Today’s dim jobs report, and the attendant fretting that the Federal Reserve has waited too long to start cutting interest rates, are a moment to mark the challenge — incoherence, even — posed by the central bank’s “dual mandate.” This Cerberus-like law gives the Fed two different, and sometimes contradictory aims: “price stability” and “full employment.” Far better for the Fed to focus on honest money, which sets the stage for the job market to flourish.

Lest our long-suffering readers suppose that we are preparing to launch ourselves into another right-wing diatribe, feature this. The legislation adding the employment mandate to the burdens of the Federal Reserve was opposed, when it was enacted in 1978, not only by us right-wingers but by the New York Times. It called the bill, known as the Full Employment and Balanced Growth Act, or Humphrey-Hawkins for short, a “hollow promise.” 

That was in November 1977. It was, warned the Times, “a gesture from a Government overly enchanted with symbols, a promise from a Government that should mind its promises, a flag for politicians to wave when next they need to demonstrate concern for the unemployed. It will not, however, solve the nation’s unemployment problem.” It would turn out that the Times was just getting warmed up.

Three months later, in February 1978, the Grey Lady issued an editorial which went beyond calling it a hollow promise and concluded that it was a “cruel hoax.” That was the name of its editorial, “The Cruel Hoax of Humphrey Hawkins.” It’s just a remarkable read looking back these two generations to see what the paper was like before it had its craniotomy in which leftist monetary policy was installed in the Grey Lady’s skull.

“America’s economic dilemma,” the Grey Lady reckoned back then, “is not so much the lack of a low unemployment goal as the lack of both the will and the way to reach that goal. A failure of will led the President last year to abandon his plan for a $50 tax rebate, which would have brought about a welcome lowering of unemployment without serious risk of greater inflation. But the President sensed a want of national concern and at the last minute canceled the plan.”

Imagine, the Times backing a tax rebate. Humphrey-Hawkins, the Grey Lady went on, “would legislate wishful thinking.” It noted “the riddle no one can answer”: how to lower unemployment  “without triggering worse inflation and, perhaps, an accompanying deep recession.” It was “a promise that no one knows how to keep,” the Times said, decrying the “cruel hoax” on the unemployed, “holding before them the hope — but not the reality — of a job.”

What’s past is prologue. Unemployment’s jump to 4.3 percent in July, from 4.1 percent, and a hiring slowdown to 114,000 — almost half of the average over the past year — shows the Fed’s dilemma. It “is likely to raise concerns that the Fed has waited too long to begin cutting rates,” today’s Times reports, “and that it might be getting behind the curve.” That means “allowing the job market to slow,” the Times frets, “in a way that will be hard to stall or reverse.”

The dual mandate puts the Fed in a position not unlike a game of Whac-a-Mole. When inflation soared to 9 percent, the central bank had to scramble to raise interest rates in an effort to bring price increases down. Yet inflation is still running at a pace — 3 percent — that is 50 percent higher than the Fed’s target. Now that unemployment shows signs of rising, the central bank faces pressure to relent on the inflation fight to salvage the job market.

Malarkey, we say. Adding a degree of volatility to the Fed’s deliberations is the presidential election. As these columns have observed, the nominally independent Fed is already under scrutiny over the timing of any potential interest rate cuts benefiting either the GOP or the Democratic nominee. It places the unemployed at odds with savers and Americans enraged by soaring prices, and puts Chairman Powell in an unenviable spot. Talk about a cruel hoax.