The Washington Post reported on the Democratic candidates’ proposals for changing the Federal Reserve. Clinton has recently announced “that the Fed needs to be more representative of America as a whole and that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue.” In a letter to Janet Yellen, the current Fed chairwoman, Sanders has made similar statements with other lawmakers (as quoted in the Washington Post article):
“Given the critical linkage between monetary policy and the experiences of hardworking Americans, the importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country, cannot be understated,” the letter states. “When the voices of women, African-Americans, Latinos, and representatives of consumers and labor are excluded from key discussions, their interests are too often neglected.”
Unfortunately, changing the demographic makeup of central bank officials in an effort to raise the incomes of particular demographic groups is tantamount to slapping a food label on a box of rat poison in an effort to make it safe to consume.
It should be obvious that the consequences of credit expansion are wholly independent of who pulls the lever, so this emphasis on diversity at the Fed is misplaced — especially since the Fed generates and exacerbates the very same income and wealth inequality the progressive Left purports to despise.
Of course, their push for diversity at the Fed is coupled with a push for protracted low interest rate policy: “They also urged the central bank to consider the high unemployment rate among some racial groups as it debates whether to keep pulling back its support for the American economy.” Now even the weak, compromised calls for a return to “normal” (but still artificial) interest rates and saner (but still centrally planned) monetary policy can be labeled anti-diversity or racist. The PC narrative will further marginalize, radicalize, and demonize the sanest positions like ending the Fed, removing government interventions, and allowing unhampered markets to flourish.
The irony is that these positions are markedly pro-social cooperation, pro-prosperity, and against inequality produced by artificial booms and busts, Cantillon effects, and government intervention. Yet in the current mainstream established arena for discourse, where everything seems to be its opposite, these “extreme” positions aren’t even vilified as much anymore, but are increasingly out-of-bounds and ignored entirely. The debate is moving away from whether or not we should have central banks (to the extent that this was ever up for debate), and toward which demographic groups should have the honor of wreaking havoc on our economy by manipulating credit markets.
