Whippet

Why It's Time to Audit the Fed

Umm- no. Cycles cannot be broken- even before Pharoah's seven years of plenty and seven years of famine, cycles are part of life and economics. Free markets use cycles to clear out bad firms and redistribute capital to new entrepreneurs and successful firms. Cycles drive consumers to be risk-averse, to avoid credit, to see debt as the slave master it is, to save their hard-earned money. All of this counter-cyclical bull$hit is a pipe dream- it has not worked, and has only created systemic problems that jeopardize our very liberty.

Individual risk has been replaced with socialized risk- Social Security, Medicare, Pension Bailouts, FDIC. "Too-big-to-fail" status and the Greenspan Put first created a moral hazard epidemic; next, they will lead to Corporatism as the Government exerts both excessive regulation and outright ownership.

The Fed was the bastard offspring of an unholy union of Bankster Oligarchs and Progressive Elites. Daddy wanted the power of monetary control, Mommy wanted the promise of State security.


On Sep 27 10:25 PM THofler wrote:

> I'm sympathetic to most of these views. But Milton Friedman recognized
> that history is the economist's laboratory.
>
> A little history:
> 1807 - depression
> 1839 - depression. The longest &amp; deepest in U.S. history.<br/>1873
> - panic &amp; depression. The worst recorded by NBER.
>
> Then there were 14 more recessions and panics before the Great Depression
> occuring with an average frequency of every 4 years.
>
> The obvious conclusion is that human behaviour in combination with
> the simplest forms of free market capitalism is highly pro-cyclical
> and unstable. Right now, the Fed is the only significant counter-cyclical
> force in our economy. Now I'm sure that there are other hypothetical
> counter-cyclical systems that are superior to the current one. But
> this one, with all its warts, is a lot better than the previous era.
>
>
> Besides, are you really proposing junking the Fed and turning the
> whole economy over to the tender mercies of Pelosi, Reid, Frank,
> Dodd, &amp; Obama?