I tend to trust the Fed as well. They saved us from total collapse in '08, and made the COVID recession the shortest one on record. I think after 40 years of practice we're starting to get pretty good at this MMT thing.
If we had more eyes + more critiques, we could debug their thinking & see where it's going.
That being said, the policy makers and the economists at the Fed are far more capable than most people think. They've gotten a lot right, and proven most naysayers wrong. But the question is, how long will that record last?
The Fed is rather transparent (both with policy thinking and data), and I can't think of any area with more eyes and more critiques than US monetary policy.
I should say "trust" in the sense that I trust my doctor to be infinitely more knowledgeable than myself with regards to health, to the point that I am able to confidently outsource my decision making to him. Not "trust" in the sense that you would blindly trust a family member or friend.
Who is "us" in this case? A lot of people lost their homes/savings. The primary entities saved were the same ones that caused the crisis in the first place. I think it's fair to argue that in the short term a collapse of several major banks might have hurt "the working class" worse. But the in the medium to long term I'm not sure that pulling out all the stops to fix the financial industry's fuckups was the right call.
Not OP, but I'm guessing he's referring to people who rely directly or indirectly on the financial sector. Basically a vast majority of the worlds population.
> A lot of people lost their homes/savings.
Yes, agreed. Unless you are saying things couldn't have been worse for them, but I don't think you are based on the rest of what you wrote...
> The primary entities saved were the same ones that caused the crisis in the first place.
Was this the fed's decision?
> But the in the medium to long term I'm not sure that pulling out all the stops to fix the financial industry's fuckups was the right call.
I'd suggest that lack of prosecution and public take-overs were the biggest problem. From my perspective, the fed did what it needed to do within it's power. They couldn't let the major banks go under without systemic consequences. But you're right we should have prosecuted those liable, and failing too-big-to-fail institutions should have been publicly taken over and (arguably) re-privatized after the crisis. We didn't let markets work how they were supposed to.
This is what it took to reverse 2008's recession. Every time I read this single page document I get a little shiver.
Item #2 is by my interpretation has "any and all means" finality.
("2 Take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.")