End the Fed...again?

Happy Hour Econ Podcast

In this episode:

• The Federal Reserve was created in 1913 — but America functioned without a central bank for nearly 80 years after Andrew Jackson killed the original one in the 1830s

• The Fed’s dual mandate is price stability and low unemployment — and it has arguably failed at both

• The Great Depression wasn’t just a market crash

• FDR confiscated private gold by executive order during the Depression

• Nixon finished the job in 1971 — cutting the last thread connecting the dollar to gold and turning it into a fully fiat currency floating on “full faith and credit”

• The Fed doesn’t get audited — and its counterargument is that audits would subject it to political pressure, which is rich considering how political it already is

• Under Biden-era governors, the Fed expanded into climate policy and DEI initiatives — mission creep so far outside its statutory mandate that even its defenders struggle to explain it

• Kevin Warsh is the new Fed chair, replacing Jerome Powell after Trump’s very public pressure campaign — including a hard-hat tour of the Fed building as a flex

• The Phillips Curve — the supposed trade-off between inflation and unemployment that justified the Fed’s dual mandate — was likely a spurious relationship that collapsed by the late 1960s

• Scotland ran a free banking system in the 1700s with no central bank and weathered recessions better than England — the historical case for ending the Fed is stronger than the T-shirts suggest

A comedian and an economist walk into a bar...

That’s Happy Hour Econ, where I team up with economist Phil Magness for the Free To Choose Network. Available on Spotify, Apple Podcasts, and YouTube.