Operation Twist-the-Truth: How the Federal Reserve Misrepresents Its History and Performance
45 Pages Posted: 5 Mar 2014
Date Written: March 3, 2014
At its hundredth anniversary, the Federal Reserve System’s powers are greater than ever, its asset holdings make it far larger, by assets, than any of the world’s profit-oriented financial firms, and it commands worldwide prestige. But what has this prestige got to do with the Fed’s actual record? “No major institution in the U.S.,” Milton Friedman observed some years ago, “has so poor a record of performance over so long a period, yet so high a public reputation.” That assessment is no less valid today, thanks to the Fed's success in fostering the public’s favorable opinion of it through its official publications, exhibits, and webpages aimed at the general public, as well as by means of public lectures and testimony of its representatives. Here I survey the ways in which such publications and testimony contribute to the Fed's undeserved reputation by misrepresenting both its history and its record.
Keywords: Federal Reserve, Propaganda, Reputation
JEL Classification: E50, E58
Suggested Citation: Suggested Citation