When reading a commentary funded by a partisan think tank, it is prudent to ask if all the relevant evidence is being presented. In the case of The Heritage Foundation’s E.J. Antoni’s recent article (“The Fed’s monetary malpractice will cost you,” Sept. 23), two things are worthy of note.
First, Antoni’s argument that Federal Reserve Chair Jerome Powell’s inept monetary policies will cause a recession (a “bust” in Antoni’s words) that will hurt the “common man” is based on a logical fallacy. It assumes facts not in evidence. Maybe the Fed’s recent monetary tightening will cause a deep recession and maybe it won’t, but we won’t know for perhaps several years since recessions are defined retrospectively. A prediction is not a fact.
Second, Antoni’s prediction is based on former Fed Chair Paul Volcker’s allegedly skillful taming of the rampant inflation in the 1980s. Yet, Volcker’s policies caused a deep recession (often called the Ronald Reagan Recession) that spiked unemployment to just below 10.5%. This high unemployment rate (well above 5%) persisted until the mid-1990s. That’s real economic pain. Just what Antoni accuses Powell of doing.
To be fair, Powell’s recent interest rate increase will undoubtedly cause an economic contraction, the extent of which is unknown. But Powell is dealing with a more robust economy and a lower unemployment rate than Volcker faced. Let’s see how Powell’s policies work before prematurely condemning them.
— Eric Heavner, Towson
Add your voice: Respond to this piece or other Sun content by submitting your own letter.