![[Home]](http://www.bayleshanks.com/cartoonbayle.png)
here is my programme for the reorganization of the Fed:
1. Remove discretion in setting rates. Use a Taylor rule instead (http://en.wikipedia.org/wiki/Taylor_rule *). Write the rule into law.
2. By constitutional law, prohibit congress from adding "special cases" to the rate-setting rule which make reference (implicitly or explicitly) to particular times. Congress may change the rate-setting rule by a supermajority vote, provided the new rule is generic -- but new rules only come into effect when four years have passed after the most recent change to the rule.
3. Abolish primary dealers and implement open auctions, etc, instead.
4. Transfer the banking regulatory function and the banking stability function of the Fed to a different regulatory agency (the Fed's function would still include the execution of monetary policy and transaction clearing -- but no longer the setting of monetary policy or the regulation and stabilization of banks).
5a. Abolish the public-private structure of the Fed
5b. ... and make it an ordinary executive branch agency.
6. More intense audit.
There are various dependencies and not all subsets of these reforms would be a good idea by themselves.
