Scott Garrett, the 5th District of New Jersey member of the House of Representatives (and locale of my home-sweet-home), was quick to let his opinions known of Janet Yellen, the likely new head of the Federal Reserve:
“For far too long the Federal Reserve’s reckless easy-money policy has supplied a constant sugar high to our capital markets. The Fed’s dangerous game of financial roulette has created unsustainable market bubbles, distorted the healthy function of our capital markets, and served to support the president’s reckless spending.”
An interesting choice of comments from a member of the House whose constituency largely consists of men and women who work in the financial district. What period of time is the House member referring to as having “reckless easy-money policy”?
The Fed is one of the great experiments in US history. Prior to the formation of the central bank in 1913, economic cycles were short in duration, with violent swings between growth and contraction. It was simply too hard for people to keep jobs and save for a large middle class to form.
After World War II, the US became the clear economic leader around the globe and introduced a stable currency to go along with an empowered Fed. The US economy – and those of many democratic countries – took off: the middle class exploded in size. Democracy and capitalism flourished.
During this time, economic expansions began lasting longer – four to five years in the 1950s and 60s, with the peaks and valleys becoming less extreme. By the 1980s and 90s, economic expansions lasted seven to eights years. The improvement in economic performance was greatly aided by the Fed.
The Fed is a great example of how educated people – with degrees from high school, college, masters programs and throw in Phds – lead to a nation doing better things.
Janet Yellen’s background exemplifies this pursuit of excellence to improve herself and her country. The knowledge she has gained from her hard work has allowed her to play an important role in our country’s success.
Should blame be placed on the Fed for reckless easy-money policy as the cause for the economic underperformance of the US economy? Please. Mr. Garrett take a good look in the mirror.
The Federal Reserve has been very active and responsive to the meltdown of the US and global financial market. Mr Garrett. Your response? A government shutdown, perhaps.
Follow