photo by wallyg | via PhotoRee |
It is really quite interesting how the Federal Reserve ended up so squarely in the limelight in recent years. Sure, US Presidents, candidates, and other politicians have argued for and against national banks since the days of Andrew Jackson and Alexander Hamilton, but monetary policy has not been so close to the mainstream of political discourse in recent years as it is today.
Consider the Google Trends data for search queries, especially the frequency of news references to monetary policy.
Previously, the "Audit the Fed" and "Abolish the Fed" position was held by only a few including Ron Paul and documented in his book End the FedThe country during Fed Chairman Volcker's tenure was quite different from today, though the some would dispute this claim at least from the perspective of fundamentals. By 1981, annualized inflation reached 13.5% and an unemployment rate of 7.6%. The Volcker Fed's extremely hawkish policies would eventually manage to control inflation at the cost of letting unemployment peak at 9.7% in 1982 (oh for the halcyon days of the 1950s with ~3.0%?). In contrast, today we have a highly dovish Fed implementing Zero Interest Rate Policy (ZIRP) and a succession of quantitative easing programs.
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