Hillary Clinton today came out hard against Donald Trump’s attack on the Federal Reserve, where the real estate developer and Republican nominee for president accused the American central bank of creating a “false economy.” Mrs Clinton in responses chided Mr Trump for attempting to talk up or talk down the economy. Sorry Mrs Clinton, but as potential managers of America’s mixed economy, you are expected to comment on what Janet Yellen and company are doing over at the Federal Reserve.
Mrs Clinton should refresh herself with the Full Employment and Balanced Growth Act (15 U.S.C. 3101, et. al.). The Act, an amendment to the 1946 Employment Act, was passed in response to sluggish growth, high unemployment, and high interest rates of the 1970s. Section 3101(b)(2) of the Act noted that fiscal and monetary policies had failed to move the economy toward full employment, increase real income, or balance the federal budget. To To recalibrate the economy, the Act called on coordination between the President of the United States, Congress, and the Board of Governors of the Federal Reserve System. The very word “coordination” tells me that there is going to be some communicationg and opinion sharing between all three government entities if effective economic policy is going to be crafted.
Was Mr Trump wrong to do a little carnival barking at the Fed? Nope.