The promise and peril of new technology
The Federal Reserve’s expansion into credit allocation during the COVID-19 pandemic will be difficult to roll back. Jim Dorn comments.
The much‐enlarged role of government in modern monetary systems makes it especially difficult to “inquire what would result” were the government to cease playing any role.
The country is still firmly in the grip of hyperinflation, with an annual inflation rate of 2,436 percent by my measure.
In the absence of a monetary rule, a central bank is vulnerable to politicization. In the case of the United States, Congress delegated monetary authority to the Federal Reserve in 1913 and has increased the scope of that authority over time, especially following crises. However, Congress has never enacted an explicit rule to guide Fed policy, and it has used the Fed as a scapegoat when things go awry.