Famed investor Ray Dalio makes the case in How Countries Go Broke that the United States government is too heavily indebted and that significant changes to spending, taxes, and interest rates all need to be made, and soon, to save us from looming fiscal catastrophe.

This position is mostly uncontroversial outside of the halls of Congress, and practically the conventional wisdom in most economic policy circles today. Yet Dalio’s approach to making this argument is prefaced by almost 400 pages of intellectual empire-building and chart-making. This approach turns what could have been a tightly argued Substack essay into a quasi-memoir/manifesto.  

Dalio’s business thought-leader status is currently quite secure. He has written multiple books on similar themes over the last several years, including Principles: Life & Work (2017), Principles for Navigating Big Debt Crises (2018), and Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail (2021). He also maintains a website, principles.com, which collects his various writings, a recording of his 2017 TED talk, a series of 30-minute animated videos based on his writings, and the Dalio Market Principles self-study course, among other materials. He clearly considers himself to be a principled guru of sorts, and he has the stats to prove it – his books have been bestsellers, translated into multiple languages, and widely reviewed and discussed. His testimonials page overflows with praise from former cabinet secretaries, CEOs, and fellow celebrity authors.  

His body of work is based on the principles that guide the management and business practices at his investment firm, Bridgewater Associates, as well as his own related theories about world history, culture, and economics. This is an unusual blend in the world of business publishing. Most successful CEOs who write books tend to stick to self-help advice for young professionals and aspiring entrepreneurs rather than branching out into master theories covering thousands of years of world historical dynamics, but Dalio is nothing if not an ambitious thinker.  

His status as the enlightened despot of Bridgewater has generated its own share of myths and legends over the years, with many journalists, investigators, and former employees using terms like “cult,” “cult-like,” and “cult leader” to describe Dalio’s management style. He has extremely specific ideas about how things should be done and has an almost unlimited ability to impose conformity with those ideas within the firm that he founded.  Bridgewater reportedly has highly specific and aggressively enforced standards for workplace conduct and subjects its employees to idiosyncratic surveillance and accountability practices. 

Dalio and Bridgewater have plenty of defenders, of course, and the firm has been extremely successful. Forbes estimates Dalio’s net worth to be over $14 billion. Dalio’s much-remarked-upon internal management theories inform an understanding about his systematic thinking on public affairs in How Countries Go Broke. 

The tone of his latest book takes some getting used to. It ricochets between the absolute certainty of a messiah figure who has discovered the innermost secrets of the universe to the shrugging dismissal of a guy who is just asking questions. Dalio emphasizes his long study of historical cycles in economic affairs. He claims to have identified certain patterns that can help us understand our current times and even predict the future. His certainty is sufficient for him to refer, several times, to his theories with phrases like “timeless and universal truths” and “timeless and universal mechanics and principles.” Dalio is, in general, very confident that he has identified important patterns in human affairs that have eluded lesser observers and that readers would be foolish to ignore.  

At other times, however, he yields his status as knower of timeless and universal truths, with statements like “…what I don’t know is much greater than what I do know.” He offers a detailed analysis, for example, of the global power dynamics between the United States, the People’s Republic of China, and Taiwan, only to sum it up with the statement “Keep in mind that while that is what I think about the world’s geopolitical order, I’m not sure of anything.” That may be an admission of admirable modesty, but it rather undermines the urgency of some of his claims.  

While Dalio holds forth on a broad range of topics relating to history, government, economics, and culture, How Countries Go Broke is primarily about government debt, and students of monetary policy will no doubt be very interested in the analysis presented. He points out that in many previous cases of rising government debt, central governments and finance ministries around the world have had recourse to the same tools for debt management. Total indebtedness has frequently risen over multiple decades, until a crisis emerges and the existing regime for issuing, valuing, and monetizing debt breaks down. Post-crisis, a new system emerges.  

Governments tend to shortsightedly load up on debt until they eventually default. Dalio presents many data points and charts showing parallel examples through the last few hundred years that suggest a more predictable cycle than most observers might initially imagine. Because the cycle of debt and default (and the attendant financial pain that comes with that process) is reasonably predictable, the book’s warning comes at a particularly timely moment. According to the Dalio timeline, we’re dangerously close to the moment we should be expecting a US debt-overload meltdown. 

