July 21, 2015 Print

Monetary policies that effectively rob hardworking citizens of wealth and potential prospects are not only economically unsound but also immoral, according to a panel discussion hosted by Atlas Network’s Sound Money Project on Monday at the Penn Club of New York City. In a discussion titled “Cronyism and the Morality of Sound Money,” Sean Fieler, Dr. William Luther, and Jared Meyer explored the destructive effects of the Federal Reserve’s discretionary monetary policies.

Through its discretionary policies, the Fed is actually “stealing from the average American,” observed Fieler, of American Principles Project. According to Fieler, Fed policies have led to inflation and the decline of manufacturing. This not only diminishes the purchasing power of the poorest Americans, it also sends their jobs overseas. This “robs Americans of their dignity,” Fieler said.

An ideal monetary system should maximize gains from exchanges, explained Luther, an assistant professor of economics at Kenyon College. Luther provided a consequentialist approach when tackling the question of the morality of sound money, and noted, “Changes in the supply of money should not be aimed at fooling individuals to producing or consuming more than they’d like to. … Money should be neutral.” This, of course, flies against Federal Reserve Chair Janet Yellen’s belief that monetary activism is an appropriate reaction to economic hardships. The manipulation of money to improve economic performance is a short-term solution that does not address fundamental economic issues.

Policies that negatively affect the economy make it difficult for the young to enter the job market, ultimately creating artificial winners and losers, pointed out Meyer, a fellow at the Manhattan Institute. By focusing on the implications of monetary policy on millennials, Meyer demonstrated how it’s more important than ever for young people to understand the economic principles underlying sound money. Federal Reserve policies “pick favorites within different demographics and ultimately target millennials,” Meyer concluded.

“Cronyism and the Morality of Sound Money” served as a useful exercise in which its panelists began important conversations leading up to American Principles Project’s Jackson Hole Summit in August, which will include the participation of Atlas Network’s Sound Money Project fellows. There, proponents of sound monetary policy will shadow the Federal Reserve’s yearly meeting and ask Yellen to move the Fed back in the direction of a sound and moral monetary regime, where consistent rules are favored over arbitrary discretion. Money is a moral matter, and events like this will help our side win back the moral high ground.

Learn more about Atlas Network’s Sound Money Project.

Visit the website for American Principles Project’s Jackson Hole Summit.