The Federal Reserve System, sometimes referred to as the Federal Reserve or “the Fed” is the central banking system of the United States. It was created on December 23, 1913, by President Woodrow Wilson, who signed the Federal Reserve Act into law. Congress agreed to this act because it was to provide the nation with a safer, more stable monetary and financial system.
Responsibilities of the Federal Reserve System fall into four categories:
Conducting monetary policy by influencing money and credit conditions in the economy to assist in the pursuit of full employment and stable pricing.
Supervising and regulating banks and other financial institutions, ensuring the soundness of the nation's banking and financial system. In addition, they are supposed to protect the credit rights of consumers.
Maintain stable financial systems and contain risk that may arise in financial markets.
Provide certain financial services to the United States Government, United States Financial Institutions and foreign official institutions. In addition, they play a major role in operating and over seeing the nation's payment systems.
Do we have stable pricing? Do we have full employment? Do we have regulation of banks? Do we have a stable financial condition?
Price Stability- is a situation where prices in an economy don't change much over time. Price stability would mean that an economy would not have inflation or deflation. This is not common for an economy to have price stability. So why would The Federal Reserve make that a part of their goal. (you can read more at www.investorwords.com/6889/price_stability.html#ixzz2hW4ThpNk).
Full Employment- well anyone that has been searching for a job for any amount of time knows that we do not have full employment. The jobs that were created are minimum wage jobs, part time jobs, with no benefits. People can not live on minimum wage jobs with no benefits, unless we live like my grand parents did during the Great Depression, with families all living together and pooling their money and resources. During the Great Depression my grand father was one of the only people in a three block radius that had a job, so neighbors assisted neighbors, family assisted family.
Regulation of Banks- United States banking regulations consist of privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-usury lending, and the promotion of lending to lower income populations. If you are a member of a low income population have you ever tried to get a loan from a banking institution. So that last part is a lie. I would like to see a homeless person go into the bank and inform them that they need a loan, they would get laughed right out of the bank. Some banks actually do help the communities which they serve, some do not. (from the FDIC, a listing of failed banks, < http://www.fdic.gov/bank/individual/failed/banklist.html >) (<http://www.fdic.gov/regulations/laws/federal/8439cra2.html ) As a part of the FDIC regulations, banks are supposed to assist in their communities. Regulation of banks, if you report a bank to the FDIC, they don't do anything, I don't even know if they investigate.
And for the last question, is our financial condition stable, no. So is the Federal Reserve doing it's job and how long has it not been doing it's job?