From The New York Times:
House Republicans Resume Efforts to Reduce Fed’s PowerBy BINYAMIN APPELBAUM, JULY 10, 2014
WASHINGTON — House Republicans frustrated by the Federal Reserve’s expansive economic stimulus campaign and its growing role as a financial regulator are renewing their efforts to constrain the central bank.
The Fed would be required to set monetary policy based on a published formula under legislation introduced this week by leading Republicans on the Financial Services Committee. Other bills would eliminate the Fed’s responsibility to maximize employment, or eliminate the Fed entirely.
The bills face uncertain prospects in the House, and have no future in the Senate while it remains under Democratic control. But they highlight ideas that Republicans are likely to revisit if they win a majority in both houses of Congress in the midterm elections.
“We have seen a radical departure from the historic norms of monetary policy conduct,” Representative Jeb Hensarling of Texas, who is chairman of the Financial Services Committee, said at a hearing on Thursday. “Monetary policy is at its best in maintaining stable, healthy economic growth when it follows a clear, predictable rule or path.”
An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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The Economic Orthodoxy/Cranks are on a collision path with reality. Few people of any stripe have confidence in what they do/say and now, if Dems lose in november, Econo-cranks may finally be removed by force of law from government. What will it take to remove them from schools and universities? The Republicans have no clue what they are talking about but in the long run are really no worse than your typical orthodox economists. They may actually cause less destruction and harm because they react to what voters want rather than reacting to false theories in ways that are completely irrational.
ReplyDelete"Squaring the circle."
ReplyDeleteI had to look it up: to solve an unusually difficult problem, perhaps. Tom, I take that as an extraordinary compliment. Thank you.
And then my wife says maybe it's something like putting a square peg in a round hole, she says.