Tuesday, April 14, 2015

San Francisco Fed Prez Selling Monetary Policy T-Shirts

I have often argued in the EPJ Daily Alert that the Federal Reserve, rather than being driven by policy rules, such as "accelerating money growth is bad," is simply driven by current economic data, without significant focus on how monetary policy may distort the structure of the economy in ways not detected by the data points monitored by the Fed..

San Francisco Fed President John Williams appears to want to drive home my point. He has been having T-shirts printed that stress that decisions will be driven by the data.

The black T-shirts which say “Monetary policy – it’s data dependent” are white prints on black shirts, much like the style favored by rock fans to show their enthusiasm for bands, notes Reuters.

By adopting this "data dependent" approach, the Federal Reserve is seemingly unaware, or chooses to ignore, the important Austrian School Business Cycle Theory insight that all central bank increases in money supply lead to distortions in the economic structure. By ignoring this insight, the Fed is once again creating another boom-bust business cycle that goes on despite the fact that the Fed is monitoring employment and price inflation data.



  1. I still say that there isn't a Keynesian in the galaxy who has ever let even basic Austrian concepts within two blocks of his/her brain.

  2. Great observation RW. Since data is just fodder for statistics, Williams is apparently proud to announce that Fed policy is guided by "...lies, damn lies, and statistics..." Maybe we need to print up some T-shirts.

  3. Is Data Dependency destroying your life?

    Has the crutch of "The Economics of the Seen" taken control of your world view?

    Data addiction is a complex illness characterized by intense and, at times, uncontrollable data craving, along with compulsive data seeking and use that persist even in the face of devastating consequences.

    Too often, addiction goes untreated. Austrian Business Cycle Theory is here to help you find the path away from your data compulsion and toward a world of "The Economics of the Unseen." At the Misses Institute, addiction treatment is available which provides residential and outpatient treatment for your Data Dependency issues.

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