As with many public intellectuals outside government, the real purpose of Dalio’s book seems to be to persuade those with power – the Federal Reserve chairman, the president, and members of Congress – to adopt a wise course of policy action before the looming disaster strikes. He advises higher taxes, lower spending, and lower interest rates. There are many books with such a formula. The odd angle with How Countries Go Broke, though, is that Dalio’s own eccentric theory of human civilization might make his entire book moot. 

The reader is repeatedly reminded that cycles of government debt, which Dalio calls the Big Debt Cycle, as well as the grand civilizational cycle by which empires rise and fall, which he terms the Overall Big Cycle, are something akin to iron laws. They are detectable and predictable precisely because they do not vary once they have begun. By the end of the book, Dalio reveals that he actually believes in a highly deterministic universe in which relatively little responds to the will of individual human beings.  

He considers the forces that govern human society to be a kind of “perpetual motion machine” that functions the same across the centuries and around the globe. By the final chapter, he pushes this view even further, saying that “everything (other than the quantum world) is predestined” and that the only thing stopping human beings from essentially knowing the future is an insufficiently detailed model of causes and effects – something he expects to “get much closer to achieving” using the tools of artificial intelligence.    

Dalio believes that economic affairs are basically “mechanical” – moving forward in a fixed way, like a set of interlocking machine parts. But if the Big Debt Cycle is literally inevitable (as discovered by Dalio’s own scholarship), then why write a book about how the US needs to avoid public debt in the first place? When giving his specific policy recommendations about taxes, spending, and interest rates, he seems to suggest, like most policy advocates, that his preferred policies can make the difference between prosperity and disaster. But that seems to be at odds with his fatalistic assumptions about how the boom-and-bust rollercoaster of government debt actually works.    

Presumably, Dalio’s theory of free will extends to his own smart investing choices that have made him, and many of his clients, rich. But a world that actually worked in the way he describes it would seem to leave little room for guiding major world historical events like currency collapses and global recessions. One also wonders how often Dalio’s galaxy-brain theorizing is challenged by those closest to him, since his most frequent collaborators are his own employees, whose professional futures are subject entirely to his managerial discretion as Bridgewater’s founder.  

No commentary on How Countries Go Broke would be complete without mentioning the book’s unusual layout. In a strategy that seems inspired by modern productivity-maximizing tools, the book’s text is sometimes presented as normal, sometimes in blocks of bold, and sometimes (for the most important insights) in passages that are bolded, italicized, and preceded by a red dot. Unlike most authors who restrict their formatting emphasis to a single bolded or italicized phrase, Dalio’s text often runs to entire paragraphs in bold, sometimes with multiple pages almost entirely set off with emphatic formatting. Each chapter also comes with specific advice for engaging with it, with readers alternately advised to skip, browse, or attend closely, depending on their expectations and education levels. While obviously meant to be helpful, this overload of visual and narrative cues is ultimately a distracting gimmick that retards, rather than enhances, the reader’s focus.  

Then again, it’s possible that effect was simply part of the inevitable mechanism of history at work.

Joseph Schumpeter famously said that creative destruction is the “essential fact about capitalism.”  Entrepreneurs are the moving force in Schumpeter’s drama, but they are victims as often as heroes. The reason is that having an idea is not enough; you have to make it work in the marketplace. The invention of ideas, and the fast borrowing of those ideas, reflect both the destruction and the creation of Schumpeter’s insight. Or, as Milton Friedman often said, capitalism is a system of profit and loss; the “and loss” part is important.

This truth is put in sharp relief by the story of the McDonald’s “Happy Meal,” a tale of innovation, theft, and Count Fangburger.  In America, there are few childhood icons more deeply felt than the cheerful red box, branded toys, and child-sized portions, especially the (let’s be honest) French fries. But behind that cheerful cardboard is a real tale of creation, and destruction: RIP, Count Fangburger.

There are three narratives that one might deploy to explain the origins of the Happy Meal, and I’m going to present all three. The first begins in Guatemala in the mid-1970s; for some reason, this one has become dominant, perhaps because it smacks of the “colonial oppression” stories so popular in faculty lounges and hipster coffee shops. 

The second, and more historically tenable, account begins with a rival fast-food chain called Burger Chef, which claimed (correctly) that McDonald’s had mimicked their packaging idea. The third, and even more correct, view holds that this kind of creative borrowing is a normal, even essential, part of capitalist creation, and destruction. 

