by Jose Nino, Big League Politics:
President Joe Biden has endorsed a bill that was passed in the United States House that would add racial equity to the Federal Reserve’s dual mandate of maintaining price stability and full employment.
The bill in question, H.R. 2543, the Financial Services Racial Equity, Inclusion, and Economic Justice Act, was passed by a vote of 215-207 on June 15, 2022. This legislation is designed to promote racial and economic justice in borrowing, housing, and lending.
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This bill would have the Federal Reserve execute monetary policy and other functions in a way that reduces ethnic and racial inequities.
The Wall Street Journal’s editorial board noted that this bill is in line with the Fed’s recent move to become more woke. Several members of the Federal Open Market Committee (FOMC) have already pushed for “inclusive” employment.
In effect, the passage of this law would make racial equity an integral part of the Fed’s mandate. Under this bill, the Board of Governors and FOMC are instructed to “exercise all duties and functions in a manner that fosters the elimination of disparities across racial and ethnic groups with respect to employment, income, wealth, and access to affordable credit.”
In addition, the bill instructs the Fed to incorporate in monetary policy, payment operations, and the supervision of banking and non-banking entities that the Financial Stability Oversight Council considers to be important.
The Fed’s woke pivot could open the floodgates to all sorts of wacky policy. For one, it will likely encourage questionable lending practices like those of the early 2000s, where people with questionable credit history and financial history could receive loans and mortgages that they could never pay off.
Adding the Fed’s easy monetary policy into the mix, and you have a recipe for all sorts of economic chaos.
Ideally, the Fed would be abolished and a competing currency ecosystem would be allowed to take its place.
In the meantime, woke toxicity should be thoroughly purged out of the Fed. This poison must be extirpated from our polity.