Christina Parajon Skinner (University of Pennsylvania - The Wharton School) has posted Capture the Fed (Populism and the Future of the Fed (Jim Dorn ed.), Forthcoming) on SSRN. Here is the abstract:
There is today a palpable struggle for control of the Fed’s vast power. There are those in Congress, academia, and the executive branch that now seek to capture the Fed’s balance sheet, or its regulatory and supervisory might, to accomplish various social and economic policy goals—concerning climate change, inequality in the labor market, financial inclusion, and U.S. competitiveness with China. As this chapter will argue, those who wish to push the Fed beyond its classic technocratic purview appear to perceive the Fed’s power as a valuable commodity ripe for capture.
While I have elsewhere written about popular pressure on the Fed to engage in activism, and the risks such pressure presents to the Fed’s independence, I have yet to offer a theory of what precisely incentivizes or invites such pressure in the first place. Why does the Fed’s power seem capable of capture? This chapter takes that step back and offers a theory of what makes the Fed susceptible to ongoing popular efforts at capture. Specifically, it argues that Congress h
