You may find Victoria Guida’s interview of former Federal Reserve economist Claudia Sahm in Politico as interesting as I did. Here’s a snippet:
We are in a moment of extraordinarily high disagreement among [Fed policymakers]. And there’s disagreement on so many levels, which is what makes it really hard on the outside to piece through what exactly is going on inside their meetings. So, you have the first level of, they have a new framework [targeting an average of 2 percent inflation over time and considering whether the economy is experiencing broad employment]. Those are new to the Fed. It’s not surprising that the different participants of the [Fed’s rate-setting committee] look at the strategy document that they all signed on to and see different things.
or this:
Sahm has been particularly vocal in the debate over the government’s response to the pandemic, advocating for stimulus checks and generous unemployment benefits, and shooting down arguments that such actions would pose dangerous inflation risks. She’s worked closely with Sen. Michael Bennet (Colo.) and other Democrats on the Hill to craft proposals beefing up the nation’s “automatic stabilizers,†policies that tie government benefits to economic conditions rather than subjecting the unemployed to the uncertain whims of Congress and imperfect economic forecasting.
and this:
Frankly, there are many people in the economics profession who are on the spectrum. So you have people that have low emotional range, and then I have high range. They frustrate me, and I frighten them. Because we’re so different. And economics has put a really big emphasis on what they consider rational, logic, numbers. Feelings, and emotion, frankly, are considered less intelligent. But within the way I approach my work, I’ll lean into the emotion sometimes, because it’s about people.
I think I can answer the implicit question in two of those. The Congress is reluctant to put more automatic stabilizers in place for the same reason that the Federal Reserve governors are: they take them out of the equation. They’d be out of a job and both being in Congress and being a Federal Reserve governor are jobs that are accompanied by opportunities for wealth and power. Why take yourself out of the equation?
At any rate read the whole thing. I found it enlightening.
