The Clueless Fed

Powell and his lieutenants share blame for the Biden economic crisis.

Screen Grab: Bloomberg TV

Americans suffering the ravages of an economy in recession with the added hardship of record inflation naturally deploy most of the political anger toward Joe Biden for his disastrous policy failures. This derision is both understandable and well-deserved.

But many citizens probably fail to ascertain the full scope of the Federal Reserve Bank’s complicity in creating this recession/inflation quagmire. Over the weekend, the president of the Atlanta Fed, Raphael Bostic, provided a reminder about just how out of touch he and other Fed chieftains remain – how aloof they stand from the economic calamity they create.

Bostic appeared on Face the Nation on CBS and told America: “I do think that we’re going to do all that we can at the Federal Reserve to avoid deep, deep pain.” So, this top Fed official, with his sterling economist credentials “thinks” that we can avoid “deep, deep pain”? Wow, what a relief!

Not.

Bostic continued: “there is a really good chance that if we have job losses it will be smaller than what we’ve seen in other situations.” Of course, Dr. Bostic proffered no reason -- no data nor evidence -- to bolster his hopium.

Here’s the harsh economic reality: Bostic and his pals at the top of the Fed spent most of 2021 completely misleading the American people about growing, systemic inflation as being “transitory.” In fact, Fed Chairman Jerome Powell was ever-ready to join in with his Fed predecessor, Treasury Secretary Janet Yellen, in parroting that fanciful propaganda buzzword to the American people.

Powell abused the credibility that the Fed had earned in prior decades. He also  further eroded Americans’ trust in once-august institutions. Like so many top organizations of Washington, the Fed now exists principally to further its own institutional power, and not to enhance the prosperity and security of American families.

In this regard, no wonder a corrupted institution like the Fed increasingly puts someone like Raphael Bostic on public display as a media mouthpiece. Bostic boasts a perfect resume for the Fed’s preferences, coming from the world of elite academia. Unfortunately, he also fully backs the increasing liberal mission creep of the Fed into social issues from a radical viewpoint. For example, Raphael Bostic penned a 2020 essay about “A Moral and Economic Imperative To End Racism.”

In that article, he cited George Floyd and Breonna Taylor. Apparently, Bostic cannot see the paradox of his own claims of structural racism. Would a bigoted society ever allow a gay black man like Bostic to graduate from Harvard and Stanford, earn a distinguished professorship at the University of Southern California, and then become CEO of the Federal Reserve…in the Southeastern US?

Did Bostic’s focus on leftist narrative rather than economic reality blind him to the inflation which grew like a financial cancer during all of 2021? Perhaps.

Whatever the reason, by his own admission, in a Bloomberg News interview just weeks ago, Bostic claimed that "inflation is extremely high...the levels we're at were unimaginable 18 months ago."

“Unimaginable.” Really?

Memo to Dr. Bostic, the Fed president with a Stanford doctorate: the signs were everywhere! All relevant indicators pointed directly at the looming inflationary hurricane, at least for those who cared to look. Biden’s total assault on American energy combined with an exorbitant binge of borrowing and spending to thrust America headfirst into an inflationary quagmire, and it was quite obvious, at least to honest students of history and data.

In fact, precisely 18 months ago in February of 2021, I appeared on War Room with Steve Bannon to warn exactly about this looming crisis. Former senior White House chief strategist Bannon and I described the risks of stagflation, the rare and miserable combination of slow/no growth alongside surging inflation. I continued warning about this then-nascent stagflation crisis throughout early 2021, in my videos, "chalk talks," and  writing.

I provide these receipts not for self-congratulation, but rather to highlight the abject failure of the supposed “experts” of the permanent political class to properly execute the foundational tasks entrusted to them.

Given this track record, why would trust the Fed now? Why would we listen to Bostic?

Here’s the reality of the present imbroglio: because of the Fed’s past inattention to inflation and its subservience to the Biden agenda, it now must tighten dramatically into the teeth of decelerating economy. It’s a worst of all worlds economic storm – and the Fed shares a big part of the blame.