“The traditional argument against rules-based monetary policy is that it requires Fed officials to set too many contingencies in advance.” These are the words of economist Jason Furman, chairman of Barack Obama’s Council of Economic Advisers from 2013 to 2017 currently Harvard economics professor. The bet is that Furman could be persuaded to change his mind, or at least persuaded that what he sees as the “traditional argument against rules-based monetary policy” is not the most effective one.

What is much better is that the information gap between Fed economists and the market is so large that it ensures that the Fed’s interventions always and everywhere result in worsening, no matter what it wants to improve; That, or Furman could simply point out that the former Soviet Union, Cuba, North Korea and China under Mao also had brilliant central planners. Get it?

Furman addresses some of the drawbacks of rules-based monetary policy, and in particular that “no rule would have advised central banks to cut interest rates to zero in March 2020, as they wisely did.” Furman’s claim implies that the very market intervention that which no serious economist would recommend in times of calm, is wise when politicians lose their proverbial minds while recommending an economic downturn as a strategy to contain the virus. It seems that Furman could once again be persuaded to think differently and acknowledge what is true: Reliable market signals are most important when the economic outlook is at its most difficult.

After that, it’s strange how literally Furman takes the Fed. This is particularly important because it is remembered that credit card companies aggressively canceled credit cards as the economic horrors of the lockdowns began to emerge, only to be followed by a complete drying up of loans and other forms of financing for businesses when the Fed went to zero. This is exactly why the federal government has launched a variety of loan programs: the lockdowns made them the city’s only financing game. In other words, the Fed’s move to zero was neither wise nor irrelevant to the global economic collapse caused by panicked politicians.

Lastly, on “Zero”: One suspects there is a column or two somewhere in which Furman states the obvious, that artificial price controls are just another way for the government to impose scarcity. Why should the Fed approach its price controls differently?

Starting from the impossibility that is “zero” (if you are confused, look at compounding), Furman made the claim regarding inflation that “the central bank has cleaned up the mess more aggressively than most of its hawkish ones Critics would have thought it possible.” That’s hard to bear. Prices are a function of the number of global hands and machines used in the production of goods. Translated: The Fed hasn’t cleaned anything up. Instead, a global economy that has been destroyed to varying degrees by panicked politicians is laboriously rebuilding what the politicians broke, and falling prices are the logical consequence.

Instead of acknowledging that global cooperation is always and everywhere the driver of falling prices, Furman turned to the “Taylor Rule” and believed that “the Fed would not have needed so many outsized rate hikes in 2022 and 2023 if it had “Rule” is nothing more than another call for market intervention by a few as a replacement for the market itself. Yes, central planning is still being called for instead of giving free people the opportunity to cooperate produce.

So ultimately we should be relieved. Furman’s newfound belief in the Fed’s rules is another reminder that rules or no rules, it really doesn’t matter what the Fed does. Maybe Furman could be persuaded? Because if the Fed had even a fraction of the power over the markets that he imagines, then it’s safe to say that there would be no markets for Furman to analyze at all.