There are a good number of political issues where the general American public forms strong opinions despite being very, very uneducated about the issue. Global warming, the complexities of foreign policy, or pretty much anything about economics come to mind. A recent example of this unfounded consensus that I find fascinating is the public’s disdain with the Federal Reserve.
From what I know about it, the Federal Reserve does more harm than good. What sets the Federal Reserve apart from something like the DMV though is that it is probably second only to the President in terms of the most powerful entity in the world. By dictating the money supply in the world’s largest economy, something the U.S. government legally has a monopoly on, the Federal Reserve has the power to make a lot of people and a lot of people pissed off – without much regard for that subtly undetected thing called inflation.
But the complexities of monetary policy have meant that the Federal Reserve usually does a lot of things that Americans have no idea about. Interest rates, reserve ratios, derivatives? I don’t think there are many people that can actually give you an educated and legitimate opinion on whether the Federal Reserve is acting well or poorly. Ron Paul introduced a bill to “audit the Fed” to make the Fed be more transparent about its operations. In this isolated occasion, the public seems to be in agreement with Paul. Some progressive bloggers here and here blame Bernanke for the state of the economy (why?). Every Republican member of the House supported Paul’s bill.
I voted for Ron Paul in the last Republican primary because I thought he was, at least, a breath of fresh air on the political landscape. I am in no position to make a qualified judgement on auditing the Fed, but what I will say is that most economists (aka the people who study monetary policy for decades as their job) think Bernanke is doing a great job. What I can say is that anyone who blames Bernanke for not creating enough jobs is delusional. Rates are close to zero and he’s doing everything in his power to stimulate the economy (too far, according to Ron Paul and a lot of other people).
I usually don’t like supporting a certain side of an issue with a blanket statement of “the experts say so”, but I do think when it comes to the populism against the Federal Reserve, most of the anti-Fed activism is quite unfounded.