A Note on the Supposed Independence of the Fed - J�rg Guido H�lsmann - Mises Institute

A Note on the Supposed Independence of the Fed - J�rg Guido H�lsmann - Mises Institute: "Economic theory suggests that unaccountable, legally protected monopolies are inefficient. Without monitoring, governance, competition, and feedback such organizations make bad decisions and tend to be captured by special interests. Why should central banks be any different?

Empirical evidence suggests that unaccountable central banks misallocate resources and retard economic growth. Since 1913, the year the Fed was created, the dollar has lost 95% of its value. Easy credit from the Fed has made the US economy debt-dependent. It has encouraged irresponsible investment on financial markets and elsewhere. It has redistributed real incomes on a massive scale from the general population to the Fed’s main business partners: banks, financial firms, and government. It has not stabilized the American economy, but has made it much more fragile and prone to severe crises such as the present one. Put simply: the Fed is a government central planning agency, and it performs about as well as every government central planning agency in history."

"The Fed has had one great success: it is by far the largest funder of academic research in monetary and macroeconomics, employing hundreds of economists, financing conferences and seminars, providing paid consultancies, and so on. Is it any wonder that the majority of academic monetary and macroeconomists support the status quo?"