All three narratives are in some sense true, of course. But the real story of the Happy Meal is one of convergence, competition, and creative imitation — a tale as much about economics as about hamburgers.

Yolanda Fernández de Cofiño and the “Menú Ronald”

In 1974, Yolanda Fernández de Cofiño and her husband José María Cofiño acquired the first McDonald’s franchise in Guatemala, located in Zone 1 of Guatemala City. The Cofiños quickly noticed a problem: families visiting their restaurant often found that the standard McDonald’s portions were too large for their young children. Rather than simply shrink existing meals, Yolanda had a more creative solution.

“She created what she called the ‘Menú Ronald’ — a kid-sized meal with a small burger, fries, drink, a sundae, and a toy,” writes Katarina Hall in Reason magazine’s 2025 summer issue. Rather than wait for corporate approval, Fernández de Cofiño took matters into her own hands. She purchased small toys from local Guatemalan markets and packaged them in a child-friendly meal designed specifically for young customers. The innovation was not simply a smaller portion, but a tailored experience: food, fun, and a sense of being important.

This localized creation was an immediate success in Guatemala. But its influence would soon go much further. As Hall notes, the Menú Ronald “was not the product of a structured research team or marketing department, but of observation, care, and resourcefulness.” In time, word of its success made its way to McDonald’s corporate headquarters in the United States.

By the mid-1970s, McDonald’s was actively looking for ways to capture the attention of younger customers. Company executives had taken note of how breakfast cereal brands were marketing to kids through toys, mascots, and collectible items. When the seed of Fernández de Cofiño’s idea reached headquarters in Chicago, it landed in fertile ground, and sprouted into a corporate initiative in 1977, opening in a limited market (Kansas City), and then quickly spreading nationwide.

At least, that is the story McDonald’s tells the world. There is (record scratch!) another story.

Burger Chef: Creation, then Destruction

Burger Chef had been founded as a burger and fries restaurant, a rival of McDonald’s, in 1954. Headquartered in Indianapolis, founders Frank and Donald Thomas (no relation to Wendy’s Dave Thomas, though it’s a good story) had grown the Burger Chef franchise to more than 1,200 locations — second only to McDonald’s in the US. Burger Chef and McDonald’s were very aware of each other, and they were watching each other.

A big part of the reason for that watchfulness was that Burger Chef had always been an innovator. Years before McDonald’s introduced the Big Mac, Burger Chef had launched the Big Shef, a double-decker burger that one could describe as “two all-beef patties, special sauce, lettuce, and cheese on a sesame seed bun.” It also developed an imaginative cast of cartoon mascots — including Burger Chef & Jeff, Count Fangburger, Burgerini the magician, Burgerilla the talking ape, and Cackleburger the witch — decades before the Ronald McDonald’s cartoon universe was developed into the McDonaldland characters.

But the biggest and most important marketing idea came in 1973: the Fun Meal, the first prepackaged meal specifically designed for children. The idea evolved from a 1972 offering called the “Funburger,” a child-sized portion, which featured a burger in puzzle-covered packaging and a small toy — two full years before Ms. Fernández had the same idea in Guatemala. The full Fun Meal launched a year later and included a hamburger, fries, drink, cookie, and a toy — all packaged in a colorful, game-filled box featuring Burger Chef’s cartoon characters.

This was not merely a meal; it was a branded, immersive experience. As The Indianapolis Star reported, the Fun Meal “transformed dinnertime into entertainment for children.” It became a defining feature of Burger Chef’s brand.

(Full disclosure: I was a night manager at a Burger Chef for two years, and I would estimate that I unboxed and folded more than 10,000 Fun Meal boxes during those evenings.  I can personally attest that by the summer of 1977 Fun Meals were fully distributed at thousands of Burger Chefs nationwide, and were very popular for children, long before McDonald’s had Happy Meals. Furthermore, the “Works Bar,” a place where you could add lettuce, tomato, onions, pickles and other things to your burger, was a work of innovative genius.)

Of course, here comes McDonald’s:  “Something something food for kids, something Guatemala….” Look, regardless of what Ms. Fernández de Cofiño did or didn’t do, the similarities between the Fun Meal and the “new” Happy Meal were impossible to ignore: a burger, fries, drink, toy, and a box decorated with puzzles, games, and cartoon characters. Sure, they were different cartoon characters, but this was clearly just corporate theft.

