Dante's Sixth Circle of Hell------The Fed Needs Heretics, Not PC "Diversity"

In what can only be a sign of the US and global economy stuck in Dante’s sixth circle of hell, US lawmakers and political figures took the time to write the Federal Reserve chastising it for not being “more diverse.” They, of course, meant physical diversity because surely there is no need for them to suggest anything other than orthodoxy of thought.

U.S. lawmakers including Senator Elizabeth Warren and Democratic presidential candidate Bernie Sanders on Thursday sent a letter to Federal Reserve Chair Janet Yellen urging more diversity at the U.S. central bank.

 

Ten of the Fed’s 12 regional bank presidents are men; 11 of them are white, the letter noted.

 

“Given the critical linkage between monetary policy and the experiences of hardworking Americans, the importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country cannot be understated,” said the letter, signed by 116 members of Congress and 11 Senators.

If there truly is a “critical linkage between monetary policy and the experiences of hardworking Americans” it should start with demanding that the very next appointment to the Fed takes the form of someone, anyone who doesn’t think QE worked or will at any point in the future. The criteria should instead focus on actual explanations for “stimulus” having no effect anywhere on the global economic account, because at present there isn’t a single member of the organization who thinks differently on the matter. There is uniformity in the organization, alright, in meaningful terms it has nothing to do with appearance.

Having read through far too many FOMC meeting transcripts, I can assure you there is no debate or so very little that it amounts to different ways to congratulate each other. The policy discussions are a mass of meaninglessness that could be distilled into less than ten minutes of actual conversation so much is just repeated. Even during the worst of times there was no actual, significant distinction of thought patterns, only minor quibbling of “how much” or “how long”; never a single utterance of “maybe we are all wrong.” 

Congress should be demanding that the Fed answer for why it did not heed its own warnings as I noted yesterday, why despite a great deal of internal uncertainty there was no investigation into the continued and increasingly troublesome monetary behavior of global banking. You might think, after all, an agency entrusted with the nation’s monetary affairs might expend all effort to all things monetary rather than just self-selected convenience. The next Fed appointee need never utter the words “global savings glut” for it is still dogmatic gospel inside the organization. There is no call for yet another member to ignore the eurodollar system.

It takes tremendous and obscene effort to so uniformly deny economic and financial reality for so long. Throw all the white Fed members out of office if it helps, so long as they are replaced by people who are effective, intellectually inquisitive, and most of all devoted to observable fact rather than orthodox economics. It should start with someone who is actually familiar with the economy rather than having run only regressions and statistics since their first day in college. The problem isn’t white so much as it is all the empty suits that are tailored from the same cloth.

Dante’ sixth circle of hell was reserved for the heretics. The next one appointed to “our” central bank will be the first and therefore most useful. Divine Comedy seems an appropriate title here.  

David Stockman's Contra Corner is the only place where mainstream delusions and cant about the Warfare State, the Bailout State, Bubble Finance and Beltway Banditry are ripped, refuted and rebuked. Subscribe now to receive David Stockman’s latest posts by email each day as well as his model portfolio, Lee Adler’s Daily Data Dive and David’s personally curated insights and analysis from leading contrarian thinkers.

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