Stossel's Fed Up

Wednesday, October 30, 2013

John Stossel bluntly calls for an end to the Federal Reserve:

The Fed, created to shore up capitalism, has become an instrument of government economic management not so different from a socialist planning board: a tiny handful of powerful people attempt to fine-tune the entire economy. Its main mission has become continually goosing economic activity through infusions of new cash to maintain the illusion that good times will never falter.

The result isn't stability, but one economic bubble after another.
Along the way, he hurls the following timely barb:
Alan Greenspan said he tried to be obscure because he didn't want to spook markets. He called his obfuscation "Fedspeak." It's a far cry from the clarity of his language -- and principles -- when he was young and a disciple of libertarian Ayn Rand.
(I'll overlook the common, but inaccurate description of Rand's political views.)

Stossel also notes something most of his readers will not know: that Canada, lacking a central bank, did not suffer bank failures during the 1930s.

The nomination of Janet Yellen to the charimanship of the Fed practically makes this piece required reading -- and it provides an excellent reason to pass word of it along to others.

-- CAV


Vigilis said...

Not only did Canada's banks escape failure in the Great Depression, but not a single one failed during the recent U.S. crisis now dubbed the Great Recession. Moreover, fewer than 1 percent of all Canadian mortgages have been in arrears.

Gus Van Horn said...

Very interesting link.

The story, by making me curious as to whether Canada has a central bank, caused me to learn that Canada formed one in 1934. That means that the lack of a central bank could not entirely explain the absence of bank failures in that decade. The article you bring up does, however, indicate that the essential answer -- that the economy there was (and is) less regulated than ours in some important respects -- is correct.