To whom great independence is granted, an extreme level of accountability and responsibility is required. The Federal Reserve Board (Board) and the Federal Open Market Committee (FOMC) has failed miserably with managing its service to citizens. Reform of the Board is needed immediately; FOMC transcripts must be released much earlier than five years.
The Board is an opaque, insular federal agency. The constant calls for “independence” and for secrecy of FOMC meetings make me suspicious.
Author’s note: I have covered other aspects of the Board’s inhuman spirit and cruelty in other posts–for example, the now-closed case of Artis v. Greenspan Bernanke Yellen. That this attitude would spill over into its policy work (or inform of its treatment of certain employees at the Board) is thus not surprising, but, at the same time, it is deeply hurtful.
In addition, the revelation that economists are indifferent to human beings serves as a confirmation point for previous posts.
Rightly so, it seems. An article by Matthew Stoller of the Intercept, demonstrating the utter lack of conscience against vulnerable citizens–those suffering unemployment as a result of the Great Recession–shows the corrosive effect of extreme secrecy and a total lack of accountability at the high levels of the Board and the FOMC. The reform proposals being considered must be given immediate attention.
[The current chair of the Board, Janet Yellen, was at the FOMC meetings mentioned in Stoller’s article.]
Only the comfortable can afford to laugh at those who suffered financial stress. The following quote comes from transcripts of the Nov. 1-2, 2011, FOMC meeting. That the laughter and joy at other people’s suffering comes from high-level public-service policymakers is galling.
“I frequently hear of jobs going unfilled because a large number of applicants have difficulty passing basic requirements like drug tests or simply demonstrating the requisite work ethic,” said Dennis Lockhart, a former Citibank executive who ran the Atlanta Federal Reserve Bank. “One contact in the staffing industry told us that during their pretesting process, a majority—actually, 60 percent of applicants—failed to answer ‘0’ to the question of how many days a week it’s acceptable to miss work.”
The room of central bankers then broke into laughter.”
At an April 2011 FOMC meeting, the president of the Richmond Federal Reserve Bank, Jeff Lacker, had the following to say about vulnerable people in West Virginia–within his own jurisdiction–at least he tried to stifle the laughs (although his statements were similarly shallow, and lacked depth–he did not go the unemployment office to speak with the unemployed directly (!)):
In an April meeting that year, Richmond Federal Reserve President Jeff Lacker told participants that “Several firms told us of difficulty finding adequate workers, because they preferred to collect unemployment benefits or can’t pass drug tests.” He reiterated that point in November, saying that in West Virginia he was told by an employment agency that “unquestionably the biggest problem in hiring skilled and unskilled workers was the inability to pass a drug test.”
Lacker’s Federal Reserve district includes West Virginia. In August, he again spoke of “widespread reports about hard drug use, OxyContin and methamphetamine, in Appalachia and other rural parts of our District—in particular, Appalachia.”
Apparently his colleagues responded with laughter again, because he then said “Drug abuse and the hardship involved in unemployment aren’t really laughing matters.” Usage, he noted, isn’t higher than the national norm in West Virginia. “It’s hard to pin this down quantitatively,” he continued, wondering if there was “something meaningful there as a contributor to impediments to labor market functioning.”