There’s a major debate going on in Washington these about the future powers that should be in the hands of the Federal Reserve and its chairman, Ben Bernanke. But when you come down to it, who cares?
The main problem with the Fed in setting economic policy is that it has economists doing the job. And they aren’t looking in the right places in the right way.
Take the GDP. It’s increasing. Economists think that’s good. But such increases mean nothing in comparison to the way any increases are distributed. If the very top gets all the increases — which is pretty much what has happened since 1999 — then Main Street, i.e. real people, couldn’t care less that GDP is increasing. It doesn’t do us any good.
Or employment. Jobs may be coming back soon. A good thing? If your new job pays less with fewer benefits than your old one, then more employment simply means working harder to get poorer. And economists aren’t even looking in that direction.
Or inflation. The indicators in this realm used by Fed policy makers completely ignore the fact we now live in a nickeled and dimed economic culture. Fees, fines, co-pays, giving-less-for-more are the applicable rule in today’s markets and in people’s relationship with their governments, local and federal. That’s where inflation is now taking its biggest bite.
Out here in Real World as opposed to Economist World, we’re dying the death of a thousand cuts. A lot of us have come to regard Fedfolk and economists generally the way we have long regarded theologians. Bright people dabbling in realms beyond our ken and outside our daily interests.
Give the Fed new powers? Take away some of its present powers. Who cares? Who really cares?