The Engine of Instability
Why the Federal Reserve Is Failing America
The Federal Reserve sits at the epicenter of our economic turmoil, and Michael Snyder’s latest article makes a compelling case for why this institution should no longer be held in high regard. In "19 Reasons Why the Federal Reserve Is at the Heart of Our Economic Problems," Snyder outlines a sharp critique of America’s central bank and its long-standing policies that have not only destabilized the financial system but also exacerbated wealth inequality, manipulated markets, and fueled unsustainable bubbles. For those paying close attention to the trends shaping our economy, Snyder’s points are not just valid—they’re deeply concerning. His argument is part of a growing chorus of economists, commentators, and everyday citizens questioning how such a powerful institution could go so long without genuine scrutiny.
At the heart of the critique is the role the Fed plays in creating money out of thin air. Snyder argues that the Fed’s ability to conjure up trillions of dollars at will is a primary driver of inflation, debasement of the dollar, and the erosion of purchasing power for ordinary Americans. He reminds us that when the Fed prints money, it’s not just neutral monetary policy—it’s a wealth transfer mechanism that benefits Wall Street and the already wealthy, while the middle class struggles with higher prices for food, housing, and energy. The long-term impact is an inflationary cycle that diminishes the quality of life for working families, erodes savings, and destroys the financial discipline that once underpinned sound economic policy.
Another central point Snyder raises is how the Fed’s manipulation of interest rates has distorted the economy. By artificially suppressing rates for over a decade, the Fed has encouraged reckless borrowing, discouraged saving, and created asset bubbles in stocks, bonds, and real estate. When rates finally rise—as they must to fight inflation—markets reel and ordinary investors are left exposed. Snyder emphasizes that this pattern of boom and bust is no accident; it is the predictable consequence of central planning masquerading as economic stewardship. These low-rate environments have made it nearly impossible for savers and retirees to earn meaningful returns, forcing many to take on undue risk just to maintain their standard of living.
Snyder also calls attention to the Federal Reserve’s unprecedented interventions in the financial markets. From quantitative easing to emergency lending facilities, the Fed has expanded its role far beyond traditional central banking. These interventions have propped up zombie companies, kept failing institutions afloat, and enabled speculative behavior that would never survive in a truly free market. This has not only delayed the inevitable day of reckoning, but has also eroded trust in the very foundations of capitalism. The very concept of market discipline has been undermined, replaced by an economy that depends on constant Fed support to stay afloat.
Perhaps most damning is Snyder’s reminder that the Fed is not a government agency—it is a private institution run by unelected officials who are not accountable to the American people. While it wields immense power over our economic lives, it operates behind closed doors and often acts in the interest of large financial institutions rather than the public. This lack of transparency and accountability makes it a threat to both democracy and economic stability. It’s deeply unsettling to consider that such a powerful institution can make sweeping economic decisions that impact millions, all without the consent or oversight of the citizens it affects.
Snyder’s article also dives into the moral hazard the Fed creates by bailing out failure and punishing prudence. Time and time again, those who take excessive risks are rescued by monetary policy, while savers and responsible investors are left behind. This breeds a system where speculation is rewarded and discipline is ignored—hardly a recipe for long-term prosperity. It’s no wonder that trust in financial institutions continues to erode. The repeated pattern of crisis and bailout teaches markets that no matter how irresponsible the behavior, the Fed will always step in to soften the blow, reinforcing a culture of dependency and financial recklessness.
In addition to economic and financial consequences, the Fed’s policies have far-reaching societal effects. By amplifying wealth inequality, they contribute to social division, political polarization, and the weakening of the middle class. Snyder suggests that the Fed’s policies aren’t just misguided; they are harmful to the foundational fabric of American society. As the wealth gap widens and younger generations find it harder to afford homes, education, or even basic healthcare, questions about the fairness and integrity of the system become louder and more insistent.
