Why Debates Over the Fed's Interest Rate Miss the Point

By Richard D. Wolff, Truthout | News Analysis

Sometimes public debates focus on important social issues; at other times, debates distract from them. Disputes over whether the Federal Reserve System should raise interest rates illustrate that second sort. Yes, "serious people" take strong positions for or against interest rate hikes. They sharply question one another's motives to spice up what passes for mainstream media economic news. But it is not the debate we could and should have, not even close.

Both sides of that debate celebrate capitalism. They differ only on how best to have government serve the reproduction of capitalism: by leaving it alone, by intervening intensely or somewhere in between. These days they hassle over raising, lowering or leaving interest rates unchanged. The possibility that capitalism - rather than the Fed or interest rates - might be the problem troubles none of these folks. It does not occur to them. Nor is that surprising given the monotonous mantra of academic economics departments and the journalists and politicians trained by them. The orthodox economics professoriate treats capitalism as so wonderful and "optimal" (among their favorite words) that questioning it brings only the momentary scowl of a teacher/priest dismayed by a student's/acolyte's failure to grasp essential, universal, absolute truth.