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Living and/or working in an echo chamber is safe and comfortable, but unconscionably lazy and dumb. It is SO, so easy to intentionally – or accidentally – place oneself in an environment that constantly reinforces pre-existing beliefs and opinions, and at the same time prevents consideration of alternative ideas and perspectives.
The most common echo chamber (or “Bubble,” if you prefer) comes from the news media. If your only news source is CNN, you live in a news bubble that continuously echos a left-leaning bias. If your only news source is Fox, you live in a news bubble that continuously echos a right-leaning bias. Either way, your perspective gets warped. Your perspective gets more and more narrow-mindedly wrong-headed.
Relentlessly repeated, monotone opinions will lull anyone inside a news bubble – or any sort of echo chamber – into a mental comfort zone insulated from any upsetting views that would require effort to integrate into your worldview. Opinions harden. Dissenting ideas and perspectives get ridiculed, rejected and banished from consideration.
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Fortunately, when it’s just you or me living inside such an echo chamber or bubble, we can’t do any real damage. Our circles of influence are simply too small. Maybe we influence family, friends and a few co-workers, but society at large is safe from our potentially goofy ideas. That said, however…
Echo Chambers occupied by people with a lot of power can (and do) wreak havoc.
Wouldn’t it be scary, for example, if there were a small group of people who could profoundly influence the entire U.S. economy, all of whom live inside their own private echo chamber? Let’s say they had control of interest rates. They could keep rates extremely low or jack them way up at will. They know exactly how to do so of course; and they know all about every single one of the unintended consequences of their actions – because they are all …ahem… “experts.”
Seriously consider the question I just posed… Wouldn’t it be scary if there were a small group of people who could profoundly influence the entire U.S. economy, all of whom live inside their own private echo chamber?
Woe to us all. That group exists! It’s called the Federal Reserve System. Let’s take a look at the leadership of this outfit; this small group of people who continuously exert a profound influence on the entire U.S. economy; and therefore the entire world economy. Seriously, if I set out to design an echo chamber, I don’t think I could come up with a better one.
(Thanks to John Mauldin for the following biographical research.)
- Loretta Mester, head of the Cleveland Fed and a 2022 voting member of the FOMC, the Fed committee that decides on interest rate hikes, is a 63-year-old academic economist. She joined the Philly Fed in 1985, a freshly minted Princeton PhD, and has never worked outside of the Federal Reserve System. Never.
- John Williams, head of the NY Fed, has never held a job outside of the Federal Reserve System.
- Jim Bullard, head of the St. Louis Fed, has never held a job outside of the Federal Reserve System.
- Esther George, head of the Kansas City Fed, has never held a job outside of the Federal Reserve System.
- Mary Daly, head of the San Francisco Fed, has never held a job outside of the Federal Reserve System.
- Charles Evans, head of the Chicago Fed, has never held a job outside of the Federal Reserve System and academia.
- Raphael Bostic, head of the Atlanta Fed, has never held a job outside of the Federal Reserve System and academia.
- Kenneth Montgomery, interim head of the Boston Fed, has never held a job outside of the Federal Reserve System.
- Meredith Black, interim head of the Dallas Fed, has never held a job outside of the Federal Reserve System.
- Patrick Harker, head of the Philadelphia Fed, is not a Fed lifer. No, he’s an academia and government lifer.
- Thomas Barkin, head of the Richmond Fed, is also not a Fed lifer. No, he’s a former senior partner and CFO at McKinsey.
- Oh and a fun fact… Lael Brainard, while she’s no longer a regional Fed president (but is on the Fed board of governors), had a stint at McKinsey as her only job outside of government and academia.
- And then there’s Neel Kashkari, head of the Minneapolis Fed, the closest thing in this group to an outlier background-wise is still a creature of big banks and the finance wing of the federal government. I wonder why he is so often visible and vocal… (Check out the article Neel is just a stalking horse. Excellent insight!)
So 9 of the 12 regional Federal Reserve Bank presidents never worked anywhere other than the Federal Reserve Banking System. Another has never worked outside academia or government. Another came from a massive, highly influential financial consulting echo chamber. The last and most public voice of the Fed might simply be outspoken by nature, or maybe, because of his slightly different pedigree, he’s the obvious choice for a frontman.
The whole pack of them have spent their entire careers inside their own echo chamber. A highly prestigious one, but an echo chamber nonetheless. So how comfortable are you knowing that the single most powerful group pulling all the economic strings on a global scale lives in an echo chamber? It scares the hell out of me.
I’m your Intentionally Vicarious host Todd Youngblood – Extremely wary of the Federal Reserve Echo Chamber, but still having more fun than anyone else I know.
Thanks for paying attention…