The Missing Fed

Photo credit: Kurtis Garbutt via Flickr (CC BY 2.0)

The Federal Reserve is the most powerful unelected financial powerhouse in the world. Its impact on our economy and financial markets is staggering.

Yet this unaccountable institution and its role in our economy and government is missing from the presidential debate.

One has to wonder what the presidential candidates are afraid of. Perhaps pollsters are telling them to stay away from this issue. Perhaps pollsters are telling them that it is over the heads of voters.

Voters may hear about nuclear centrifuges in Iran or even the complex science of global warning, but in the minds of political consultants, people’s money is something they can’t understand. But how does one explain this issue missing from the scripts of debate commentators? With the Fed in the financial news every day, how do they miss this?

Perhaps this will change in the CNBC debate on October 28.

Meanwhile, check out this fantastic highlight video from APIA’s Jackson Hole Summit last month, the first time conservatives have challenged the Fed toe-to-toe. And learn how important the Fed is in our lives!

Steve Lonegan is the Director of Monetary Policy for American Principles in Action. Continue Reading

WaPo: Conservatives Take on the Fed in Jackson Hole

The Marriner S. Eccles Federal Reserve Board Building (photo via Wikimedia Commons, CC BY-SA 3.0)

Today, The Washington Post reported on APP’s Jackson Hole Summit and the growing movement among conservatives concerned about the Fed’s monetary policy:

They converged last week on a red barn here in the shadows of the Grand Tetons, a small but passionate group of free-market thinkers and conservative activists hoping to convince the Republican Party that the Federal Reserve is ruining the economy.

That message is easily lost amid the latest Iowa poll numbers, the heated rhetoric over immigration and the megawatt personality of  billionaire presidential candidate Donald Trump. It has been six years since the end of the Great Recession, and the visceral outrage from the financial crisis that propelled former congressman and “End the Fed” author Ron Paul’s run for the White House has faded. No one is threatening — as then-Texas Gov. Rick Perry did in his last presidential bid — “ugly” treatment for the staid leader of the central bank. The economy in general, never mind the Fed, has taken a backseat in this election cycle.

But for the roughly 175 people at the Diamond Cross Ranch, the fight against the Fed has never been more timely: The era of easy money unleashed after the financial crisis appears to be coming to a close as the nation’s central bank prepares to raise its target interest rate for the first time in nearly a decade. It will be a moment of truth, conservatives here say, when the economy crumbles without the central bank’s support and the folly of the Fed’s policies will be revealed.

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Jackson Hole Summit Reveals Obliviousness of Fed

Federal Reserve Chair Janet Yellen (photo credit: International Monetary Fund via Flickr, CC BY-NC-ND 2.0)

Over at Forbes.com, Brian Domitrovic provides a solid rundown of last week’s Jackson Hole Summit, hosted by the American Principles Project.  Domitrovic argues that while the Fed’s concurrent conference remained mired in discussions of irrelevancies, APP’s summit featured true innovators whose ideas could have a significant impact:

Jackson Hole was particularly weird for the Fed this year: it gave the impression that the institution is oblivious.

It was also different at Jackson Hole this year because the Fed had company. There was a shadow conference hosted by the American Principles Project and run by Steve Lonegan, the man who in February had scored the conservative critics’ meeting with Fed Chair Janet Yellen.

At the shadow event (where I was a discussant), there was no talk of inflation dynamics, no concentration on tangents. George Gilder spoke of how information theory verifies that gold, and possibly bitcoin, functions as money better than all other comers. Judy Shelton and Benn Steil debated the wisdom of Shelton’s proposal for gold-backed bonds issued by the Treasury. Mark Calabria revealed the complicity of the New York Fed in helping the big institutions load up on sub-prime assets before the implosion of 2008. The panel on digital currencies told us how that innovation can supplant banks, central and otherwise. Rich Lowrie proved that the Fed suppresses wage growth in the name of inflation-fighting. British MP’s Kwasi Kwarteng and Steve Baker and U.S.

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Five Things Jim DeMint Taught Us At Jackson Hole

Senator Jim DeMint, President of the Heritage Foundation, gave the keynote speech on the second day of APIA’s Jackson Hole Summit Friday. DeMint covered a lot of ground, talking about the damaging effects of bad money and giving a passionate argument in favor of monetary reform. Here are just a few of the points DeMint covered about the battle for equitable prosperity:

1. “When I was a teenager nearly fifty years ago, I valued money based on the things that were important to me. For me, one dollar equaled three beers and a Slim Jim. …Today, however, one dollar will not buy one good IPA, and that has a great deal to do with our monetary policy.”

The devaluation of the dollar has been one of the most visible effects of our lawless monetary policy, and DeMint nails it on the head. Even worse, of course, is that a devalued dollar is considered a healthy thing (to the point that the Federal Reserve deliberately targets it). Too bad Americans’ wages aren’t growing while this goes on…

2. “We all know that there is something seriously wrong when trillions of new dollars are created out of thin air to bail out big banks, stimulate the economy and buy government debt. And something is dangerously wrong when the political and media class are even afraid to discuss it.”

This cuts right to the heart of why the Federal Reserve has been given free rein to abandon the rules that defined it in the past. Continue Reading

Wake Up, Conservatives!

Several ThePulse2016 contributors, including Steve Lonegan, Ralph Benko, Frank Cannon, Terry Schilling, Shane Vander Hart, and others, have flown out to Jackson Hole, Wyoming, for a historic monetary policy conference organized by the American Principles Project.There are three major conferences taking place in Jackson Hole, Wyoming this week, and they all focus on the same issue: monetary policy.The Federal Reserve is having their annual symposium. Fed Up, a left-wing organization, is holding a counter-conference demanding that the Fed keep interest rates low, print more money, and bail out states and municipalities that are deep in debt.

And, of course, the American Principles Project is holding the Jackson Hole Summit this week, where leading economists and center-right leaders will analyze recent actions taken by the Federal Reserve, challenge prevailing economic wisdom, and discuss alternative options to discretionary monetary policy.

When I was at the beautiful Jackson Hole airport yesterday, I couldn’t help but be amazed by the number of left-wing activists pouring through the airport attending the Fed Up conference. They’re organized. They’re sophisticated. They’re engaged on monetary policy.

Where is the right? Our side is asleep at the wheel. If our Jackson Hole Summit wasn’t taking place, there would be no one to counter the far left’s extremely dangerous message.

The Jackson Hole Summit is bringing together some of the brightest minds in economics from around the world. All of us have the same determination — establishing sound monetary policy that serves people, not special interests.

Stay tuned to ThePulse2016 for more coverage from this historic conference.

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Fed Decision-Making Plagued by Paralysis and Inaction

Federal Reserve Chair Janet Yellen (photo credit: Day Donaldson via Flickr, CC BY 2.0)

Yesterday’s Fed statement is reminiscent of Goldilocks and the Three Bears. The first porridge was too hot, the second too cold. Where was the one that was just right?

The Federal Reserve has a similar quandary. It is trying to keep both inflation and unemployment low. But alas, inflation is too low and unemployment is too high. What should it do? Today the Fed answered by prolonging the paralysis and inaction.

This dilemma is called ‘discretionary policy.’ It has governed monetary policy for the last 40 years, yet it provides no clear direction to Fed policymakers. There must be a better system. It should be adopted soon. We must FIX THE DOLLAR.

For the first time next month, a team of leading economists and elected officials from around the world will gather in Jackson Hole, Wyoming, to analyze and challenge Fed policies. No porridge will be served.

Steve Lonegan is the Director of Monetary Policy for American Principles in Action. Continue Reading