Monday, December 11, 2017
 
Expanded Role of Central Bank Becoming a Problem for Washington’s Political Class

WASHINGTON, D.C. Mar. 29 (DPI) – For eight years now America’s central bank has gifted Wall Street and the banking sector a near-zero cost of money, an unprecedented policy that’s generated billions for speculators – but has been a mixed blessing for everyday working people, economists say.

Despite the stimulative efforts of the Federal Reserve, and its objective of spurring job creation and economic growth, there’s been a cost to the nation in the Fed’s expanded role – there simply is less risk-taking at all levels, for starters, economists say.  Business creation has declined sharply, and businesses of all sizes have cut investment – both of which are key measures of confidence in the future. Such data suggest flagging energy and initiative of entrepreneurs and managers, people who once by nature were optimistic about their possibilities.

Not surprisingly, then, the American electorate may be beginning to realize that the Federal Reserve’s expanded role is a long-term problem. And there’s little indication that the Fed will ever vacate its new position as the U.S.’s Central Planner – the institution, once inclined to nonintervention, now has an interest in constantly prodding a tepid economy with policies that make itself and the politicians look effective, involved – and in control. Politicians of both establishment parties love that role as well.

Just today, after months of telling Wall Street that a “normalization”  to higher interest rates was likely, Fed Chairwoman Janet Yellen gave a speech indicating rate hikes were less likely. The markets naturally rallied, reinforcing – for a while at least – that the government’s seemingly indispensable economic lever was intact.

http://finance.yahoo.com/news/janet-yellen-speech-economic-club-of-new-york-165123584.html

But there’s evidence that the electorate – in its widespread support for outsider Donald Trump – recognizes that the political establishment and its powerful central bank are gaming the country.

http://finance.yahoo.com/news/hillary-clinton-cannot-win-us-112632221.html

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