National Economy Run by an Unelected Committee?

What kind of democracy is supposed to have a national economy completely at the mercy of an unelected committee?


Last night, this story at was featured in the Drudge Report, under the headline “Confusion,” with a pretty unflattering picture of Janet Yellen looking quite confused.

The Federal Reserve opened the door to an interest-rate increase as soon as June, while also indicating it will go slow once it gets started.

The new signals were contained in a policy statement that ended an era by dropping an assurance that the Fed will be “patient” in raising rates, and in a fresh set of estimates that lowered the median for the federal funds rate the end of 2015 to 0.625 percent compared with 1.125 percent in December.

Just because we removed the word patient from the statement doesn’t mean we are going to be impatient,” Chair Janet Yellen said in a press conference Wednesday in Washington.

The Federal Open Market Committee said it will be appropriate to tighten “when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”

“An increase in the target range for the federal funds rate remains unlikely at the April” meeting, it said in its statement.

It is embarrassing to see a nation made up of allegedly mature adults wet their pants trying to parse the meaning of the absence of a single word in a document.

Why can’t the Bloomberg story state the obvious truth? No one knows what the Federal Reserve is going to do because the Federal Reserve decision-makers have no idea what they are doing. They are making it up as they go along. The purpose of these statements that they release to the public is not dependent on future plans on the part of anyone at the Federal Reserve. Their purpose is to manipulate the public in the hope that somehow the economy will improve and the Federal Reserve can take credit for it.

While Fed officials lowered their estimate for the federal funds rate at the end of 2015, they said in their statement that “this change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range.”

Dropping the pledge to be “patient” marks a shift away from the explicit guidance on the future path of policy that the Fed has used since late 2008 to keep longer-term borrowing costs low. The Fed will now set policy at each meeting based on the latest economic data, making its actions less predictable.

But as Janet Yellen herself points out, dropping the “patient” pledge communicates nothing at all. It doesn’t mean they will be impatient. Yet this, according to the Bloomberg story, this mere word drop, “ended an era.”

We pretend we are so much more advanced than past societies based on priests and magic, but we are no different. The parsing of Federal Reserve statements is what used to be done by “reading” the entrails of a slaughtered beast.

[See also, “Is It Wrong to Want to Audit the Fed?]

And who are the “officials” giving this “guidance”? Who elected them? Who gave them the authority to disrupt—oh, sorry, “guide”—the entire national economy? Where in the Constitution is the government office defined that allows them to do this to us?

The entire Federal Reserve system is nothing but an unconstitutional banker dictatorship foisted over the Federal Government.

Don’t audit it; end it.