If You Were Head of the Federal Reserve ...

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Fools have a lot to say when it comes to government policies. Depending on your own views, you might applaud or hate the Federal Reserve, and how it's navigated our country around dangerous waters. Instead of being critical, we thought we'd give you the power to bring about change ... in hypothetical form.

If you were head of the Federal Reserve, what would be your first order of business?
In case you're stuck, here are just a few areas you may want to target:

  • Our current interest rates, hovering near zero
  • The bristly beard of Ben Bernanke
  • Faux bank holding companies, including American Express (NYSE: AXP  ) , Goldman Sachs (NYSE: GS  ) , and Morgan Stanley (NYSE: MS  )
  • "Real" banks, including Bank of America (NYSE: BAC  ) , Wells Fargo (NYSE: WFC  ) , and Citigroup (NYSE: C  )
  • Something incorporating former Fed chief Paul Volcker's 6'7" stature (bonus points for Shaquille O'Neal references)
  • Horrific "diamond" puns based on JPMorgan Chase's (NYSE: JPM  ) Jamie Dimon

The best answer in the comments section below (in fewer than 250 words) will win a one-year digital subscription to Stock Advisor, our flagship investing newsletter. The contest is open until 8:00 p.m. EST on Dec. 17. A complete list of the rules is here. Enter as often as you wish.

Shine on, you crazy Dimons!

Anand Chokkavelu owns shares of Citigroup, and has apparently beaten you all to the punch with regard to awful diamond puns. You can follow him on Twitter. American Express is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (22) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 15, 2009, at 1:16 PM, crazy4swayze wrote:

    i would institute casual fridays. jeans and golf shirts could turn this thing around.

  • Report this Comment On December 15, 2009, at 1:21 PM, mrpickle0 wrote:

    1. Slowly raise interest rates (over the next several years) to combat forthcoming inflation.

    2. Stop printing excessive funny money.

    3. Urge the executive administration to begin paying down the national debt.

  • Report this Comment On December 15, 2009, at 1:22 PM, duler10 wrote:

    First...The Federal Reserve should remain a single entity, and should not be taken control of by the government. Therein we lose the necessary controls for our economy. besides, congree can not manage it's own house, much less a more complex situation.

    The Fed has done a good job, but now needs to pull some of the funds back, as banks are not lending due to a more secure investment in gov't bonds etc.

    Why would banks want to extend their risks, when they can have the security of the goverment investments

  • Report this Comment On December 15, 2009, at 1:23 PM, WizardofMe wrote:

    First thing I would do as head of the federal reserve is to switch back to the gold standard or another form of currency standard (i.e. Euro). Nobody likes it when company shares are diluted; and nobody likes it when the dollar is diluted either.

  • Report this Comment On December 15, 2009, at 1:35 PM, neskolf wrote:

    If I were head of the federal reserve, the first thing I would do is hold a press conference. After convening all of the world's major media in one place, I'd say:

    "I'm the head of the federal reserve. My institution has all of the influence that you fear. My institution does, and will continue to, manipulate markets. My institution acts with impunity, thanks to the tacit support of your so-called representatives. They know who butters their bread. My institution will raise interest rates when I say so. My institution will stop printing money when I say so. Feel free to continue to use me and my institution as whipping posts. Just know that there's not a damned thing you can do to stop us."

    With that little bit of frankness out of the way, I'd turn to different sort of frankness by bringing Barney Frank up on stage and, while the world watched, administer a blistering noogie as a display of my true power.

  • Report this Comment On December 15, 2009, at 1:48 PM, caltex1nomad wrote:

    Give myself a Big Raise and then close down the store. The economy does what it wants no matter what the Federal Reserve does !!

  • Report this Comment On December 15, 2009, at 1:49 PM, caltex1nomad wrote:

    Give myself a Big Raise and then close down the store. The economy does what it wants no matter what the Federal Reserve does !!

  • Report this Comment On December 15, 2009, at 1:52 PM, aggiewes wrote:

    I would raise the interest rates soon to avoid another bubble accruing like the last one did. Then I would tell the obama administration to stop spending money left and right the economy most go through a correction once in a while and bailing out companies just makes the correction period longer. Also it is also destroying the dollar. In order to help the economy the government must stay out of it and let companies go bankrupt.

  • Report this Comment On December 15, 2009, at 1:56 PM, KJTemplin wrote:

    "Okay Timmy, let's shut it down and go home. We can let Congress and the President deal with the fall out. They always know whats best."

  • Report this Comment On December 15, 2009, at 1:58 PM, Turfscape wrote:

    neskolf wrote:

    "by bringing Barney Frank up on stage and, while the world watched, administer a blistering noogie as a display of my true power"

    Oh, poor Barney. You just know he endured exactly that kind of thing growing up, which probably pushed him into politics.

  • Report this Comment On December 15, 2009, at 2:02 PM, catoismymotor wrote:

    I would replace all boxes of tissue, rolls of toilet paper and paper towel dispensers with boxes of cash to be used for the same purpose.

  • Report this Comment On December 15, 2009, at 2:09 PM, Desnoxvu wrote:

    I would abolish the FED and resign.

  • Report this Comment On December 15, 2009, at 3:05 PM, akeagle52 wrote:

    First rule, I would KISS it. "Keep it Simple Stupid"

    Second: I would develop a frim understanding of my limitations.

