“Woke” seems like too nice a term for people who casually toss around vicious smears against the United States. Particularly galling is when rhetorical attacks on U.S. liberty come from tax-consuming officials at the most dubious arms of the federal government. Did the Federal Reserve recently publish one such attack?
The Fed’s recent tolerance of inflation in our nation’s currency is disturbing enough. But however misguided the Fed’s monetary policies and bank supervision may be, one hopes that Fed officials are at least attempting to preserve our nation and the vibrant free economy that made the U.S. the most prosperous nation on earth.
Now along comes a research paper from a Fed economist that is ostensibly a challenge to conventional views on inflation expectations. The Fed’s Jeremy Rudd states his claim:
Economists and economic policymakers believe that households’ and firms’ expectations of future inflation are a key determinant of actual inflation. A review of the relevant theoretical and empirical literature suggests that this belief rests on extremely shaky foundations, and a case is made that adhering to it uncritically could easily lead to serious policy errors.
No doubt many readers will be skeptical of Mr. Rudd’s argument but this is not the most disturbing part. Nor is it out of bounds for the provocative Mr. Rudd to write:
Mainstream economics is replete with ideas that “everyone knows” to be true, but that are actually arrant nonsense… No doubt, one reason why this situation arises is because the economy is a complicated system that is inherently difficult to understand… Is this state of affairs ever harmful or dangerous? One natural source of concern is if dubious but widely held ideas serve as the basis for consequential policy decisions.
The truly remarkable message arrives in a footnote that appears right after the passage quoted above. The footnote reads:
I leave aside the deeper concern that the primary role of mainstream economics in our society is to provide an apologetics for a criminally oppressive, unsustainable, and unjust social order.
At a threshold level, is this really economics research or do we have here another case of a Fed official using the institution to advance a political agenda?
Of course the message in this Fed paper also raises a much more significant question: Are we entrusting the preservation of our currency—a bedrock of our society—to people who don’t want to preserve our society?
Let’s try to give the Fed’s Mr. Rudd every benefit of the doubt, understanding that he presents himself as a challenger of conventional wisdom in the economics profession. Is it possible that when he describes “a criminally oppressive, unsustainable, and unjust social order,” he is referring to the command economies favored by so many academic economists and Bernie Sanders?
Mr. Rudd doesn’t seem eager to explain. Via email this column asked him what he meant by “a criminally oppressive, unsustainable, and unjust social order.” Mr. Rudd promptly responded:
Dear Mr. Freeman:
My understanding is that any press contacts need to go through our Public Affairs office. A good person to talk to there would be Joe Pavel (cc’d on this reply).
Your humble correspondent then asked the Fed’s Mr. Pavel if he knew what Mr. Rudd was referring to. Mr. Pavel responded via email:
I’ve checked in with Jeremy, and unfortunately, I don’t have anything additional to offer.
I’m sure you have seen it, but I would point you to the disclaimer at the beginning of the paper, which appears at the beginning of all the working papers published on the Fed’s website:
Disclaimer: The economic research that is linked from this page represents the views of the authors and does not indicate concurrence either by other members of the Board’s staff or by the Board of Governors. The economic research and their conclusions are often preliminary and are circulated to stimulate discussion and critical comment.
After this preliminary research, let’s hope the Fed staff decides that it can tolerate America.
What makes this episode especially troubling is that anyone who has worked in a government agency knows that it is highly unlikely that any document, including an individual employee’s research, would go out the door for public release without a vetting process involving other staff. Does anyone at the Fed find it objectionable, or at least worthy of an explanation, when a paper about the economy refers to “a criminally oppressive, unsustainable, and unjust social order”?
This column is hoping for—but not expecting—an explanation. From its very beginnings more than a century ago, the Fed has been perhaps the least transparent of Washington creations. The original plan for the Fed was drafted by a small group of financial titans and government officials meeting in secret while pretending to be on a duck-hunting trip off the coast of Georgia.
A few years ago your humble correspondent co-authored a book with former banking regulator Vern McKinley and learned that the Fed has a process for avoiding disclosure of documents before ultimately destroying them, ensuring that its failures in overseeing large banks will never be fully understood.
But today we have the case of a research document that the Fed has already made public. Will it not explain what appears to be a shameful swipe at the country it is supposed to serve?
James Freeman is the co-author of “The Cost: Trump, China and American Revival.”
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