Federal Reserve Failure

Telling chart from Karl Smith:

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Central bank independence (seemed to) work so well that it’s desirability became something of an artical of faith. But it’s not an idea handed down from heaven, it’s an idea whose popularity spread because it (seemed to) work well. More recently, we’ve seen it work extremely poorly in Japan for an extended period of time and now the US and Europe seem to be caught up in the same dynamic.