The Fed goes woke
The Federal Reserve could become a threat both to liberty and to the economy it is supposed to safeguard.
For one of the increasingly numerous examples of the Fed pushing beyond its legal mandate, consider an Oct. 20 forum planned by the Federal Reserve Bank of Minneapolis called “Racism and the Economy : Focus on the Wealth Divide.” It’s the ninth in a series of race-obsessed forums on issues ranging from healthcare to housing to criminal justice. (Since when was criminal justice an issue for central bankers?) This particular event “focuses on how racialized barriers to wealth accumulation deny families and communities long-term economic mobility and financial resiliency,” and “a panel of practitioners, scholars, and community leaders will propose and discuss bold strategies to finally reverse these trends.”
To be clear, discussions like these can be quite worthwhile and productive. (I am a panelist for just such an event down here in Alabama the day before the Minneapolis Federal Reserve event.) All of us should want to ensure that the economy encourages upward economic mobility and that race not be a deterrent.
Still, such discussions are the province of academic, civic organizations, or elected political leaders. They are far from the purview of central bankers acting with vast governmental authority but almost no public accountability. These forays into non-banking policy and political issues are majorly misguided for two reasons. They put the economy at risk by distracting from the Fed’s core missions, and they could allow the Fed to accumulate unwonted power without (small-‘r’) republican guardrails.
The Federal Reserve system is complicated, and in some ways ingenious, as it gathers vast amounts of both qualitative and quantitative data, much of it hard data but plenty of it anecdotal (of sorts) from leading businessmen who serve on its regional advisory boards. On the other hand, with restraints on its operations being rather amorphous, and with the immense effects its banking decisions can have on the health of the entire U.S. and world economy, the Fed’s independence from democratic accountability can be almost as much a danger as a good to the public weal. …
A bank is a bank is a bank. It should not be a social-justice organization. Especially if it enjoys all the force of, but none of the ordinary restraints on, an already huge elected government.