Macro Musings with David Beckworth · Mercatus Center at George Mason University

Andy Levin on Holding the Fed Accountable

April 28, 2025·59 min·5 clips

The Federal Reserve is secretly building a Versailles-like palace on the National Mall at a staggering $2.5 billion cost.

This episode of Macro Musings features host David Beckworth and guest Andy Levin, a Dartmouth economics professor and former 20-year Federal Reserve veteran with advisory roles at central banks like the Bank of England. Levin discusses his new Mercatus policy brief examining whether the Federal Reserve is overstaffed or overworked, using publicly available financial data. The conversation centers on the Fed's unique lack of external oversight compared to other U.S. agencies and global central banks. Levin's analysis shows Federal Reserve Bank employment has grown 25% and Board employment 17% since 2010, while other large federal agencies have shrunk. He notes the Fed's building upgrade projects have skyrocketed to $2.5 billion since 2018, including a historic property purchased from the GSA for $41 million. The Fed operates without a fully independent inspector general or regular GAO reviews, unlike institutions like the ECB or Bank of England which welcome external audits. Levin references Senator Elizabeth Warren and Rick Scott's failed bipartisan bill to establish an independent Fed IG, which the Fed opposed. A striking claim is that Federal Reserve Bank presidents now earn about $450,000 annually, more than the U.S. President, Treasury Secretary, or federal judges. Levin's comparison shows the Fed's Chief Financial Officer earns nearly double the Treasury Department's CFO, despite Treasury having over 30 times more employees. He describes the Fed's headquarters expansion as building a "palace on the mall," with plans for glass atriums and rooftop gardens. Levin argues the Fed's current IG resigned on April 1st without a press release or media coverage, highlighting transparency issues. He contrasts the Fed's approach with the Bank of England, which had pre-approval from the UK government for asset purchase risks. Levin suggests legacy media reporters covering the Fed are often deferential to maintain access, creating an information vacuum filled by podcasts and blogs. He emphasizes the Fed is a congressional creation, not a "fourth branch of government," and that accountability strengthens its legitimacy. The tone is analytical and conversational, blending Levin's insider expertise with Beckworth's structured interviewing. This episode appeals to listeners interested in central bank transparency, government accountability, and Federal Reserve reform. Those seeking purely technical monetary policy discussions or who prefer not to critique Fed governance might find it less engaging.

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