Federal Reserve Bank of Chicago
Dear Mr. Evans,
In last week's public debate with your colleague Jeffrey Lacker you stressed that the Fed was still "missing tremendously" on the employment side of its dual mandate. You stated: "Our credibility will be judged by how we do on both sides of the mandate."
I'm sorry Mr. Evans, but the Fed's credibility suffers not (so much) from lack of efficacy, but from its colossal collective ego. What you all are "missing tremendously" is the humility (and the memory) to understand that, at best, the appointments you and your cohorts have accepted position you as marksmen/women shooting into pitch darkness at sounds coming at you from every angle. You'd have us believe that your aim is calculated, that you've assessed the prevailing winds, adjusted accordingly and have your target firmly in your crosshairs. Truth be told, having hit nothing your guns are now positioned at your hips, you've set them to auto and you're burning rounds by the billions as you blindfire into the abyss.
Economist Frederic Hayek's admonishment of your profession (in his 1974 Nobel address) was, sadly, prophetic:
the economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.
Will you not confess that without the extreme monetary accommodation (on behalf of Washington, Wall Street, Main Street and their egos) of your predecessors (Alan Greenspan's Fed), the real estate/mortgage bubble could not have materialized? Was it not "brought about by policies which the majority of economists recommended"? Are you not, at this stage, devouring the hair of the mammoth that crushed you?
Martin L. Mazorra