Thursday, October 23, 2014

Brittney Wheeler at Thoughts on Liberty Need to be Familiar Scholarly Work by Libertarians

Last week I critiqued Brittney Wheeler in her attack on the Federal Reserve Transparency Act. To sum, I find two problems with her argument. 1) She should be more intimately familiar with both literature supporting Fed independence and literature that is written and read by libertarian academics. She may not realize it, but academic libertarians have a substantial and credible literature to draw from. To grow the school of thought, not any argument will do. 2) She fails to outline exactly what policies should be implemented by the Fed. Transparency or a lack thereof, means little without a plan for policy. I suggested that a better position is to eliminate implement transparency and initiate a rule. The Fed would be relegated to acting as a computer and market actors would be able to form accurate expectations about the availability of future liquidity.

Miss Wheeler responded and displayed that she does not seem to understand that by writing a blog called Thoughts on Liberty, she is representing the libertarian brand. I listed off the sources that she should be familiar with if she wants to represent this brand. Furthermore, I outlined a type of argument that she, as a brand bearer, should be making. I don’t think she picked up my point as she didn’t mention anything that I suggested that she read. Instead, she digs her heels in further.

Finally, I have been criticized for using academic research published by the Fed.  However, the same people who reject the Fed’s research could be said to have an ideological bias, but that doesn’t warrant the dismissal of their research.  I see no reason why both are not equally credible. Unless the critics can demonstrate a particular issue with the methodology used in the research, I will stand by its validity. However, if the research I originally cited isn’t enough to convince you of the pitfalls of allowing more congressional influence over monetary policy, here is another academic paper that explains how greater independence helps minimize political pressures and points to the supporting body of research, such asCukierman [sic] (1992) , Fischer (1995) , and Maloney, Pickering, and Hadri (2003). In fact, when the IGM Panel of Economic experts was surveyed regarding a similar bill, 70% disagreed with the idea that this type of audit  would improve the Fed’s legitimacy without hurting its decision making.

Comments like this make me think that Thoughts on Liberty should just be called, Thoughts. Sourcing her argument is an improvement, but falls short of the mark. Again, if you adopt the libertarian brand, which Miss Wheeler and the other blogger at Thoughts on Liberty have done, you need to do a good job of representing the school of thought. If you disagree, that is okay, but you need to demonstrate that you are familiar with these ideas. Again, I invite the girls at Thoughts on Liberty to take a look at my citations from last post. As libertarians, I’m sure they will find the literature appealing. I hope that any libertarian interested in economics spend time sifting through the sources I use throughout my posts.

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