The Federal Reserve is very well aware[2], cyclical movements in the economy promotes the creative destruction required to grow the economy in the long run.<p>At the same time, it&#x27;s mandate given by the Congress is to minimise cyclical movements in the economy, through maintaining price stability, maximising employment, and moderating long-term interest rates.<p>Regular periods of price volatility, temporary, massive fall in employment, and sharp interest rate volatility are required for releasing ineffectively used capital and labor in the economy, to be hoovered up by stronger businesses. But the Federal Reserve&#x27;s mission isn&#x27;t to promote creative destruction for long term economic growth. It&#x27;s mission is to maintain economic stability, <i>even if it is anaemia to long term economic growth</i>. In fact, it&#x27;s mandate doesn&#x27;t even mention economic growth or productivity.<p>Why do politicians create a Federal Reserve to do this, and to let it keep this mandate for the past hundred years? Why does President Obama want Federal Reserve to maintain economic stability, even as it corrodes American economy, month by month, year by year?<p>It&#x27;s election year, and President Obama wants to convince the world the American economy is doing great.<p><i>Reject pessimism, cynicism and know that progress is possible. Progress is not inevitable, it requires struggle, discipline and faith.</i>[1]<p>[1] <a href="http:&#x2F;&#x2F;www.theguardian.com&#x2F;us-news&#x2F;2016&#x2F;apr&#x2F;23&#x2F;barack-obama-london-visit-young-people-key-to-changing-the-world" rel="nofollow">http:&#x2F;&#x2F;www.theguardian.com&#x2F;us-news&#x2F;2016&#x2F;apr&#x2F;23&#x2F;barack-obama-...</a><p>[2] <a href="https:&#x2F;&#x2F;www.chicagofed.org&#x2F;publications&#x2F;economic-perspectives&#x2F;2004&#x2F;2qtr-2004-part-4" rel="nofollow">https:&#x2F;&#x2F;www.chicagofed.org&#x2F;publications&#x2F;economic-perspective...</a><p><i>Because a firm’s failure frees the labor and capital it employed for use at a more profitable entrant, this process may be described as creative destruction. Although there are costs associated with creative destruction, such as the lost labor of temporarily unemployed workers, it benefits an economy in the long run by moving productive resources into more profitable uses.</i><p><a href="http:&#x2F;&#x2F;www.federalreserve.gov&#x2F;pubs&#x2F;feds&#x2F;2006&#x2F;200623&#x2F;200623pap.pdf" rel="nofollow">http:&#x2F;&#x2F;www.federalreserve.gov&#x2F;pubs&#x2F;feds&#x2F;2006&#x2F;200623&#x2F;200623pa...</a><p><i>Explaining Cyclical Movements in Employment: Creative Destruction or Changes in Utilization</i><p><a href="https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;faqs&#x2F;money_12848.htm" rel="nofollow">https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;faqs&#x2F;money_12848.htm</a><p><i>The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act.<p>The Federal Open Market Committee (FOMC) is firmly committed to fulfilling this statutory mandate.</i>