Lately the Federal Reserve Board has come under scrutiny, because it has been revealed that they are profligate, incompetent, neglectful, and without fashion sense.
Note that their independent legal status means that there is NO oversight of their performance, operations, or budget by anyone. They do exactly as they please.
The current carload of bozos sits in grand style in their DC Headquarters, where apparently the main activity keeping them busy is Candy Crush and wordle. One of their key reasons for existence is to maintain the value of the dollar, by controlling inflation. As anyone who goes to the grocery store can attest, they have failed miserably in this core responsibility Seven percent is the worst since Jimmy Carter. (Of course, spending by the current administration is the main driver, but still. Fed enabled the spending, right? ) So strike one for the pinstriped masters of the economical universe.
Another job that the Fed is SUPPOSED to be doing, is keeping our banking system from keeling over. We financially challenged rubes imagine a crack squadron of financial whizzes, wielding razor sharp subpoenas and technical savvy, sent out to dive into the books of banks where trouble is afoot. They fly in, armed with laptops and tasers, getting CEO’s fired, and cleaning house. Voila, the problem is cauterized and the banking system is as sound as the rock of Gibraltar.
Unfortunately, this vision is tragically false. What we have instead is a group of people attempting to stop banks from lending to energy companies, concerned with all kinds of trendy social (and socialist), causes, and inviting the foxes into the henhouse. When trouble is identified, the Fed governor leaps into action. Or rather, does nothing at all about it. Lack of action of course, always magnifies the cost of the eventual bailout.
Lest you think I exaggerate how far off the reservation the Fed is, check out the stated goals for Mary Daly, President of the San Francisco Fed. Nowhere in her key goals do we see controlling inflation, or keeping the banking system sound. Fortunately, from her perch atop the clueless Fed West, she is controlling climate change and providing equity across ethnic groups. Awesome!
Silicon Valley Bank is the latest example, and there may be another 200 banks like it. The president of this $20 billion hole in our deficit sat on the San Francisco Fed Board. SVG was identified as a potential problem 2 years ago. The laughable “supervision” of their drinking buddy on the board apparently amounted to having him pick up the bar bills. The bank went under due to mismanagement. Without a peep from the so-called supervisors at the Fed.
To compound the mess that the Fed has failed to address, the Fed has announced that the US government now guarantees ALL deposits at ALL US banks. This is absolutely guaranteed to cause huge bailouts later. Great job, especially since it is not clear that the fed has the legal authority to do that. Ho hum. We at the Fed do what we want, so there.
So, strike two on the chumpires at the clueless Fed.
Last up, we might expect PhD economists to be modest in their spending on themselves. Of course, the Fed has completely failed in this regard also. Their Headquarters expansion is slated to cost $2.5 BILLION or more. Given the inevitable cost overruns, lets say it winds up being like $3 billion.
A quick google search indicates that the average cost of commercial (office) construction is $450/square foot, although this can rise to as much as $1,000. With the addition of a snazzy parking garage for the senior managers to use, the building once completed will be about 600,000 sq ft. Using a more conservative cost comparison figure of $700/sq ft, the cost of creating the building from scratch should be $420 million. Or as much as $600 million. And most of the building already exist.
This means that the supposedly brilliant and dedicated civil servants are overspending by $2.4-$2.6 BILLION.
Strike three on the Fed. The Board of governors fails at containing inflation, their primary job. They fail at overseeing banks, job #2. And then they waste billions to create for themselves a comfy office space which features an art collection, (Andy Warhol is featured), hot and cold running faucets from which artisanal water (both carbonated and non) flow, and presumably many trimmings with gold inlay. There is a tunnel to connect two wings, lest the scions of the economy get their tootsies wet during the inconvenient 50 yard walk.
Don’t believe me? Option A is under construction. I believe they are installing Tuscan Marble in the parking garage.
What should we do to address this dumpster fire of a governmental catastrophe? I know where we can get actual clowns now out of work. Barnum and Baily folded up the circus tents some years ago, leaving their performers out of work. Let’s hire their unemployed clowns and install t hem at the Fed. They couldn’t do worse, and at least we would get a few laughs out of them.
Future Board of Governors, Federal Reserve Bank. Minimum qualification: High school degree
One thought on “A ConFEDeracy of Dunces”
I think the clowns are more qualified.