Burger Chef responded by filing a federal lawsuit, accusing McDonald’s of trademark infringement and unfair competition. The company argued that McDonald’s had copied not only the idea of a bundled kids’ meal, but its exact format, marketing structure, and even its packaging concept, with slightly different cartoons.

The late ‘70s were a time when consumer advocates, right or wrong, were looking for a chance to strike a blow against corporate power. Legal experts viewed the case as a rare and important challenge by a smaller innovator against a corporate giant. But….wait. Burger Chef had failed to formally trademark or patent key elements of the Fun Meal. The court ultimately dismissed the case, ruling that the concept of bundling food with toys in child-oriented packaging was too broad to be protected as intellectual property.  (Besides, Cracker Jack wants a word…)

As Elpack.co.uk reports: “The lawsuit was ultimately dismissed… The idea of bundling food with toys and child-themed packaging was deemed too generic to merit legal protection.” The courts found no legal wrongdoing. But the ruling was a devastating blow for Burger Chef.

Already struggling with corporate mismanagement, over-expansion, and competition from McDonald’s selling Happy Meals, Burger Chef never recovered. In 1982, General Foods sold the brand to Imasco, the Canadian parent of Hardee’s. Most Burger Chef locations were converted to Hardee’s stores or shuttered entirely. By 1996, the last Burger Chef closed its doors.

The Nature of Capitalist Innovation — Imitation and Improvement

So, who invented the Happy Meal? And does it matter?

Yolanda Fernández de Cofiño really did have a good idea, adapting a children’s menu for Guatemalan families. More people bought meals as a result, a lot more. But Burger Chef really did conceive and produce a whimsical, folded box Fun Meal with cartoons and puzzles printed on the box, and with child-sized portions, and it was fully in operation across the US years earlier.  On the other hand, McDonald’s marketing executive Bob Bernstein really did gather together the pieces, and took a huge gamble on marketing the Happy Meal, going all in on the concept, the packaging, and the (new) cartoon characters, combining the parts into a nationally scalable product.

The answer is that it doesn’t really matter now, though of course it mattered to the participants at the time. The complexity of innovation, and the ability to adopt and adapt innovations we see around us, is the real essence of creative destruction. McDonald’s did not destroy Burger Chef; that was the logic of profit and loss. But the innovations Burger Chef brought to the market changed the business in ways that now seem essential: all of us younger than about 60 remember Happy Meals at McDonald’s as a rite of childhood.

Rather than undermining the validity of the Happy Meal’s story, this multiplicity highlights something crucial about how capitalist innovation works. In a market system, ideas are rarely born perfect and complete. Rather, parts are borrowed, copied, improved, and scaled. Success does not always go to the first inventor, but often to the best replicator and popularizer. James Watt didn’t invent the steam engine, but he produced steam engines that were commercially viable.

As Katarina Hall rightly notes, Fernández de Cofiño’s contribution “is a testament to Guatemala’s deep entrepreneurial energy — an informal, voluntary spirit that thrives even in the face of bureaucracy and poverty.” Her story shows how powerful innovation can emerge from ground-level observation, not corporate strategy.

Likewise, Burger Chef’s experience reveals the fragility of innovation when not legally protected or effectively promoted by competent management. Frankly, it’s not clear that Burger Chef should have been able to patent the concepts it innovated, and McDonald’s did not directly infringe on any trademarks, since they used new and different cartoon characters.

So the conclusion should not be colonialism, or cynicism; creative destruction requires realism. Capitalist economies work because good ideas move, spreading quickly. Innovations get copied, improved, and recombined in unexpected ways. The Happy Meal wasn’t “stolen” so much as refined. It emerged from a decentralized ecosystem of franchise owners, regional ad firms, and small competitors.

In the end, the Happy Meal is not just a fast-food product — it’s a case study in how markets generate progress. Imperfectly. Inequitably. But effectively.

Burger Chef is long bankrupt, the end point of the “destruction” of capitalism. Yolanda Fernández de Cofiño is also gone; she passed away in 2021. Yet their ideas are still served millions of times each day — in red boxes, with golden arches. And with a toy.

