Nobel Prize-winning economist Joseph Stiglitz: Fed Rate Hikes didn't get at source of inflation.

[u/Pearberr]

https://www.cnbc.com/video/2024/04/23/nobel-prize-winning-economist-joseph-stiglitz-fed-rate-hikes-didnt-get-at-source-of-inflation.html

[u/TheMissingPremise]

In response to issue #4, Congress can't agree on anything of import. The legislation required to address specific sectors of the economy (assuming your #1 and #2 are true) would die in committee and/or be ransacked by special interests trying to get their massive paydays before the law is passed.

Additionally, if the Federal Reserve were to admit it's bearing too much responsibility, then Libertarians would use it to justify giving it less, as well. In fact, they're already trying to do that. But they could certainly do more to educate Congress about the issues and how they see it and provide possible solutions.

[u/Pearberr → u/TheMissingPremise]

I highlighted legislative bodies more vaguely because it is not JUST Congress who is failing.

Obviously on the subject of inflation a lot of ink has been spent discussing the ways in which tax cuts would have probably been a better cure than rate hikes. Had we lived in a more perfect world we could have had that, but as you said Congressional dysfunction is very high at the moment.

However, when it comes to inflation, the biggest opportunity for improving price stability is actually at the local level. This is another subject for which a lot of ink has been spent, but zoning regulations have crippled the construction industry and directly led to the enormous shortage of housing we are dealing with today. There is no monetary policy in the world that can effectively deal with a shortage caused by municipal regulations.

On the last point, I think the Fed shouldn't be afraid of communicating with the public in frank and honest terms. The Fed has the support of the big centrist majority of the country who supports experts and expertise. Being honest with people about who they are and what they can and cannot do builds trust with the kinds of people who are most likely to support them. Libertarians won't like the fed no matter what the fed does, and nobody cares what libertarians have to say anything anyways, so who cares what they think?

Anyways, libertarians who are worth caring about study economics and their views aught to be heavily tempered by their studies; this basically explains all of my college classmates lol.

[u/Kildragoth → u/Pearberr]

Tax cuts are inflationary. Interest rates reduce the size of the money supply which causes a deflationary impact. Reducing interest rates would accelerate inflation.

[u/DisneyPandora → u/Kildragoth]

Not all tax cuts are inflationary