Beware a magnanimous Fed
Across the globe, central banks are highlighting growing trends in income inequality and suggesting that it is their responsibility to help close the gap. At a recent conference at the Federal Reserve Bank of Boston, Janet Yellen, Chair of the Federal Reserve, questioned whether income inequality “is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.”
In a piece released today on The Hill, Sound Money Project Co-Director Judy Shelton responded by noting that it is, in fact, the Fed’s fault that the income inequality gap is growing. Dr. Shelton goes so far as to point out that the most severely negative trends in income and wealth distribution coincide with “the continuation of the Fed’s quantitative easing policies, which provide money at near-zero interest rates to the largest financial institutions through large-scale asset purchases.”
Dr. Shelton notes that Yellen’s growing public concern over the issue of inequality is dangerous because it implies an intention to try and fix the problem. The road to hell is indeed paved with good intentions. She goes on to state that, “if Yellen wants to restore the free-market values rooted in our nation’s history, she needs to pay heed to the telling correlation between wealth inequality… and the creation of the Federal Reserve in 1913.”
To read Dr. Shelton’s piece in its entirety, click here.
