The Federal Reserve might still be a private bankers’ club, but it’s become increasingly aggressive and experimental with policies that benefit the working class. This transformation is one of the most important facts about the U.S. economy today.

The Fed has two main jobs: price stability and full employment. Price stability – preventing inflation – is about the interests of wealthy capitalists. Full employment is about working-class people.

It used to be that the Fed always chose price stability over full employment. When I was growing up, very serious economists at the Fed believed that if you had unemployment below 6.5% or so, you’d risk inflation. That’s where they drew the line. Bad news if you were a worker.

Back in the 80’s, when Volcker was in charge, the Fed *actually engineered a recession,* causing mass unemployment in order to stop inflation. Here's a great piece about that. It's hard to imagine these days. https://nplusonemag.com/online-only/online-only/other-peoples-blood/?mc_cid=6a71b8b943&mc_eid=8434536d09

These days, that price-stability aspect of the Fed’s job has become mostly irrelevant. Inflation has simply ceased to be an issue. Instead, the Fed is all about full employment, and getting creative to make that happen. Ordinary working families are the ones who benefit.

Now, some authors believe that the Fed is increasing inequality. We could debate whether that's true. The problem is that "inequality" is a vague term. Inequality of what? Among whom?

The reason that our conversations about monetary policy are so incoherent is that we've substituted "inequality" for the well-defined and longstanding goals of the left: class struggle and full employment.

Full employment disproportionately helps the poorest workers by providing jobs for people who would otherwise be discriminated against in hiring. It provides workers the confidence to quit their jobs or risk being fired in order to stand up against discrimination and harassment.

And when people are confident on the job, they have the confidence to make demands outside the workplace as well. Historically, social movements have had the most success during periods of accommodative monetary policy, such as the 1960's.

To be clear, I don’t think the Fed has suddenly been infiltrated by Communist agents. Other central banks around the world have taken a similar approach, worrying less about inflation and more about jobs, less about investors and more about workers.

The new approach at central banks worldwide is just a response to current conditions -- to our post-inflationary world of perpetual economic crisis, where jobs are always scarce and getting scarcer. It’s not like central bankers have discovered empathy for the working class.