Federal Reserve Chair Jerome Powell is expected to release the details of the Fed’s framework review at this week’s annual Jackson Hole Economic Policy Symposium. The Fed’s framework specifies the objective of monetary policy — that is, how the Fed intends to respond to changes in inflation, unemployment, and production. In other words, it determines how the Fed will conduct monetary policy.

The Fed reviews its framework every four to five years. The current review began in January 2025. In addition to discussions at Federal Open Market Committee (FOMC) meetings, the review included Fed Listens events and the Thomas Laubach Research Conference. Back in January, Powell said Fed officials will “be open to new ideas and critical feedback and we will take on board lessons of the last five years in determining our findings.”

Most Fed watchers anticipate significant revisions to the Fed’s Statement on Longer-Run Goals and Monetary Policy Strategy (henceforth, “Consensus Statement”). At the January FOMC meeting, “participants assessed that it was important to consider potential revisions to the statement, with particular attention to some of the elements introduced in 2020.” Specifically, they identified the “focus on the risks to the economy posed by the [effective lower bound], the approach of mitigating shortfalls from maximum employment, and the approach of aiming to achieve inflation moderately above 2 percent following periods of persistently below-target inflation” as areas of the Consensus Statement potentially in need of revision. That was welcome news to economists like me, since those 2020 changes arguably contributed to the Fed’s slow response to rising inflation in late 2021 and early 2022.

Prior Changes

The Fed made two important changes to its Consensus Statement during its last review, which concluded in August 2020. First, it replaced its Flexible Inflation Target (FIT) with an asymmetric Flexible Average Inflation Target (FAIT). Second, it replaced its symmetric approach to delivering maximum employment with an asymmetric approach aimed at preventing shortfalls from maximum employment. Why did the Fed make those changes then?

The move from FIT to FAIT was intended to address problems with the conduct of monetary policy that emerged in the immediate aftermath of the Great Recession. The Fed formally adopted a 2-percent inflation target in January 2012. Although the Fed’s FIT was intended to deliver inflation at 2 percent, the Fed generally failed to hit its target in the years that followed. The Personal Consumption Expenditures Price Index, which is the Fed’s preferred measure of inflation, grew at a mere 0.9 percent on average from January 2012 to January 2016. As I wrote back in 2015, it was “widely believed that the Fed’s stated 2 percent target is, in fact, a 2 percent ceiling.”

In 2016, the Fed revised its Consensus Statement to clarify that its 2-percent FIT was symmetric: it would be just as likely to overshoot its inflation target as to undershoot it. By clearly stating that its FIT was symmetric, the Fed hoped to anchor inflation expectations at 2 percent and, in doing so, make it easier to conduct monetary policy to deliver 2-percent inflation. As written in the 2016 Consensus Statement: 

Communicating this symmetric inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the Committee’s ability to promote maximum employment in the face of significant economic disturbances.

Alas, that proved easier said than done. Inflation (as measured by PCEPI) averaged just 1.7 percent from January 2016 to January 2020, just prior to the pandemic.

Having persistently undershot its inflation target under FIT for the better part of a decade, the Fed adopted its FAIT framework in August 2020. Whereas FIT was designed to deliver 2 percent inflation on a go-forward basis, regardless of any past mistakes, FAIT included a make-up policy that was intended to deliver 2-percent inflation on average. The Fed was explicit in noting that, “following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” It did not explicitly state how it would conduct policy following periods when inflation has been running persistently above 2 percent, but the assumption I (and many other economists) had at the outset was that it would engage in FAIT symmetrically — i.e., that it would similarly make up for periods when inflation had been too high. The A in FAIT stood for average, after all; and inflation would not average 2 percent if the Fed only made up for periods of below-target inflation.

Despite the name, we soon learned that the Fed did not intend to make up for periods of above-target inflation. Inflation (as measured by PCEPI) has averaged 3.9 percent since August 2020. And, although the Fed has worked to bring inflation back down to 2 percent from a high of 11.3 percent in June 2022, it does not intend to deliver below-target inflation for a period, as would be required for inflation to average 2 percent. FAIT was not symmetric: the Fed would only engage in make-up policy if it undershot its target.

The reason for the move from a symmetric approach to delivering maximum employment to an asymmetric approach is somewhat harder to pin down. Three possible reasons come to mind.