    Third: I would surround my self with advisors, that have proven they know what they are doing and that I trust.

    Fourth: My advisors and I would sit down to develop a long term plan and be prepared to make tough decisions.

    Stick to the basics. Every field from math to music is founded on a basic foundation. Finance is no different. Finance, however, is like math, you cannot change the answer with emotion. Cold logic needs to rule the day when it comes to finance. Hating or loving the answer does not change the answer. Be prepared to take the heat, some of your decisions will not be liked by anyone because it will hurt. You will get pressure from all sides, stick to the basics.

    Be ready for the long haul. In most cases it has taken decades to get where we are at, it will take time to develop a healthy Federal Reserve and economy. Do not give in to greed, and have a top notch PR team. Always tell the truth, even if it hurts.

    "Absolute Truth never changes, however our perception of truth is in constant state of change."

    S. K. Findsen

  • Report this Comment On December 15, 2009, at 3:48 PM, TurksFan wrote:

    Raise Ron Paul's interest rates.

  • Report this Comment On December 15, 2009, at 5:15 PM, lennysims wrote:

    The first thing I would do? SHUT DOWN THE FED. The gov. needs to make its own currency, just go head and tell those bankers to get screwed. That will take care of most of our debt, and of course remember to tax churches.

  • Report this Comment On December 15, 2009, at 9:21 PM, jerryguru69 wrote:

    Let Ron Paul have his little audit.

  • Report this Comment On December 15, 2009, at 11:16 PM, DebtFreeDave0 wrote:

    I would use my influence to push the federal government to do the following (because the Federal Reserve has no direct power to change any of the these):

    1. Push the Federal Government to change tax policy to encourage an increase in the production of goods and services we can export (i.e. stuff other economies want to buy from us) and stop subsidizing goods and services which nobody wants to buy from us. We must adopt to change and produce what we have a competitive advantage in, not fight it. This is the only way to fix our trade imbalance. Trade imbalance is the fundamental problem with our economy and fixing that will help reduce or eliminate our federal budget deficit in the long run from the resulting increase in tax revenues.

    2. When the economy is in a stable, healthy condition, I would push Congress to shorten the 40 hour work week gradually. This would lower the two things the Fed is generally concerned about, unemployment and inflation, which can rarely be reduced at the same time. It would lower unemployment by forcing employers to hire more people to cover the same workload. It would lower inflation because, while wages (per hour) would remain constant, hours worked would be reduced. Thus, annual salaries would be reduced. Many developed nations have average work weeks of 30-35 hours per week and there is no reason the USA can't have the same, as long as it is introduced gradually so that it didn't have a sudden impact on the economy.

  • Report this Comment On December 15, 2009, at 11:18 PM, DebtFreeDave0 wrote:

    I would use my influence to push the federal government to do the following:

    1. Push the Federal Government to change tax policy to encourage an increase in the production of goods and services we can export (i.e. stuff other economies want to buy from us) and stop subsidizing goods and services which nobody wants to buy from us. We must adopt to change and produce what we have a competitive advantage in, not fight it. This is the only way to fix our trade imbalance. Trade imbalance is the fundamental problem with our economy and fixing that will help reduce or eliminate our federal budget deficit in the long run from the resulting increase in tax revenues.

    2. When the economy is in a stable, healthy condition, I would push Congress to shorten the 40 hour work week gradually. This would lower the two things the Fed is generally concerned about, unemployment and inflation, which can rarely be reduced at the same time. It would lower unemployment by forcing employers to hire more people to cover the same workload. It would lower inflation because, while wages (per hour) would remain constant, hours worked would be reduced. Thus, annual salaries would be reduced. Many developed nations have average work weeks of 30-35 hours per week and there is no reason the USA can't have the same, as long as it is introduced gradually so that it didn't have a sudden impact on the economy.

  • Report this Comment On December 15, 2009, at 11:19 PM, DebtFreeDave0 wrote:

    sorry for the double post, my first post had more than 250 words... :)

  • Report this Comment On December 16, 2009, at 2:03 PM, eric2800 wrote:

    First thing is make a "Big Ben" clock like England but this one have the face of Ben Bernanke. At 12 noon each day it would chime and everyone in the states would go outside and blow bubbles. Because that is what easy money is going to do. Have we not learned yet. I would raise interest rates up. I would strongly urge the President and Congress to not raise taxes on small businesses. I would tell the banks if they screw up again then they will be allowed to go bankrupt. (All they had to do the first time was to stop a run on the banks). We say that we shouldn't let banks get too big but what have we really done? Just that. We have helped the big mammoth banks get bigger. And the rating agencies is a joke. I would do everything in my power to break up the ratings agencies. How can you have a system where a group rates another and is paid by said group. Why doesn't it work like FICO. If someone wants to give me credit they pay the credit agency to know. I, being the one that is being rated, does not pay.

  • Report this Comment On December 16, 2009, at 2:07 PM, eric2800 wrote:

    Every comment I post, I have to make another before I am able to see the first one. Refreshing the page after I post doesn't help.

  • Report this Comment On December 18, 2009, at 1:12 PM, ARJTurgot wrote:

    Shave, get a better haircut and one of them Goldman Sachs hotties as a mistress. I figure I'm screwing the taxpayer for them, reciprocity is in order.

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