House Financial Services Committee recently held a hearing about how Federal Reserve policies since the 2008 financial crisis have affected the US economy and the American people. The hearing was quite noteworthy for its frank discussion about the negative impacts that Fed policy has had on many aspects of the economy and the agreement among all but one witness that the Fed’s policy has had serious unintended negative side effects and that the underlying mandates and theories governing the Fed are not in fact settled science. The video is long but we strongly encourage readers to give it a try. It is one of the more salient discussion of what is wrong with current economic thinking and central bank policy. Keep an ear open for topics we have discussed frequently here at The Sounding Line such as excess bank reserves, the interest on excess bank reserves, the Fed’s balance sheet, the Fed’s mandates, division of wealth, and much more.
The panel included from left to right Dr. Norbert Michel, Senior Research Fellow at The Heritage Foundation, Dr. Paul Kupiec, Resident Scholar at American Enterprise Institute, Dr. Karen Dynan, Nonresident Senior Fellow at Peterson Institute for International Economics, and Mr. Alex J. Pollock, Distinguished Senior Fellow at R Street Institute.