Dear Secretary Bessent,

I read with great interest your July 21 comment at the Federal Reserve Capital Conference that: "What we need to do is examine the entire Federal Reserve institution and whether they have been successful. . . . All of these Ph.D.s over there, I don't know what they do. . . . This is like Universal Basic Income for academic economists."

Having been an academic Ph.D. economist for forty-one years I believe I can offer a little insight into whether the Fed has been successful (it unequivocally has not), as well as what "All of these Ph.D.'s over there" do. There is a mountain of academic research that shows that the Fed has failed on all counts. It has not only failed, but has made the economy far more unstable and with more price inflation than there was before the Fed existed, for one thing.

As for what all those Fed economists do, well, their Job Number One is to obfuscate these failures with their writings and speeches and to do their best to censor Fed Critics. Furthermore, since every Fed economist is a government bureaucrat, they all do what all government bureaucrats do: They are relentless lobbyists for bigger budgets, more power, a bigger staff, and more pay and perquisites for Fed employees. They also focus much of their research on the left-wing political fads of the day, such as "climate change," racism, gender, inequality, and other projects of the political Left.

As for perquisites, I understand that you are a bit critical of the Fed's spending $2.5 billion on renovations to its headquarters building in Washington, DC. Not for a new building, but for renovations of their already palatial headquarters. To put this into perspective, the cost of building Trump Tower (in the early 1980s), adjusted for inflation, was about $921 million. That's building, not renovating. And people wonder why the Fed has never acquiesced in being audited. There is a large literature in the economics subdiscipline of public choice about how government bureaucracies tend to be budget maximizers, for that it show bureaucrats can personally benefit from the growth of government—bigger budgets means more prospects for higher pay, promotions, larger staffs, and myriad perquisites such as multi-billion-dollar buildings to work in. The Fed would appear to be the Mother of All Budget-Maximizing Government Bureaucracies. (Note that "budget maximizing" is a synonym for "cost maximizing," the opposite of what every successful private business strives to do).

Secretary Bessent, I recommend that you read a study by Lawrence H. White, William Lastrapes, and George Selgin "commemorating" the centennial of the Fed entitled "Has the Fed Been a Failure?" These authors surveyed 195 peer-reviewed academic publications about the Fed's performance from an historical perspective. On the Fed's obligation to control inflation, they concluded that the Fed "has allowed the purchasing power of the U.S. dollar . . . to fall dramatically. A consumer basket [of goods] selling for $100 in 1790 cost only slightly more, at $108, than its equivalent in 1913 (the year of the Fed's founding). But thereafter the price soared, reaching $2,422 in 2008."