The Federal Reserve already has too much power over the economic lives of Americans, so of course the Left wants to give it even more.
On June 15, the U.S. House passed the “Federal Reserve Racial and Economic Equity Act.” It was a close vote of 215-207, so we’ll see if the Senate picks it up from here. But the fact this even passed shows just how much the Left wants to infect woke economics into everyday life.
The bill would require the Fed to “carry out its duties in a manner that supports the elimination of racial and ethnic disparities in employment, income, wealth, and access to affordable credit.” Never mind that the Federal Reserve’s narrow mandates, which Fed Chairman Jerome Powell reiterated over and over again during congressional testimony last week, are only 1) to seek maximum employment and 2) stable prices.
Tacking on a bunch of mandates for “equity” rather than equality of opportunity is a not-so-subtle push for socialism.
The Wall Street Journal points out the danger of mission creep: “Recall that Candidate Biden advocated making reducing racial disparities a third monetary mandate. You have to wonder if one reason the Fed was slow to tighten policy was because the central bankers agreed with him. Several Federal Open Market Committee (FOMC) members promoted the goal of ‘inclusive’ employment even as inflation began to creep up.”
Guess who gets hurt by the inflation the Fed failed to stop? Poor people, racial minorities and the elderly on fixed income.
This Fed mission creep is part of an ongoing pattern. I wrote for Forbes back in 2014 about the Obama-era moves along this same line: “Federal Reserve Chairwoman Janet Yellen’s unprecedented speech on income inequality harbingers worrisome policy prescriptions by a central bank created to serve limited functions. Her wide-ranging critique of America’s economic and education systems could well position her as the monetary equivalent of activist judges who legislate from the bench. This would be anathema to a system of limited government.”
The Left will relentlessly pursue its objectives: further government encroachment on your economic freedom. And while, yes, there are household wealth and income gaps seen among the races, free market capitalism is the most powerful engine for reducing poverty, both abroad and at home.
As I said in a podcast for Independent Women’s Forum, the Left is hoping to create a nationalized banking system. But no matter where it’s been tried, socialism has always failed. And so a nationalized banking system is going to fail.
The answer instead is financial literacy and teaching people economic empowerment through teaching and mandating testing around personal finance and economics, starting at the K-12 level. These days, we’d rather teach five-year-olds how to hate each other based on race instead of teaching the basics of understanding money and understanding savings — things that people can actually use.