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It might be a little results oriented, but I like the Fed because it has been successful. Since the Depression, there has not been a severe economic downturn (defined by joblessness and GNP) or unmanageable inflation. The economy has functioned particulary well over the last 20 years.
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Sorry iron this is silly reasoning. The Fed has been around since 1913.
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yes, but the fed only really began operating as it currently does far later in its existance.
and to those who say the fed is theoretically flawed, what is the theoretically correct system? no intervention at all? that would create other problems and distortions that would take a long time to correct with each passing cycle and would always swing far from "equilibrium."
there are costs to a centrally controlled monetary system (many have been mentioned), but i don't think they are massive enough to warrant the costs of a totally free economy where human irrationality causes swings that would widely distort the system and affect everyday life of those in the system.
Barron
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The potential for the Fed to screw up is the same as it was in 1913, 1929, 1930-1938, 1970-79, etc. Paul Volker was the first Fed chairman to start the disinflationary process. Alan Greenspan continued on and I believe had the longest reign as Fed chairman. You guys don't know what it was like pre Volker and Greenspan. The potential to screw up is still there. A major change in Fed policy is only an appointment away. So sorry your rational is silly too.
Edit: Here's another point that people on the left have made constantly on this forum. Real wages have basically stagnated at best for lots of people in this country from 1982-present. Not saying the Fed is the main culprit but when we say the economy has done well over the last 20 years I think that needs to be elaborated on. Here's a linke to some wage data in the Presidents most economic report:
President's Economic Report
For instance on page 286, hours and earnings in private nonagricultural industries in 1982 $ have increased by a [sarcasm]whopping[/sarcasm] 2.1% since 1982. They've actuall declined by over 10% since 1965. By no means has everyone prospered in the economy over the last 20-25 years either.