Musk Eyes Bloat at the Fed

Does our central bank really need hundreds of economists?

AP/J. Scott Applewhite
The Federal Reserve at Washington. AP/J. Scott Applewhite

It augurs well for Elon Musk’s cost-cutting instinct to see that the mogul is zeroing in on one of the most bloated payrolls in the entire government contraption — the Federal Reserve System. “The Fed is absurdly overstaffed,” is how Mr. Musk puts it on his X platform. Bloomberg News reports that the Fed has some 24,000 people on staff. Paul Volcker, now gone, alas, expressed to us a sense of incredulity at the hundreds of economists employed by the Fed.

Our own view is that the explosion of staff at the Fed is a symptom of fiat money. For a gold standard — to which America to varying degrees adhered from its founding until 1971 — is a remarkably efficient way of directing monetary policy. The dollar is defined in law as a weight of  gold, and dollars are convertible at that fixed rate in exchange for the monetary metal. The discipline of convertibility requires governments — and central banks — to run a tight ship.

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