While most of the headlines generated from Marvin Goodfriend's testimony before the Senate today focused on the grilling he received from Senate Dems, there is one curious part of his testimony that has been largely overlooked: he flat out lied about his past support for taxing cash.
Unfortunately this issue that would directly impact every single American wasn't brought up until well over an hour into this testimony. It was then that Nevada Senator Catherine Cortez Masto asked Mr. Goodfriend about his past advocacy on "taxing currency" and whether he would support such a policy today.
After assuring Senator Cortez Masto that he wouldn't, he went on to say:
I wrote a paper in 1999 for a Federal Reserve System conference which asked what would happen if interest rates went to zero, and what could the Federal Reserve do. I didn't propose that, that was an academic paper showing what could be done….It was not a proposal. It was an emergency matter we considered as a matter of thinking about these things before anyone ever imagined anything could happen like that.
This is simply false.
While it is true that that Mr. Goodfriend authored a paper for the Federal Reserve in 1999 titled, "Overcoming the Zero Bound on Interest Rate Policy", this was not the last time he has written on the subject. In 2016, he spoke at the Federal Reserve's Jackson Hole conference at a symposium on "Designing Resilient Monetary Policy Frameworks for the Future."
In that paper, he describes the global low interest rate environment and argues that it is important for central banks to be able to be "unencumbered" in a pursuit for negative interest rates – should they be necessary in the face of another financial crisis. He goes on to state:
The zero interest bound is an encumbrance on monetary policy to be removed, much as the gold standard and the fixed foreign exchange rate encumbrances were removed in the 20th century.