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This chapter discusses the Fed's development and communication of monetary policy. It asks what the institutional structure for monetary policy decisions is and looks at what material is provided to the Federal Open Market Committee for discussion of the economic outlook. It asks questions such as: what material is provided to help the Committee form its monetary policy decision? How do Committee members conduct their discussion of the economy and monetary policy? And what, in general, are the main influences on the Fed's policy decision? It considers how Committee members frame and communicate their decision about policy and how influential the chairman in the policy votes is. Finally it asks: why has the Fed become much more open about policy in recent decades? Can there be too much openness?

This chapter provides an overview of the Fed's policy structure. It addresses the following questions: Where does responsibility for monetary policy decisions reside in the Fed? What does the Federal Open Market Committee do and how is it organized? And how are other monetary policy instruments controlled? It also looks at how the politically appointed Board of Governors is chosen, how the Reserve Banks is governed, and the role of the Reserve Banks in the policy process. It also asks: should the regional structure of the Fed be modified for today's world? Should Reserve Bank presidents be politically appointed? Do member banks and directors of Federal Reserve Banks unduly profit or exert influence? It also examines what happens to the profits from Fed operations, the underlying connection between the government and the Fed, and how the government keeps tabs on the Fed. What does it mean in practice to say the Fed is independent?

This chapter draws attention to the liberal-rationalist image of representation and explains how this embodies the politics of government advisory committees. The discussion continues with reference to the fair balance provision of the Federal Advisory Committee Act (FACA), which is the key constitution dominating the composition of such committees in the United States. The chapter also highlights the advisory committee guidelines, which provide insight into how agency authorities, public representatives, and other civil servants understand the concept of representation and its key role in government advisory committees. The chapter closes with a detailed discussion on the two widespread but mistaken assumptions in the implementation of FACA: experts do not have interests and representatives do not have expertise.

This chapter examines the formation of the various committees of the newly formed sovereign state of Mississippi, and the problems that followed the creation of those committees. Following the secession, the delegates shifted their attention to politics, economics, law, and society. The change made up the “second phase” of the Mississippi Secession Convention. They looked into what actions to take to make sure Mississippi was able to take care of itself, whether alone or in a new confederacy. On the span of three days, January 10–12, President William Barry established the following standing committees: Committee on Citizenship in Mississippi, Committee on Federal Jurisdiction and Property, Committee on Postal, Financial and Commercial Affairs, Committee on the State Constitution, Committee on Military and Naval Affairs, and Committee on Southern Confederacy. Yet no sooner had Barry appointed the committees than the delegates began to offer their own resolutions apart from any committee's oversight.

This chapter discusses the Fed's monetary instruments. It looks at how the Fed's monetary instruments are employed in the policy process, which of the Fed's instruments are most significant for implementing policy, how open market operations are employed in policy implementation, and how the federal funds rate connects with money market conditions in general. It considers how the funds rate decisions affect other credit markets and how key borrowers respond to changed market conditions. In addition, it asks: how do Federal Open Market Committee policy decisions adapt to market uncertainties? How do open market operations avoid creating too much money and inflation? And does the money market itself influence spending or is it mostly a policy conduit? Perhaps the Fed's powers are also used to influence the government securities market.

On July 5, 1803, Captain Meriwether Lewis of the First Infantry left Washington, D.C., and headed west. His destination was St. Louis, Missouri, where he was to take command, with his good friend William Clark, of the aptly named Corps of Discovery. President Thomas Jefferson had long dreamed of exploring the West, and on the day before Lewis set out from the capital, Jefferson doubled the size of the country, purchasing 820,000 square miles from France for 3 cents an acre. Jefferson planned the expedition partly to expand commerce in the young nation—he sought the “Northwest Passage,” a water route from coast to coast—but, just as important, to further scientific understanding. Lewis shared with his commander in chief a deep curiosity about the natural world, and the expedition set out with a presidential charge to discover the flora and fauna of the United States. Jefferson, as talented a scientist as has ever held the office of president, introduced Lewis to the leading natural scientists of the day, and they trained him to collect samples of plants and animals. Jefferson instructed the two commanders to record everything they could about the countryside—“the soil and face of the country, its growth and vegetable productions . . . the animals of the country . . . the remains and accounts of any which may be deemed rare or extinct,” he said. And so they did, plainly but accurately. Jefferson’s personal library, one of the largest collections in the country and later the nucleus of the Library of Congress, included copies of works by Linnaeus and John Bartram, along with many other scientific texts. Meriwether Lewis served as Jefferson’s private secretary for two years before leading the expedition west, and Jefferson undoubtedly introduced his protégé to those works. The Corps of Discovery, like the Bartrams and Peter Kalm, played an important role in the ongoing effort to document the natural heritage of the United States.