The Goldilocks Zone
The latest meeting minutes of the Federal Open Market Committee (FOMC) offers valuable insights into the make-believe nature of monetary policy. While the true motives of the Fed's inner circle may forever remain a mystery, it is evident their narrative revolves around the quest for an ideal economic state or finding a Goldilocks Zone of economic data. Only when the data aligns perfectly will the Fed’s mission be complete and the battle against inflation be won.
Let’s examine their perspective on the unemployment rate. In their own words:
Perhaps some find unemployment statistics intriguing. But the practical application of this data can hardly be explained and its conclusions are offensive. If African Americans are at 5.6 percent and Hispanics at 4.0 percent, it suggests that somewhere in America exists a team of technocrats tasked with answering the question: How many minorities should be in the workforce?
Average hourly earnings are given similar treatment:
Even if we overlook the issues of arriving at a national average for hourly earnings, the problem persists in what the preferred hourly pay should be.
Mainstream economic news outlets like CBS perpetuate the Goldilocks idea:
Should anyone believe these economists, they’d have to believe the Fed can do the impossible; in this version, finding the interest rate that ensures the economy runs neither too hot, nor too cold so that prices continually rise by just the right amount, guaranteeing prosperity…
Of course, this quote is entirely fallacious, and even encompasses the idea that (price) inflation equates to economic growth.
Yet, the Fed shows no sign of reservation, going so far as saying:
Concluding, based on the data:
The Fed, backed by mainstream economists and the mainstream media, perpetuates a game presented to the public as economic policy. They pursue an interest rate that would magically result in ideal consumer prices and widespread economic prosperity. But if such a rate exists, it would have been both communicated and achieved by now. All of their other data, whether unemployment statistics or hourly earnings, is just noise in an already crowded arena of barely useful economic data, serving little purpose other than maintaining the illusion of control.
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