1. Fed officials wanted to reinforce the Fed’s asymmetric approach to targeting inflation.
2. Fed officials came to accept a plucking model of business cycles.
3. Fed officials became concerned about employment gaps between races, and thought the best way to prevent such gaps was to ensure the economy was always at or above full employment.

One might make a strong case for any of these reasons, and perhaps all three played a role. In any event, the consequences of such an approach soon became clear: the Fed was slow to tighten monetary policy when inflation picked up in 2021, out of concern that doing so might cause employment to fall below potential.

Expected Changes

Although the Fed has not yet released its revised Consensus Statement, the minutes from FOMC meetings held earlier this year offer a good sense of what changes will be made. 

At the March 2025 meeting, participants “discussed the implications of pursuing a strategy that seeks to mitigate shortfalls of employment from its maximum level, as described in the statement, and the ways the public has interpreted that approach since it was introduced into the statement” and “indicated that they thought it would be appropriate to reconsider the shortfalls language.” In other words, the Fed is likely to replace its focus on shortfalls from maximum employment with deviations from maximum employment, which would result in a more symmetric approach to achieving maximum employment.

At the May 2025 meeting, participants “indicated that they thought it would be appropriate to reconsider the average inflation-targeting language in the Statement on Longer-Run Goals and Monetary Policy Strategy.” They “noted that an effective monetary policy strategy must be robust to a wide variety of economic environments” and “viewed flexible inflation targeting as a more robust policy strategy capable of correcting persistent deviations of inflation from either side of the Committee’s 2 percent longer-run objective.” In sum, the Fed is likely to replace its asymmetric FAIT with a symmetric FIT.

Taken together, the FOMC meeting minutes from March and May of this year suggest the Fed intends to undo the changes made to the Consensus Statement back in August 2020. That’s understandable, given the experience of the last five years. Focusing on shortfalls rather than deviations from maximum employment and failing to commit to offset periods of above-target inflation enabled the Fed to delay tightening monetary policy in late 2021 and early 2022. As a consequence, inflation rose higher than it otherwise would — and the level of prices will remain permanently elevated above its pre-2020 trend path. In other words: the Fed’s framework did not serve the American people well during this period.

Tell Me Why

Somewhat surprisingly, Chair Powell maintains that the existing framework did not prevent the Fed from conducting policy appropriately over the last five years:

There was nothing moderate about the overshoot. It was an exogenous event. It was the pandemic and it happened and, you know, our framework permitted us to act quite vigorously. And we did, once we decided that that’s what we should do. The framework had really nothing to do with the decision to — we looked at the inflation as — as transitory and — right up to the point where the data turned against that. [W]hen the data turned against that in late ‘21, we changed our — our view and we raised rates a lot. And here we are at 4.1 percent unemployment and inflation way down. But the framework was more irrelevant than anything else — that part of it was irrelevant. The rest of the framework worked just fine as — as we used it — as it supported what we did to bring inflation down.

The existing framework, according to Powell, is not broken and, hence, does not need to be fixed.

Powell’s statement is somewhat surprising for at least three reasons, as my colleague Bryan Cutsinger has explained. First, the emerging consensus is that much of the inflation experienced between 2021 and 2024 was due to excessive demand, which monetary policy could have and should have offset. Second, the Fed clearly delayed tightening monetary policy, just as one would expect it to do given its existing framework. Third, the Fed’s asymmetric FAIT framework prevented it from bringing prices back down to where they would have been had it not allowed demand to surge; the lack of make-up policy following an overshoot meant prices would remain permanently elevated.

Powell’s remarks also seem incongruent with the facts that (1) the Fed is revising its framework and (2) as he himself has stated, Fed officials “will take on board lessons of the last five years” in making revisions. If the framework “worked just fine” and permitted the Fed to “act quite vigorously” over the last five years, as Powell maintains, then surely the lesson is that the Fed should leave its well-functioning framework as is. As my grandpa used to say: don’t fix what’s not broken.

It seems more likely that Powell and others at the Fed recognize the problems with the existing framework and are making changes to improve it, but do not want to acknowledge their errors: adopting a faulty framework in August 2020 and then sticking with it in late 2021 and early 2022, as inflation climbed. The reluctance for Fed officials to admit they made a mistake — and, in this case, two mistakes — is not at all surprising. The Fed’s mea culpa for the Great Depression was seventy years in the making.