Pence says its time to end the Fed's dual mandate

James Pethokoukis penned a piece called "Sink the Fed's dual mandate" on why we need to end the dual mandate of the Federal Reserve.  The Fed has the task of price stability and job creation.  It is our view that their is no magic wand that causes an extra dollar to create jobs, in spite of all the academic Keynsian talk of multipliers.

Mike Pence has introduced legislation to that effect saying that the Fed should only be in charge of price stability.  Let the debate begin.   

In fact we would go one step further in eliminating the Fed altogether and replacing the 300+ PHDs that work for the Fed with a red brick.   They would all get jobs somewhere working for some investment bank and probably make more money.  The red brick though would love the attention.  Via Reuters:

Multitasking is hard, even for the Federal Reserve. But by law — yet another horrible policy relic of the 1970s – it has to promote both “maximum employment” and “stable prices.” Some Republicans think it better that the Fed, like its European Central Bank counterpart, focus solely on prices getting neither too hot nor too cold. And an effort by Representative Mike Pence of Indiana and Senator Bob Corker of Tennessee is just the start of a GOP push to roll back Team Bernanke’s vast authority.

A just-offered bill by Pence would simply strike the bit about jobs from the Federal Reserve Act. The casus belli is part procedural, part economic. Corker and Pence say the Fed’s attempt to boost the economy by buying bonds usurps the proper fiscal role of Congress and the president. It also risks devaluing the dollar and boosting inflation.

The political context is clear. The opaque, unelected Fed is wildly unpopular with Republicans, particularly those of the Tea Party variety. They blame its interest rate policy for the housing and bank busts. And Bernanke is seen as an enabler of the hated bank bailouts and explosion in government spending under President Barack Obama. Tea Party support would be helpful to Pence if he decides to run for higher office, as he is supposedly considering.
Mike Pence's original statement, via NRO:
“The Fed’s QE2 decision earlier this month to print $600 billion, as an attempt to reduce unemployment, is another example of the failure of its dual mandate. By using monetary stimulus in this way, the central bank has actually taken steps that will prove inflationary in the long run. Printing money is no substitute for sound fiscal policy.
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Fed's dual mission impossible
Pence: End the Fed's dual mandate

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