News Audit the Fed: Good or Bad Idea?

[mheslep]

<<The Fed was created mainly to set monetary policy and provide financial stability. They have stepped far beyond that role now into fiscal policy and, arguably, social policy by way of mortgage rebates, buying up debt and the like.>>

The intent was always that they would buy debt. Indeed, when you hear that they are loweing the Fed Funds rate target, they are actually buying debt to skew the market.

Yes, but bank debt over is the traditional way the Fed pushes money into economy (or draws it down), not US government debt and mortgages.

Perhaps though you can argue that mortgages are a social form of debt. But on the other hand, the goal of buying up mortgages really does fall into the category of attempting to achieve fiscal stability.

Sure, and social policy, a step too far.

But why would Ron Paul need to go auditing the Fed to find these things out? If they have been buying motgages, is it a secret? What does he expect to find?

I should point out that I actually do not think there should be a federal Reserve. But even though Ron Paul and I actually agree on that, his views are strange conspiratorial views.

I agree w/ your criticism of Paul the elder. Like many cranks, he has latched on to a valid but complex idea and attached to it the baggage of naivety and conspiracy.

P.S. I note your link to John Cochrane's article. JC and I lived in the same dormatory many years ago back when we were undergrads at MIT. He is now in finance, but actually was a physics major back then.

Yes I was aware of Cochrane's science background and as an engineer myself I'm all the more interested in his views.

 

[ApplePion]

<<Yes I was aware of Cochrane's science background and as an engineer myself I'm all the more interested in his views.>>

Apparently JC has gone off the deep end--he is affiliated with the Cato Institute. Back at MIT he was actually very liberal and I was very conservative, and we had some political discussions.

But the problem with Cato is not that they are conservative. It is that they are dishonest and irrational.

 

[mheslep]

<<Yes I was aware of Cochrane's science background and as an engineer myself I'm all the more interested in his views.>>

Apparently JC has gone off the deep end--he is affiliated with the Cato Institute. Back at MIT he was actually very liberal and I was very conservative, and we had some political discussions.

But the problem with Cato is not that they are conservative. It is that they are dishonest and irrational.

That sounds ridiculous. Cochrane has a large body of scholarship to his name and continues to publish, but you state here he as gone 'off the deep end' not because of anything he's said or written but because of someone with whom he's affiliated? BTW Cato has a libertarian viewpoint, not conservative.

 

[ApplePion]

<<That sounds ridiculous. Cochrane has a large body of scholarship to his name and continues to publish, but you state here he as gone 'off the deep end' not because of anything he's said or written but because of someone with whom he's affiliated?>>

Yes, I do think that who someone choses to affiliate themselves with is reflective of them. If someone chose to be an official economist for the American Nazi Party, would that not make such a person suspect to you? Yes, I realize that the Cato Institute is not nearly as bad as the Nazi Party, but my point was qualitative.

The Cato Institute really does lie a lot--as a person with a science background you should know that, and they try to distort reality to always fit their ideological prejudices.

<<BTW Cato has a libertarian viewpoint, not conservative.>>

That's true, but nevertheless his views when he was a liberal would still be quite different from libertarian views. It was so long ago that it is a bit difficult to remember, but I still am pretty sure he strongly favored redistribution of wealth.