If We Ran the Fed

Andy Snyder|December 15, 2021

Jay Powell and his cadre of bozos are meeting in Washington this week.

They’re unelected… largely unqualified… and wholly unaccountable.

And yet your money doesn’t care. It’ll rise and fall in value based on their whims and their latest political musings.

We awoke this morning thinking about the big meeting. Then we laid our head back, stared at the ceiling and started the day with a bit of daydreaming.

What if we were in charge?

What if the phone rang and a stuttering, tired voice was on the other end?

“Andy,” he’d mumble, “it’s Joe. This Jay fella doesn’t know whether he’s coming or going. I need you to take over the Fed.”

Oh boy… we’d call our first press conference in our pajamas. It wouldn’t be pretty.

“Get ready for some big change,” we’d tell the bleary-eyed world.

Bring in the Clowns

Now, to be fair, they don’t put us in charge of much these days. When they do, somebody gets insulted, somebody else up and quits, and a lawyer usually ends up with a shiny new boat.

But hey… this is Washington we’re talking about.

They deserve to get insulted. They should quit. And we’d be delighted to do our part in getting all the lawyers to sail away.

So what would be on our agenda if we were the head of the Fed?

Well, this interest rate charade would be the first thing to go.

Everybody says Powell is in a trap. If he doesn’t raise rates, inflation will take hold. But if he raises rates, the economy will sink.

They’re right.

It’s quite a trap. So I suppose it’s time for somebody to start gnawing on their leg… before the trapper comes with his gun.

None of these boys have the guts.

We’re in trouble one way or another. Unless this mess gets back to some sort of normal, healthy free market, it’s going to die. It’ll happen on either this guy’s watch… or the next guy’s.

We all know which way the man in office is kicking the old, rusted can.

But remember, we didn’t earn our spot at the Fed and don’t deserve to be there. There’s no chance or desire for a second term. We’ll happily hit the reset button.

The first thing we’d do is call the hens home to roost and raise the overnight rate to 4%.

Oh boy…

Stocks would crash. Speculators would get crushed. And they’d be burning bald, big-nosed effigies up and down Main Street America.

But the madness would be over. The healing could start.

Return to Normal

Ordinary folks could once again save for retirement through conservative, reliable means. No more wild speculation with the riches going to the lucky folks on the fringes.

Investors could once again look at a balance sheet and see its obvious ties to a company’s valuation. There’d be no more interest-free shenanigans. No more debt paying for things debt shouldn’t buy.

Oh… and here’s the part that would surely put some poison in our coffee. The government would no longer be able to borrow at will. Because it would actually have to pay its lenders for their money, Washington’s debt would become a burden instead of a campaign finance tool.

The incumbents and wannabes could no longer borrow and spend their way toward popularity.

They’d have to make promises that are actually worth their costs to future generations.

What a land it would be!

These days, it’s only a dreamland.

NSFW: Not Safe for Workers

Next up, we’d drop the silly notion of the Fed’s dual mandate. No agency can be in charge of a nation’s money and its jobs.

Like a north wind hates a south wind, the two are mortal enemies. Trying to balance them only creates hurricanes.

Let the Fed worry about what it can print and destroy – money.

It can’t create jobs. Only the free market can.

Let it.

The smaller the Fed’s role… the better we’ll all be.

But alas, we’re only daydreaming.

Our phone isn’t ringing. We’re not even sure where we put it.

The folks in charge will remain in charge. They’ll do what’s right for today, with no mind for somebody else’s tomorrow.

The pain will come. It must. For once we stick our paw in the trap in hopes of an easy treat, there’s only one way out alive.

It’s time to start gnawing.

We think we hear the trapper pushing through the brush.