Twelve Federal Reserves

 One of the potential ways of rehabilitating at least part of our economy is to force the Fed to be what it was supposed to, if I remember the concept correctly.  Of course, the main call to do anything to the Federal Reserve in recent years has been to end it- an idea I am partial to, but I have worries about who ends up essentially controlling the U.S. Dollar if we don't in some way.  

The Fed is comprised of 12 regional banks, and they should be setting policies based on the needs of their individual regions.  The venture capitalist era in California, inflated asset prices on Wall Street- most of the money goes to big players.  Then, when they decide to raise the interest rate- they are rather obviously trying to effect the people- they focused on making people lose their jobs.

But what if there were 12 independent reserve banks?

NY sees the inflation in the stock market and sets its rates higher.  Meanwhile, another reserve bank is in a region where the cost of living is cheaper, and it seems clear there is room for actual productivity rather than glorified casino games.  Not only will the people in the poorer region benefit from the lower rate, but it also incentivizes the East and West Coast financiers to start projects in the poorer region.  It would have a decentralizing effect.

Incidentally, a micro-version of this problem lies in Korea.  Seoul is so absolutely dominant that everyone wants to live in Seoul, but housing prices have risen to insane levels.  This is one of the reasons their fertility rates are so low- they feel it necessary to live in Seoul, but the prices are so high, the idea of having children there seems absurd.  Similar issues in Japan, Singapore, etc...

The big cities are good to have if people are going to the big city, making money, finding a compatible spouse, and then returning to a location more suitable for raising children.  If people feel stuck in the city, well, it seldom encourages large families.  

But these economies ultimately need families as they are little better than ponzi schemes, given that they are based on forever growth, and, ultimately, the only way you get real growth is with more people.  It would be good to fix the economy so it wasn't so directly dependent on growth, but that's going to take a bit more time to fix.  Since we have an economy so heavily based on debt, price signals are more than a bit fuzzy right now.  

I think this was the way the Fed was originally conceived.  I suspect it is more politically feasible to reform it along the lines of its original charter than it is to end it.  We haven't even been able to audit it.  But there are likely legal means to force it to behave as it was conceived.