Applies to central banking in general.
Jeffrey Tucker Director of Foundation of economics education has a piece on the topic. He points to how this time elite central bankers met with protesters at the (ill now) famed Jackson Hole Conference. There is also a parallel opposition conference running critically looking at monetary policy:
Jackson Hole, Wyoming, has emerged as the implausible center for the most important debate in economics and politics today. For 35 years, world central bankers have met there in August to discuss strategies and methods. In the past, they have met alone. This year, their monopoly on ideas was challenged head on.
I saw it as I stepped off the plane into the airport in Jackson Hole. There were the greeters from the Federal Reserve, welcoming dignitaries and big shots. Close by, there were greeters for the people who invited me: sound-money advocates for free markets, many influenced by the supply-side school. Our group was made up of economists, journalists, historians, and other independent intellectuals.Then there was a third group made up of left-wing activists who want the power to print democratized — inflationists who see the Fed as their magical tool to bring about their dream of an egalitarian utopia.
The talks at our opposition conference were exceptional — the best two-day conference on gold and sound money I’ve attended. Speaker after speaker chronicled the problems with the Fed. The board of governors meets, and the whole world waits to see whether rates will go higher, lower, or stay the same.
Billions and trillions are held hostage to their whims, purportedly rooted in science but actually based on no more or less knowledge of the future than you and I have. It is incredible how much our economic structures have become dependent on the whims of this group of unelected monetary dictators. But their main dependent is actually government itself. The Fed stands ready to print all the money government needs in the event of any crisis. That promise itself has meant the elimination of all fiscal discipline.
Politicians talk and talk about restraint, about cutting the budget, about bringing revenue in line with spending. But as long as the Fed is there, it’s all talk. There is no need for authentic discipline. In a strange way, the Fed has usurped even the power of the president and the Congress.
How top US monetary economists have been unable to salvage the reputation of their central bank.
One can’t expect any reform either:
What reforms? At the conference I attended, there were many ideas, from gold-price rules to full privatization.
Solving the problem from the point of view of economics is not difficult: get rid of central banking.
The real problem is political: how do we get from here to there?
None of the existing presidential contenders are capable to forming two coherent sentences on the topic. In fact, they are more frightened by the subject of monetary policy than they are of the civil war in Iraq. And journalists don’t ask about the subject because their own economic ignorance exceeds even that of the candidates.
There was a time when economic development meant things like new products, technology etc. Now it has been just reduced to central banks and interest rates. This is how low things have become.