Author Archive: Glenn Reynolds

INSTITUTIONAL CORRUPTION: How the Fed Politicized Itself—and What a New Chair Can Do to Fix It. How did the Fed politicize itself? Gradually, then all at once.

In September 2022, about a year after Joseph Wang left his job at the Federal Reserve Bank of New York, he came across an odd new research paper from his former employer. Wang had been a senior trader on the Open Market Trading Desk, carrying out the Fed’s monetary policy. In his five years there, the usual Fed research covered
topics like inflation, labor markets, and bank capital. This paper, though, was titled “800,000 Years of Climate Risk.”

“I thought that was very strange,” Wang recalled. “The Fed writing about CO2 concentrations.”

Wang wasn’t the only one to notice what looked like mission creep at the Fed. Just before Thanksgiving in 2021, a tweet from the St. Louis Fed suggested replacing Thanksgiving turkey with “a soybean-based dinner.” The post drew thousands of replies, many of them demanding that the Fed get back in its lane.

Getting the Fed back in its lane is likely one of the toughest tasks ahead for Kevin Warsh, President Donald Trump’s nominee to lead the Fed. If confirmed, Warsh will command an institution that made itself a political
and ideological player during the tenure of outgoing chair Jerome Powell.

That shift matters because economists’ frequent defenses of the principle of Fed autonomy rely on the idea that its leaders are essentially technocrats. In practice, though, the Fed has moved well beyond that model, inserting itself into politically laden policy issues only tenuously connected, if at all, to its mandates of stable prices and low unemployment.

Indeed.

OPEN THREAD: Hump Day.

DON SURBER: Antifa, a wholly owned subsidiary of a billionaire: Bernie Sanders in 2019: “Billionaires should not exist.” “I am not surprised to learn the CCP—Red China—is behind this effort to stop the U.S. government from kicking illegal aliens out. After all, Tim Walz was its Manchurian vice presidential candidate, chosen by the Democrat Party because of his ability to milk social justice programs to fund Democrats. Come on. Do you really believe the DNC (Obama) would let a goofball like Kamala pick her running mate? They wouldn’t trust her to pick her nose. So just who is this Singham dude?”

LEFTISTS LIE BECAUSE THE TRUTH DOESN’T SUPPORT THEIR PROGRAM: Jonathan Turley: The Remaking of Alex Pretti. “MS NOW has admitted that it used an AI-enhanced photo of Pretti that made him look more handsome. Sen. Dick Durbin (D-Ill.) was criticized for bringing to the Senate floor an altered image, featuring a headless immigration agent, that made it look like officers executed a kneeling Pretti with a shot to the head. Pretti needs to be be inviolate to make the government seem vile in the eyes of the public. He is being described as the combination of Florence Nightingale and Crispus Attucks.”

He is being described falsely. He was a nasty, dangerous kook.

POOR NASA: