Former US Senator Augustus Hawkins died in November 2007. It may seem superstitious to superimpose meaning on the timing, but maybe the only way it wouldn’t was if he had passed right on August 9 of that year.
When I think of Humphrey-Hawkins, I don’t think of it at all as the vast majority seems to. I remain struck by what’s missing from it. For most, this seemingly archaic law is nothing more a required bit of theatrics. Twice each year the Chairman of the Federal Reserve is obligated by it to go up to Capitol Hill and report to Congress on the country’s economic situation.
The law doesn’t differentiate, however. In other words, it has nothing to say about whether or not the Federal Reserve Chairman is the right person for the task – whomever that Chairman might be at any given moment. It seemed the correct structure in 1978 when it became law because everything that was wrong with the economy during the seventies was easily laid at the central bank’s door. Why not force him, or her, to answer for it?
Thus, when I conceive of Humphrey Hawkins I consider what isn’t in it any longer. I occasionally give a relatively simple background presentation of eurodollar history as an introduction into the shadows of the modern monetary age. A central piece of it is the Full Employment and Balanced Growth Act of 1978, or what has become known as Humphrey-Hawkins, not really because of the specifics of the bill but because of the general propositions that made it what it was in the increasingly distant past.
As I say:
It was at one time common knowledge that money and economy were inseparable, for how could it be otherwise? In the seventies even the US Congress, let me repeat that, even the United States Congress recognized money and economy as intricately linked… In its original form, though, the law was far more than that. It also required, among other things, the Fed to prepare and maintain monetary targets. Again, even Congress realized the connection between money and economy, or, more appropriately, monetary dysfunction and grave economic dysfunction.