OK, thanks for the clarification. I believe in the truth. If it leads to the Fed is the best thing we have going for us, so be it. If not, then we need to examine that and work for change. So we’re discussing “modern monetary policy”. What is that exactly?
The reason I ask is that definitions are important. We saw that problem earlier in defining inflation - a monetary phenomenon causing a general increase in prices aka too many dollars (or other nominal currency) chasing too few goods.
My point is that I’m a free marketer and that goes along with my other beliefs, driven by personal experience and knowledge of history. I love liberty, but hate anarchy. My experience is that human beings do spontaneously order their lives. I experienced that as a kid when we organized our own games without a single adult influence or observer. We were our own referees and designed games with objective rules, strict standards and they worked very well.
I’ve observed this directly in business where trust is critical and miscommunication kills deals and trust. This spontaneity is driven by self-interest. The kids who wanted to play figured out the rules that made the game fun. Those that didn’t undermined the process and were expelled or they conformed of their own free will and choice.
We both recognize the benefits of free trade between individuals regardless of their national origins, location, skin color, et al. We both recognize that government has a role to play - a nation of laws, good objective laws that lay out the playing field. We don’t want fraud, we need a fair and objective judicial system founded on the right to contract and private property. Commerce is deceptively simple and can get quite entangled as we’ve seen recently and throughout America’s history.
What causes that entanglement? Usually, individuals can resolve these entanglements via contract (some are poorly written and end up in front of a judge who can make it worse) and clear property rights. What entanglements usually cannot be resolved? Those in which government uses force to play the game. Take a look at the market problems in America and you’ll find some government policy skewing the market in an unnatural direction.
Is the Fed doing that? I think it very well is, given my previous experience with life and direct observation of government intervention in the markets in which I work. The argument that the Fed benefits us flies in the face of that. It is a very socialistic position. It is an extraordinary claim and deserves extraordinary proof.
For the Fed to be good for what we would call the General Welfare - that is no bias for or against a segment of our nation - it would have to be peopled by prescient angels as third parties, disinterested in the results and wholly objective. I don’t have any example of that outside of liberal/progressive/Marxist theory. I reject liberalism due to my direct experience with it (Chicago Ill-Annoy is where I live). This, not some Jekyll Island conspiracy theory, is what causes me to question the Fed.
They missed both the Great Depression and now the Great Recession. Why are they so good? Why can’t markets set interest rates?
The big difference between with that stuff in the 1800's and now happened in the 1930's when banks got insured and the dollar's value got moved over to consumer purchases and off precious metals. Another big change that came in was swearing off deflation. That happened in '33. Back in '13 when the fed was created nothing much happened w/ monetary policy which changed little in the decade before to the decade after. Modern monetary policy has nothing to do w/ charging interest and creating money out of nothing. That's been going on for thousands of years --it's as old as money itself.
Question is where do we want MP to take us? Fewer bank failures. Stable prices from year to year. We still together?