helped ease unemployment.
 
Jan 2009
5,841
50
#6
Volcker wasn't all that bad (especially compared to Greenspan and Bernanke). He raised rates, which sure might have suppressed some growth, but it stopped a bubble- something that Greenspan didn't do and led to the mess we have now. Bernanke is following in Greenspan's footsteps, so that outcome doesn't look like it will be great either.


Inflation also went down during his tenure- but on that I am not so well read, so that is just going by the mainstream viewpoint- not always the most trustworthy with today's drunk Wall St., I know.

The main point here though Willyphd (and the reason I was happy to see this proposal) is that the Fed currently operates under a duel mandate where it's official policy goals are to achieve stable inflation and full employment. Anyone with even a bit of knowledge about markets knows that stable currency and full employment often don't go hand-in-hand and trying to do both with monetary policy could often be impossible. Furthermore, putting full employment at the hands of those who control money isn't a good idea because it promotes destroying the currency for the sake of full employment even if that employment isn't created stably. This often ends in disaster when bubbles form and pop- again, look at the current mess for proof.
 
Nov 2010
137
0
Co. Springs, CO
#7
Thank you for that bit of information myp, it makes sence to me that it is much more simple to strive for a stable dollor, and then work on un-employment as a separate issue. So I would have to agree that this is a good proposal.

Myp, do you know any good reads on the fed? I am weak in this and would like to learn more.
 

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