Biden’s ‘whole of government’ overhaul of federal agencies undermines their purpose

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Most of us face a choice: do a few things reasonably well or many things poorly. The same goes for federal regulators. And that’s why each regulatory agency was created with a focus — on environmental quality, education goals, health policy, and so on. But now the Biden administration has upended that focus, directing agencies to take a ”whole-of-government” approach to make every policy comply with goals on climate change and social justice — regardless of the relevance or downsides.

First, the whole-of-government approach sets regulators up for failure. It distracts agencies from their missions and piles on additional duties outside of their expertise. We’ve seen this happen before. The Federal Reserve, for example, could easily keep inflation low if that was its only mission. But in 1977, during Carter-era stagflation, it was given a second mission: to keep unemployment low. That prompts the Fed to sometimes undermine its inflation goals in favor of its employment goals. Namely, it raises inflation during downturns—which contradicts its low-inflation mandate.

And that dual mandate is why the Fed went into stimulus overkill when COVID-19 hit. It grew the money supply by 40 percent over two years, which caused most of today’s rapid inflation. Now the Fed will be cleaning up its mess well into next year, with all of us paying the price through high inflation and a possible recession anyway. Better to stick to one job.

Read the full article at The Hill.