Independence Without Accountability: The Fed’s Great Inflation Fail
One key takeaway from the spike in prices is that controlling inflation needs to be more of a team sport.
Imagine you discover the mechanic who’s been servicing your car for years has only a hazy understanding of how the engine works. You thought they were doing a bang-up job. In fact, they were just lucky. The first time something major goes wrong, they have no idea what to do. Next thing, you’re hailing an Uber to get to work and wondering if used-car prices have come down yet.
Something similar has happened in the world’s inflation repair shops—otherwise known as central banks. For 30 years, the Federal Reserve, Bank of England, and European Central Bank and its predecessors oversaw low and stable inflation. In return, policymakers were lavished with praise for marshaling technical expertise and wise judgment for the common good.