Everyone should start to wonder how the Fed and US Congress make decisions. CNBC wrote an article about the various blunders of our planners called: Fed influence, shaky forecasts, delayed decisions: How the Biden administration misread the inflation threat, illustrating some of the problems faced in our anti-capitalist society.
One of the problems begins with finding the right expert. Biden showed us his thought process when he nominated Yellen as head of Treasury, because he felt:
No one is better prepared to deal with this crisis.
Of course, the statement is hollow, a platitude at best. But Yellen only had to get confirmed by the Senate, so public opinion or whether she understood the free market played little into her hiring decision. Naturally, many similar experts were hired to fulfill the central planning function. As explained:
The administration had a simple plan, and Yellen would help carry it out. Once hundreds of millions of Americans were vaccinated against Covid-19, and trillions of dollars in new government spending flowed into the economy, the world would return to normal under a supercharged recovery.
The problem with simple plans by the government is that they’re never all that simple. If the plan was to vaccinate hundreds of millions of Americans and inject trillions of dollars into the economy, then the plan worked marvelously. This is great for the planners, but not so great for those who wanted nothing to do with the plan.
Nonetheless, the plan took effect. There was the Whitehouse, US Congress, Federal Reserve, and the lesser known, but nefarious sounding:
…“troika” of the Council of Economic Advisers, Treasury and the Office of Management and Budget.
Countless other alphabet soup agencies, cooperation of academics, the media, all worked diligently to adhere to the simple plan, including forced lockdowns. It’s now 2022. The US Debt has surpassed $30 trillion. There looks to be no known way to eradicate COVID, except now:
Indeed, the consumer price index report for December showed that inflation grew at an annual rate of 7%, the hottest pace since 1982.
To no surprise to anyone outside of the planning process, when you shut down a country and increase the money supply by several trillions of dollars, prices tend to increase. Even worse:
White House officials acknowledged the possibility of inflation wrought by stimulus and infrastructure spending, but the risk was dismissed by officials citing the political popularity of the policies and the desire to add more fuel to the economic recovery…
If it wasn’t apparent in 2020, it should be apparent now: The Federal Reserve and US Government’s intervention in the market is the mistake. It’s not that the Fed or Congress could intervene the right way, or that a certain amount of intervention could be for the better. Rather, it’s the very act of market intervention that ensures negative outcomes for the country. The more they intervene, the worse things become.
Between all levels of government, the supposedly independent Fed, and all those employed by these planning departments, it seems not even the smallest consideration was given to world or economic history, the sense of liberty and freedom America was founded upon, or any desire to understand Austrian economics.
At this point in time the general public has little to do except watch the government try to dig itself out of a hole, using the same methods that made the hole in the first place. As for the Fed’s promise to tighten this year, we’ve seen this before, and everyone except those at the Fed already knows how it will play out.
