Heritage Expert Testifies on the Need to Renew The Feds Focus on Main Street America


Heritage Expert Testifies on the Need to Renew The Feds Focus on Main Street America

July 14th, 2017

Norbert Michel, senior research fellow at The Heritage Foundation

A renowned expert on financial markets stressed the importance of Federal Reserve before with the House Subcommittee on Monetary Policy and Trade today. 

“The Fed’s misguided policies have long distorted prices and interest rates, thus causing people to misallocate resources in ways that have exacerbated business cycles,” said Norbert Michel, a senior research fellow at The Heritage Foundation. 

Michel has studied financial regulation and monetary policy for well over a decade, focusing on cultivating a fair and balanced economy. He believes that the central issue surrounding the federal monetary policy is the lack of focus on serving main-street America. 

“The Fed has essentially been paying large financial institutions to refrain from lending to Main Street businesses by paying them risk-free interest to sit on cash,” said Michel in his written testimony.  

“These policies may very well have artificially boosted equity prices, thus sowing the seeds for another major disruption that could further damage the retirement savings of Main Street’s workers.” 

Michel also adds that the Fed bears some responsibility for the housing crash and its collateral damage, namely massive unemployment, millions of home foreclosures, and billions of dollars in lost wealth. 

According to Michel, since the Fed was established, the frequency of recessions and the length of recovery time from economic hardships have not decreased, though this is the main goal of the Federal Reserve.

Michel has testified before Congress three times this year on reforming financial services. You can read more of his research on his Heritage.org profile.