Many of us celebrate the first step to a return to sanity at the Fed – the introduction of the Federal Reserve Accountability and Transparency Act of 2014 (HR 5018).
We have a Rule of Law in this country - its origin to be traced to the Scottish enlightenment, especially the work of founder James Wilson. This Rule of Law is sacrosanct. We have also had from time to time a Rule of Monetary Policy Making in this country; however, this rule has been repeatedly ravished, violated. HR 5018 seeks to prevent such a repeat outrage.
All but the willfully blind now acknowledge that more predictable rules-based policy leads to better economic performance. See the recent works of Belongia, Ireland, Carlozzi, Taylor and so many others. John Taylor: “In one of his last research papers Milton Friedman argues that the Taylor rule ….worked well because it was a way to keep the growth rate of the money supply constant, another way to make the connection between money growth rules and interest rate rules.”
Naturally all do not agree because planners and activists - the self-anointed among us - have yet to be cleansed from the system. Fed chair Yellen is one of the anointed. That is why this week she went on record opposing HR 5018.
Instead, we expect the hearings on HR 5018 to expose the dangers of relying on Friedman’s “accidents of personality” and to ignite at least the pilot light, if not the main burners on the return voyage to sanity in central banking.
Robert Craven
We have a Rule of Law in this country - its origin to be traced to the Scottish enlightenment, especially the work of founder James Wilson. This Rule of Law is sacrosanct. We have also had from time to time a Rule of Monetary Policy Making in this country; however, this rule has been repeatedly ravished, violated. HR 5018 seeks to prevent such a repeat outrage.
All but the willfully blind now acknowledge that more predictable rules-based policy leads to better economic performance. See the recent works of Belongia, Ireland, Carlozzi, Taylor and so many others. John Taylor: “In one of his last research papers Milton Friedman argues that the Taylor rule ….worked well because it was a way to keep the growth rate of the money supply constant, another way to make the connection between money growth rules and interest rate rules.”
Naturally all do not agree because planners and activists - the self-anointed among us - have yet to be cleansed from the system. Fed chair Yellen is one of the anointed. That is why this week she went on record opposing HR 5018.
Instead, we expect the hearings on HR 5018 to expose the dangers of relying on Friedman’s “accidents of personality” and to ignite at least the pilot light, if not the main burners on the return voyage to sanity in central banking.
Robert Craven
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