Brian Domitrovic was one of 22 conservatives invited by American Principles in Action to meet with Janet Yellen last Friday. In his column yesterday for Forbes.com, Domitrovic reveals what he told the Fed Chair:
In the era of the near-classical monetary standard, the economy enjoyed a long rush of investment into the production of finished goods and services, into ‘real’ purposes that help human beings live better. In the non-classical eras, investment in primary inputs to the exclusion of finished production of other goods was so great that it took on the aspect of a distortion.
The rush into commodities in the 1970s and the 2000s was, collectively, a move into hedges against the currency, on account of the non-adoption of classical monetary policy. The economic effect was the deprivation of investment in real purposes. The primary harms fell upon wage-earners, who are dependent on real investment for jobs and the affordable provision of real goods and services. The primary benefits (which were proportionately smaller than the harms) fell to those who were well-positioned in one place—in the financial sector—to profit from the new status of currency hedges.
Be sure to read the rest here.
Paul Dupont is a legislative assistant at American Principles in Action.