Will DeSantis abolish the Federal Reserve’s dual mandate like Pence and Ramaswamy?
Tiana Lowe Doescher
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As a part of the much-hyped reboot of his presidential campaign, Gov. Ron DeSantis (R-FL) finally unveiled a first draft of his economic agenda, branded the “Declaration of Economic Independence.” While fiscal conservatives may be disappointed by the plan’s lack of detail in how the governor would tackle the behemoth of federal spending, DeSantis did finally touch on his monetary policy.
“DeSantis will appoint a Chairman of the Federal Reserve who will focus on maintaining a stable dollar instead of the political pressures of the day,” his campaign website announced. “The Fed must focus on stable prices; it is not a social engineer and cannot be allowed to be an unaccountable economic central planner.”
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But DeSantis’s focus on the Federal Reserve essentially ends there. While he insinuates he will use executive fiat to replace Chairman Jerome Powell, whose term expires in 2028, DeSantis stops short of promising to work with Congress to address the elephant in the room: the dual mandate.
Under existing law, the Fed is legally required to prioritize two goals: price stability and maximizing employment. While Powell has been a longtime proponent of the Phillips Curve, which dictates that keeping prices stable and attaining full employment are diametrically opposed goals, both the pre-COVID economic growth under former President Donald Trump and the Fed’s current rate hike campaigns have defied that maxim, in large part because a rapidly aging society like ours means that we’re increasingly desperate for workers, not job vacancies.
Two of the major GOP presidential hopefuls have pledged to abolish the dual mandate. Former Vice President Mike Pence, who first teased his willingness to abolish the Federal Reserve’s dual mandate during an exclusive interview with the Washington Examiner, would replace the dual mandate with the sole mandate of stable interest rates. Biotech entrepreneur Vivek Ramaswamy would replace the dual mandate with the goal of price stability, pegging the dollar to a basket of commodities, including gold, silver, nickel, and a range of agricultural commodities.
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DeSantis seems to be aligning himself with Ramaswamy’s proposal, but he doesn’t actually commit to working with Congress to make any modifications to the dual mandate legally binding.
On the positive front, DeSantis pledges to oppose the sort of bailouts granted to Silicon Valley Bank and mandate work requirements for welfare programs. But rather than address the real culprit hindering economic growth (namely, exploding entitlement costs crowding out private investment and savings), DeSantis spends more time railing against the “elites.”