The Future of the Fed
* Scroll down to view video content from the first event!
As controversy continues over the Federal Reserve's programs and policies, many questions persist as to whether the Fed is up for the challenge. In the wake of the Great Recession, how should the Fed be reformed to prevent the next crisis? Can it manage its dual objectives of full employment and inflation fighting? Can it normalize its balance sheet post-crisis?
The April 27th event in New York City was the first of two sessions co-hosted by the Roosevelt Institute and the New America Foundation on the 'Future of the Fed'. The first session in New York focused on monetary policy and global capital flows. The second session, on accountability, consumer protection, and the future of financial regulation, took place on May 9 in Washington, DC.
Andrew Rich, CEO, Roosevelt Institute
Joseph Stiglitz, Columbia University, Roosevelt Institute
“What we’ve learned is that the actions some thought would promote growth actually led to this historic financial crisis, the effects of which will be long-lasting,” said Stiglitz, who just last week was named by Time magazine as one of the 100 most influential people in the world. “Clearly the Fed’s future role needs to extend beyond simply keeping inflation low.”
"Despite recent job growth, uncertainty surrounding our economic future remains pervasive," said Roosevelt Institute CEO Rich in introducing the event. "The Federal Reserve will remain largely responsible for overseeing a dynamic, stable, and sustainable economy, but it is yet to be seen if it is up for the task—and exactly what that task should be."
Matthew Yglesias, Center for American Progress
Joe Gagnon, Peterson Institute for International Economics
Dennis Kelleher, Better Markets
Joerg Bibow, Skidmore College, Levy Institute
Moderator: Mike Konczal, Roosevelt Institute
Perry Mehrling, Columbia University
Tim Canova, Chapman University
Jeff Madrick, Roosevelt Institute
Elizabeth Renuart, Albany School of Law
“The Fed cannot do its job properly without full employment as one of its key objectives,” said Madrick. “In truth, it has neglected this role now for 30 years.”
Jane D’Arista, PERI, University of Massachusetts, Amherst
Gerald Epstein, PERI, University of Massachusetts, Amherst
Thomas Palley, New America Foundation
Moderator: Rob Johnson, Roosevelt Institute
“As we move forward it is vital for the Federal Reserve to regain the trust of the American people by clearly revealing how it will use its balance sheet, and the associated fiscal risks that will be incurred by the American taxpayers, in the event of another financial crisis and bailout,” said Johnson. “The new communications strategy on which the Fed is embarking today may be a step in the right direction.”
“The Federal Reserve needs to become more intellectually pluralistic to avoid a repeat of the 'group think' that contributed to its pre-crisis blindness,” said Palley. “Its inflation target should be set to attain the maximum sustainable rate of employment. And the Fed must also apply quantitative balance sheet controls to the financial sector (including shadow banks) to prevent future financial excess.”