1150 Seventeenth Street, NW, Washington, DC 20036
(Two blocks from Farragut North Metro)
Post- Event Summary
At an AEI event Monday afternoon, Rep. Kevin Brady, vice chairman of the Joint Economic Committee, presented his new legislative proposal — the Sound Dollar Act — which seeks to eliminate the Federal Reserve’s mandate to maintain full employment and aims to promote long-term price stabilization. Brady argued that a single mandate to control inflation is the surest way to economic growth, noting that if the Fed were successful, job creation would follow.
The panel of Federal Reserve experts universally applauded Brady for initiating an important conversation on the role of the Fed, though they disagreed on specific reforms. Title I, which advocates the single mandate, was largely praised. However, AEI’s Stephen Oliner, Citigroup’s Nathan Sheets and the Brookings Institution’s Donald Kohn noted that over the last several decades the Fed’s inflation performance has been as good as that of central banks with hierarchical mandates. Former president of the Federal Reserve Bank of Richmond J. Alfred Broadus gave Title I five stars, though he did award only one star to Title V, known as the Exchange Rate Responsibility Act. Title IV, which would require the release of transcripts after three years rather than five, was hotly debated. The panelists largely rejected the proposal, advocating the current five year requirement, while moderator Kevin Hassett of AEI supported a move toward greater transparency. Former director of the Federal Reserve’s Division of International Finance Sheets asserted that the burden of proving the benefits of the reform lies with its proponents. Overall, the panelists highlighted many of the concerns that will receive further scrutiny and discussion as the bill moves forward in the legislative process.
Since 2008, Washington has relied on the Federal Reserve to exercise a broader mandate in response to economic problems. Does the Fed’s expanded role obscure the responsibility of Congress and the president to have a pro-growth budget and regulatory environment? Could the Fed’s expanded role threaten its ability to keep inflation stable over time? At this event, Representative Kevin Brady (R-Texas) will discuss new legislation aimed at increasing the accountability of the Federal Reserve while strengthening its independence from political pressure. The legislation would (1) give the Fed a single mandate to maintain the purchasing power of the dollar; (2) expand the Federal Open Market Committee (FOMC) to include all 12 regional Federal Reserve Bank presidents; (3) speed up public access to FOMC transcripts; and (4) end “too big to fail.” Following Rep. Brady’s remarks, a panel of experts will debate the merits of his legislation.
Registration and Lunch
KEVIN A. HASSETT, AEI
KEVIN BRADY, U.S. House of Representatives (R-Texas)
J. ALFRED BROADDUS, Retired President, Federal Reserve Bank of Richmond
DONALD L. KOHN, Brookings Institution
STEPHEN D. OLINER, AEI
NATHAN SHEETS, Citigroup
KEVIN A. HASSETT, AEI
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Representative Kevin Brady (R-Texas) represents the eighth district of Texas in Washington. A pro-family, pro-small business conservative, he is the vice chairman and top Republican on the Joint Economic Committee. A deputy whip for the GOP leadership team, Rep. Brady is a senior member of the House Ways & Means Committee, which has jurisdiction over two thirds of the federal budget, including taxes, Social Security, Medicare, international trade and welfare. As the chairman of the Subcommittee on Trade and a senior member of the Social Security Subcommittee, he fights for free market solutions to our country’s economic challenges and for the preservation of the programs that help our seniors. Before his election to Congress, Rep. Brady worked as a chamber of commerce executive for 18 years and served six years in the Texas House of Representatives.
J. Alfred Broaddus retired from the Federal Reserve Bank of Richmond in 2004, where he had served as president from 1993 to 2004. In this role he served as a member of the Federal Open Market Committee of the Federal Reserve System. Before his term as president, he held a variety of positions in his 34-year career with the bank, including director of research. He was a member of the Economic Advisory Panel of the Federal Reserve Bank of New York from 2004 to 2009. Mr. Broaddus is currently a director of Albemarle Corporation, Faison Enterprises Inc., Markel Corporation, Owens and Minor Inc. and T. Rowe Price Group. He is also a member of the board of visitors of Virginia Commonwealth University. Active in civic work in Richmond, Mr. Broaddus is currently a member of the boards of directors of the American Civil War Center at Historic Tredegar, Venture Richmond and the Virginia Council on Economic Education. He is also a member of the advisory board of the Massey Cancer Center at the VCU Medical Center.
Kevin A. Hassett is the director of economic policy studies and a senior fellow at AEI. Before joining AEI, he was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at the Graduate School of Business of Columbia University, as well as a policy consultant to the Treasury Department during the George H. W. Bush and Clinton administrations. He served as an economic adviser to the George W. Bush 2004 presidential campaign, chief economic adviser to Senator John McCain during the 2000 presidential primaries and senior economic adviser to the McCain 2008 presidential campaign. Mr. Hassett also writes a column for National Review.
Donald Kohn is a senior fellow in the Economic Studies Program at the Brookings Institution. As the former vice chairman of the Federal Reserve, Mr. Kohn is an expert on monetary policy, financial regulation and macroeconomics. He advised Federal Reserve Chairman Ben Bernanke throughout the 2008-2009 financial crisis and also served as a key adviser to former Fed chairman Alan Greenspan. Mr. Kohn is a 40-year veteran of the Federal Reserve System. Before taking office as a member of the Board of Governors of the Federal Reserve, he was an adviser to the Board for Monetary Policy (2001-2002), secretary of the Federal Open Market Committee (1987-2002), director of the Division of Monetary Affairs (1987-2001) and deputy staff director for Monetary and Financial Policy (1983-87). He also held several positions in the Board's Division of Research and Statistics: associate director (1981-83), chief of Capital Markets (1978-81) and economist (1975-78). He has also served as chairman of the Committee on the Global Financial System (CGFS), a central bank panel that monitors and examines broad issues related to financial markets and systems. Mr. Kohn has written extensively on issues related to monetary policy and its implementation by the Federal Reserve.
Stephen D. Oliner is a resident scholar who joined AEI after a career at the Federal Reserve Board that spanned more than 25 years. He has held a number of high-level positions at the Fed, most recently serving as a senior adviser in the Division of Research and Statistics. He was actively involved in the Fed's analysis of the U.S. economy and financial markets, and his research spanned a wide range of topics, including monetary policy, business capital spending, productivity growth, commercial real estate and the measurement of capital. Concurrent to his position at AEI, Mr. Oliner is a visiting scholar at the UCLA Ziman Center for Real Estate. He also maintains an economic consulting practice.
Nathan Sheets recently joined Citigroup Inc. as Global Head of International Economics. In that role, he is helping lead the firm’s worldwide team of economists, with a special focus on coordinating the international forecast. His own research focuses on global themes, with a particular emphasis on the position of the United States in the world economy. Previously, Mr. Sheets worked at the Federal Reserve Board for 18 years in a variety of positions. From September 2007 to August 2011, he served as the director of the Board’s Division of International Finance. He also served as one of three economists on the Federal Open Market Committee. Mr. Sheets represented the Federal Reserve at many international meetings and was a member of the Committee on the Global Financial System sponsored by the Bank for International Settlements. From 2006 to 2007, while on leave from the Board, Mr. Sheets worked as a senior adviser to the U.S. Executive Director at the International Monetary Fund. During his tenure at the Federal Reserve, Mr. Sheets worked on a range of issues including the adjustment of U.S. current account imbalances, approaches to resolving emerging market financial crises and reform of the International Monetary Fund. His research has been published in the “Journal of Money, Credit and Banking,” the “Journal of International Money and Finance,” the “Journal of International Economics” and the “Review of International Economics.”