A Free Federal Reserve

Nobel Laureate Gary Becker and Judge Richard Posner consider whether a central bank like the Federal Reserve should remain independent of the government. “I have little doubt that central banks should have considerable independence. Yet complete central bank independence from politicians does not seem desirable since banks also can abuse their powers,” says Becker. Posner writes that, “A constitutionally independent Fed—an institution parallel to the Supreme Court—would create something close to a dictatorship over the business cycle, and this is too much power for a democratic society (perhaps any society) to cede to a bevy of economists and financiers. “