State of The Nation

  How the Fed Avoided Its Predecessors' Fate The most consequential institutional design difference between the Federal Reserve and its predecessors: the absence of a charter expiration date. This wasn't an oversight—it was a deliberate lesson learned from watching two previous central banks abolished when their 20-year charters came up for renewal. The question of whether the Fed could have survived renewal in 1933, at the nadir of its catastrophic Great Depression failure, reveals much about how institutional entrenchment works and why we keep recreating what we previously rejected. The Deliberate Design: Learning From Abolition When Congress debated the Federal Reserve Act in 1913, the fate of the First and Second Banks loomed large. Both had been competently managed at various points. Both had provided genuine economic benefits. Yet both were abolished when their charters expired—not because they failed operationally, but because Americans rejected concentrated financia...

The Federal Reserve at 110: America's Third Central Bank Repeats Century-Old Mistakes TL;DR : The Federal Reserve marks 110 years as America's third attempt at central banking, following two predecessors abolished after fierce political battles. The Hamilton-Jefferson and Jackson-era debates over concentrated financial power, inflation, and constitutional authority remain unresolved. Pre-Fed panics resulted mainly from government interventions—railroad subsidies, currency manipulation, banking restrictions—not market failures. Yet the Fed presided over the Great Depression, destroyed price stability through 97% currency devaluation, and enabled the fiscal irresponsibility now plaguing states and federal government alike. The eurozone crisis reveals these tensions persist: monetary union without political consensus breeds instability whether in 1830s America or 2020s Europe. WASHINGTON —When the Federal Reserve opened for business in November 1914, it was solving a problem th...