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Comment by thomashobohm | Hacker News Reader

Please, this isn’t Soviet Russia, economists disagree about practically everything, so the whole argument that the profession has a serious groupthink problem is unconvincing to me. The reason why economists mostly agree on this particular topic-the way the Fed operates-is because it’s exceedingly transparent, theoretically (not to mention mathematically) simple, and empirically verifiable.

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>Please, this isn’t Soviet Russia, economists disagree about practically everything, so the whole argument that the profession has a serious groupthink problem is unconvincing to me.

They disagree on a lot of things, that is true, but the one thing they all seem to agree upon (except for Austrian economists) is that the economy can be effectively modelled and that effective policy prescriptions can be derived from said statistical models. It is a supremely complex system and it is the pretence of knowledge (in the words of Hayek) to believe that you can use monetary policy to command it, much less policies based upon empirical models which are as you say constantly bickered and debated about.

Furthermore, the Fed is not exceedingly transparent - audits of its operations and its meeting minutes are classified and are not open to public review, as is the case with most central banks in the world. I know because I've tried to ask for copies of open market operation details from my central bank (the Swedish Riksbank) but was denied as they are classified by law (which is incredibly unusual for a society where other government agencies publish everything, including income tax returns).

FOMC Meeting Minutes: https://www.federalreserve.gov/monetarypolicy/fomcminutes202...

Fed Audited Financial Statements: https://www.federalreserve.gov/aboutthefed/audited-annual-fi...

I’m sorry that your Swedish central bank is classified, since, based on your worldview, there are presumably a bunch of Swedish economists working there behind closed doors to screw you over.

FOMC minutes are published, but not other meetings which are arguably more important, including the meetings of the Board.

https://www.federalreserve.gov/aboutthefed/boardmeetings/mee...

"Effective March 15, 2020, the meeting was closed to public observation by Order of the Board of Governors1 because the matters fall under exemption(s) 9(A)(i) of the Government in the Sunshine Act (5 U.S.C. Section 552b(c)), and it was determined that the public interest did not require opening the meeting."

This seems to be the case for almost all of their meetings.

They only keep certain parts secret so market actors don’t make decisions based on what the Fed is thinking about doing. Obviously if people knew the Fed was thinking about raising interest rates, for example, it would affect their decisions (and the market as a whole) negatively. This is something any business or economics undergrad learns in an introductory banking class; since you are evidently unfamiliar with the Fed’s system (as opposed to the Swedish one), you may find it helpful to consult an American money and banking textbook.

From your own link, verbatim:

"Items considered in closed session include primarily

- Bank and bank holding company supervisory matters, discussions of which generally disclose information from bank examination reports or commercial and financial information obtained in confidence by the Board - Monetary policy and other matters whose premature release could be used in financial speculation - Personnel matters."

Not very nebulous, eh?

Statistical models exist primarily for the falsification of hypotheses. The Austrians didn't submit such models so their theories could never be subjected to the same scrutiny that mainstream theories are. "It's too complex" is a cop-out, and Austrian theory's lack of math is enticing to people who don't want to put forth the effort involved in rigorous study (i.e., internet scholars). They pretended to be agnostic about economic principles, when really they just applied ad hoc explanations for economic events (which they were free to do because they weren't constrained to those pesky mathematical models).

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