Speech on the Role of the Fed in the Great Depression
6 Comments Published by tet on Thursday, March 20 at 5:27 PM.
I'm curious as to what the supporters of the Federal Reserve System think about this speech that the current head made on November 8, 2002. In it, he states that not only did interference by the Fed not make the Great Depression better, their actions contributed to the depth and length of the problem.
If the Federal Reserve has admittedly screwed the US economy completely in the past, who's to say that it's not happening again?
Tom
Hat tip to Vox Day.
If the Federal Reserve has admittedly screwed the US economy completely in the past, who's to say that it's not happening again?
Tom
Hat tip to Vox Day.
Labels: doom, economics, federal reserve, Tet
What's a private company doing setting national monetary policy?
What's a private company doing being my sole provider of electricity?
Tom,
That's a very good question. I think it's far from certain that the Federal Reserve will get this right. If they do, Bernanke will probably not receive much credit, and if they don't Bernanke will probably be widely blamed. What is somewhat reassuring to me is that Bernanke is a noted expert on the Great Depression. So undoubtedly he has unique insights into the problem.
As I understand it, Bernanke has a thesis that the Great Depression was caused by the Fed's failure to combat the deflation caused by the credit crunch and bank failures. So Bernanke appears to be trying to stuff liquidity anywhere he can , and to keep any banks from failing. It seems likely to me that this will cause greater inflation, but if it prevents a broader collapse, then maybe it is worth it.
Hanno,
I don't think the Federal Reserve can really be properly thought of as a "private company." First, it is widely understood that the Federal Reserve is backed by the United States government, and, therefore cannot "fail" or go "bankrupt." Second, the Governors of the Federal Reserve are appointed by the President.
I think it is more proper to think of the Federal Reserve as an "independent governmental agency," because it is, in effect, a part of the federal government but not really under the political control of any branch of the government. Frankly, this is for the best. Whatever the merits of having a group of technocrats running the money supply(instead of, say, the gold standard), such as system is far superior to having the money supply controlled by elected officials who would have perverse incentives to manipulate the currency supply and causing all sorts of trouble.
Allan
It's in your power plant, raising your electric rates, Kofi.
Tom
@hanno.
the fed IS a private company. it is a banking cartel.
@tet
i'm in ur power plant, raisein ur rates