Economists: End Or Drastically Downsize the Fed
by George Washington
Economics Professor and monetary expert Randall Wray told me thatwe should end the regional Federal Reserve banks, as they have such terrible conflicts of interest, strip out all regulatory power from the Fed (since it doesn’t believe ine regulation, anyway), and implement monetary policy with a very small staff. He is not opposed to moving operations over to Treasury and/or the FDIC.
Professor of economics Steve Keen told me that he would pretty much limit the Fed to being a clearing house between different banks. In other words, in his view, the Fed could be stripped of all of it’s regulatory, monetary and emergency bailout powers.
Economics professor Michael Hudson told me:
Before 1913 all the Fed’s operations were conducted quite well by the Treasury. (David McKinley’s book for the 1907 described this quite well a century ago.) the Fed’s aim was to Decentralize policy. The way things turned out, Wall Street leaders were given veto power. The role of Tim Geithner — in giving billions away in cash-for-trash trades the DAY before he was designed new Treasury Secretary (from his NY Fed position) tells it all.
But would the Treasury be different? The key is to put it back in the public interest, not Wall Street. Easier said than done.