by Jonathan Newman
Janet Yellen gave her semi-annual testimony before the Senate Banking Committee this week. In the Q&A time, Senator Pat Toomey criticized the Fed’s policy and suggested that it has only worked to “shift the timing of economic activity.” Tho Bishop briefly mentioned the exchange in his great post earlier this week, and I had to take a closer look.
Toomey also discussed in vague terms the “excess debt” and “excess capacity” firms undertake as a result of expansionary monetary policy. He said these are just some of “many distortions” caused by the Fed.
Of course, this is far from a full exposition of Austrian business cycle theory. But it’s great to hear even this much in a Senate Banking Committee meeting..