Caroline Pellegrin, Chapter Ten, Question 6

It seems as if the invisibe hand has grown much more apparent. Throughout this course I have belived that we are very much governed by a free-market, but after Wheelan describes the power and implications of the Federal Reserve my opinion has been altered (though I do realize that the FR is separated from direct government imposition and that there is an valid need for it). Prior to this chapter my view on the Federal Reserve was hazy a best; I kind of imagined it as a dozen men, around the age of 50, sitting in a vault of money. I was a bit off. Infact, the Federal Reserve is far greater than that. It has the primary goal of handling monetary policy, in simple terms controlling interest and inflation rates. They set the "speed limit"of the economy and budget the prescribed inflation limitation accordingly. In other words, the Federal Reserve literally has our economic prosperity in their own hands. With a faulty lending decision or negligent inflation control the economy can easily be set into a spiral. What if Ben Bernanke has a bad day? He is only human! There are so many things that are utterly unpredictable in our economy. I was a bit relieved and freightened that the position of the Federal Reserve chairman was appointed. For one, that keeps the president from being able to fill the Federal Reserve positions with people that will act according to his or her own will, but on the otherhand it makes the actions of the Federal Reserve far less transparent. These individuals wield an enormous amount of power, yet we have virtually no say in who they are. How can we be sure that they aren't strategically aligning themselves with other banks and industries? This chapter challenges how much economic free will we really have.