WHERE is the Sen. Sam Nunn for monetary policy? The Georgia Democrat is widely respected for his expert knowledge of the nation's defense policy. But there is no similar expert within Congress on the Federal Reserve System.
William Poole, a professor of economics at Brown University, believes there should be. ``I sincerely hope the Congress will assume further responsibility for Federal Reserve oversight,'' he says.
Twice a year the chairman of the Federal Reserve Board appears before congressional committees to report on Fed monetary goals and policy and answer questions. The answers are often evasive.
Compared with the grilling Congress gives administration figures on matters equally as complex as monetary policy - say, defense strategy, defense procurement, disarmament, and foreign policy - the legislature lets the Fed off easy.
Yet the Fed makes decisions on the availability of credit that basically determine whether the United States economy will boom, bust, or meander along. Some economists argue a decision to ease at a meeting this week is necessary to avoid a recession.
Because of the massive size of the economy, it is often said that the chairman of the Fed is the second most powerful man in the world after the president of the US. Fed policy affects not only the American farmer, businessman, and worker, but people around the world.
Despite this, notes Dr. Poole, ``By and large, Congress just doesn't want to touch the Fed.''
One reason for this is that probably most congressmen and congresswomen aren't too knowledgeable about the intricacies of banking and monetary policy. Poole, who was a member of President Reagan's three-man Council of Economic Advisers from 1982 to 1985, recalls a congressman showing during a committee hearing he had ``not the foggiest idea'' of the function of bank reserve requirements.
Poole holds that representatives and senators should acquire the necessary knowledge to critique Fed actions, just as they do when considering, say, foreign policy in Central America.
Another reason Congress avoids detailed oversight of the Fed is its desire to duck any responsibility for a recession. If the economy overheats and needs dampening down to reduce inflation, most members of Congress would rather have the Fed do the dirty job of imposing monetary restraint and possibly prompting a downturn.
But Poole says that as a democrat (with a small ``d''), he believes Congress should be much more involved in policies that vitally affect the nation's economic welfare.
Of course, for decades the ``independence'' of the Fed has been a sacred cow in Washington. Congress or the administration, it is argued, would always push the economy into an inflationary boom at election times if they influenced or managed monetary policy. Fed officials would much prefer to control monetary policy without political interference.
Oddly enough, it is the elected politicians who usually get blamed for largely monetary policy mistakes such as high inflation and recessions. For example, President Carter probably lost the 1980 election because the Fed allowed inflation to get out of hand in the late 1970s and then caused an economic slump as voters went to the polls.
Perhaps it is time for politicians also to take a shade more responsibility for monetary policy.