For Orderly Dissolution of the Fed, before It Does Us Even More Harm | Jim Powell | Cato Institute: Commentary

For Orderly Dissolution of the Fed, before It Does Us Even More Harm | Jim Powell | Cato Institute: Commentary: "The Fed was established 97 years ago, and Fed officials were given considerable power over the economy as if they knew what they were doing, but they didn't. They're still winging it today.

The Fed failed its first big test in 1920 when the end of World War I was followed by the sharpest depression on record. Wholesale prices plunged more than 50%, the economy contracted by almost 24%, and unemployment doubled to 11%. This was the kind of crisis the Fed was supposed to prevent."

"in 2002, Ben Bernanke, then a Fed governor, acknowledged the Fed's role in these calamities: 'We did it. We're very sorry. We won't do it again.'"

"Intended to save our economy, the Fed has turned out to be perhaps the biggest single source of economic instability. It's the big pig at the trough, and it's unpredictable. It doesn't follow any rules consistently. When it moves, everyone else can be badly knocked around.

The very unpredictability of the Fed causes uncertainty that discourages investors and employers from making commitments for the future — an important reason why we're experiencing a sluggish, jobless recovery now.

Theoretically, the Fed might be able to work if there were perfect people, but there don't seem to be any of those around. After almost a century of the Fed's often violent roller-coaster rides, it's hard to see what might be accomplished with one more bit of tinkering such as with interest-rate targets.

It's time to begin planning for an orderly dissolution of the Fed before it does us any more harm."