It is a pleasure to appear again before the Joint Economic Committee. My association with this committee goes back to the days of Senator Paul Douglas. It was Sen. Douglas who pushed and prodded the Federal Reserve to stop holding interest rates fixed and permit monetary policy to do much more to prevent inflation. His views eventually prevailed. That should remind the members of their responsibility.
Today, I will answer the questions that the hearings seek to answer. They are good questions that show rising concern for the consequences of recent Federal Reserve actions. I will introduce my answers with my explanations of why Federal Reserve policy is misguided and mistaken, inflationary and inappropriate. There are several reasons. I will give three.