Those are the words with which the economist Judy Shelton wrapped up her remarks at Jackson Hole, and let us just say, Patsy Cline herself couldn’t have put it better. Ms. Shelton’s remarks were, our sources report, one, if only one, highlight of the counter-conference that the American Principles Project convened to put into sharp relief the question of whether the Federal Reserve and America’s regime of fiat money are the cause of our national travail during what has come to be called the Great Recession.
What happened at Jackson Hole marks an important moment. For more than 30 years, the Fed has been meeting there annually for a symposium that routinely took place with hardly a peep from the public. This year its arriving delegates were met by representatives of two counter-conferences. One, called Fed Up, was a gathering of Marxists and other left-of-center figures who want to make money (even) easier than it’s been. They reckon that the failure of zero interest rates to create jobs will be rectified by even more easy fiat money...... (But).... the group asking the new and hard questions was the American Principles Project. It mounted a counter-conference that viewed the monetary question through free-market, constitutionalist principles, like those Ms. Shelton sketched above....
Both the Senate and House committees that oversee the Fed are now taking an look at strategic monetary questions. Their review includes what kind of oversight to give our central bank, what kind of mandates it should have, what rules ought to govern its formation of monetary policy. The House has already twice passed Audit the Fed, the second time but a year ago and by a vote of 333 to 92. This effort has been resisted by the Federal Reserve, and public counter-conferences are inevitable.
Call it a case of the public offering its own forward guidance. Both sides of the debate see a Federal Reserve that has lost touch not only with Congress but with the public. They see a Federal Reserve that is guiding the economy through the exercise of the judgment of Ph.D.s, as James Grant of the Interest Rate Observer often notes. The American Founders would have understood the error of the Ph.D. standard. They gave us a Constitution that granted to Congress monetary powers that our Revolution had wrested from George III, who really was — not to put too fine a point on it — crazy.