In an increasingly interconnected world economy, our stubborn and seemingly isolationist Federal Reserve is leading us down a dangerous path filled with troubles beyond belief.
In their efforts to prove that they've done their jobs (i.e., managed the subprime-mortgage mess), Fed members are hell-bent on pulling the trigger on a rate hike. But most folks on Main Street will tell you they're no better off than they were before the 2008 financial crisis and that their job situations are shaky at best.
Yes, I'm aware that the jobs data last week showed strong private-sector hiring and a lower unemployment rate. However, I continue to think that the figures are skewed heavily by the creation of entry-level and low-paying jobs.
All Fed chair Janet Yellen & Co. have to do is talk to a few recent college graduates to know that. Maybe Stanford and Harvard grads and people with technical degrees are getting multiple offers, but what about marketing or English majors? Heck, what about those graduating with business degrees?
Those grads aren't finding the job market as welcoming as they expected when they went deep into debt to pay for their four-year degrees. The ones who even manage to get offers will likely wind up with jobs that severely underpay them, but that they accept anyway just to pay the bills.
Global gross-domestic-product growth forecasts keep getting lowered by every credible organization, including the International Monetary Fund, the World Bank, the Organization of Economic Cooperation and Development, the European Central Bank and the Bank of Japan. But our relentlessly stubborn Federal Reserve thinks that things are just dandy.
Big mistake, in my opinion.
Even more troubling is the fact that the Fed heads seem to be in our faces more than ever been before. Consider this week's scheduled appearances:
- Chicago Fed President Charles Evan speaks this afternoon.
- On Thursday, we have St. Louis Fed chief James Bullard speaking in the morning, followed by "The Big Kahuna" herself -- Janet Yellen -- delivering a welcoming speech at a Fed conference. Federal Reserve Vice Chair Stanley Fischer will speak at the same event, while the Fed presidents from Richmond, Chicago and New York have speeches planned for that day, too.
- Finally, Cleveland Fed President Loretta Mester will regale us with her words of wisdom on Friday.
What are these jokers doing, running for president? I think even the 2016 presidential candidates would be envious of the headlines and "face time" that the Fed heads are going after.
An in-your-face Fed isn't what the world needs, especially given China's growing ambition to become the go-to country that the United States is at the moment.
A Fed that's stubborn and not able to see the world as one won't survive in its current form for very long. Pursuing a path that's totally out of sync with the rest of the world will only help China achieve its goal more quickly.
Personally, I think that if the Chinese or the Indians or someone else can see the global picture better, then we should let them take the lead. It's time for the Fed to step back and let more globally focused bankers run the show.
In my view, the world needs either a global central bank or a Fed that changes its perspective to a global one, moving away from today's "America is an Island" mentality.
We're not an island and never will be; our economic borders have never been more open. But by pursuing misguided policies, the Fed risks long-term economic irrelevance -- maybe not immediately, but definitely a few years or so down the road.