Delete the Fed

My latest Future of Freedom Foundation op-ed, "Delete the Fed," summarizes the reasons why no one should succeed Ben Bernanke when his term as chairman of the Federal Reserve expires at the end of January. 

Money was not invented by government. It was the spontaneous creation of people trying to ease exchange in the marketplace. Central banks like the Fed only messed money up, robbing the people while facilitating warfare and welfare spending through irresponsible large-scale government borrowing.

Therefore, the Fed should be deleted.

Read it here.

Who Threatens Internet Freedom?

Two months from now the World Conference on International Telecommunications (WCIT) will convene in Dubai, United Arab Emirates, sponsored by the UN’s International Telecommunication Union (ITU). Depending on whom you believe, this is either the gravest threat to the Internet to date or a justifiable effort to free the Internet from U.S. domination.

Read the full article at The Project to Restore America. My first article at the site was "What’s Next for the Audit-the-Fed Bill?"

Op-Ed: Federal Reserve Grabs New Powers

While inflation hawks understandably keep a close watch on the Federal Reserve’s money-creation activities, an equally worrisome Fed activity is taking place right under their noses. Under cover of addressing the financial crisis and recession, the Fed has become the central allocator of credit.

As San Jose State University economics professor Jeffrey Rogers Hummel points out in The Independent Review (Spring 2011), Fed chairman Ben Bernanke “has so expanded the Fed’s discretionary actions beyond merely controlling the money stock that it has become a gigantic, financial central planner.... [T]he Fed that emerged from the crisis is no longer the same as the Fed before the crisis.”

Read the full op-ed, "Federal Reserve Grabs New Powers."

TGIF: The New Fed

“Things are seldom what they seem.” –W.S. Gilbert, “H.M.S. Pinafore”

Nowhere is this more true than in government – which means we have to watch it closely. Unfortunately preconceived notions can make us impervious to events right in front of us and lead us to colossal misperceptions.

Take the Federal Reserve System. (All together now: Please!) Since the central bank controls the money supply, advocates of free markets and market-based money are understandably wary of its power to generate inflation. It’s inflated in the past and has the capacity to do so in the future. So attention naturally goes in that direction.

The problem is that while we’re watching for inflation, we might be missing the Fed’s real mischief elsewhere.

Read the rest of TGIF: The New Fed here.

TGIF: A Victim of the State

Bernard von NotHaus is a victim of State oppression. One hopes his conviction is overturned and he remains a free man. I for one feel safer with him doing what he does than with Ben Bernanke doing what he does.

Read the full TGIF here.

TGIF: "F" as in Fed

The Federal Reserve, America’s fatally conceited monetary central planner, is not terribly popular these days – which is cause for hope – and now we have a report card on the entire Fed era that strongly supports the view that we’d be better off without it. At the very least, as the authors suggest, the burden of proof is squarely on the shoulders of those who would retain the Fed.

The report card comes in the form of a working paper from the Cato Institute: “Has the Fed Been a Failure?” by George A. Selgin, William D. Lastrapes, and Lawrence H. White.

The rest of TGIF is here.

TGIF: The Many Impositions of Government

Belatedly:

Not that I’m keeping score, but just in the last few weeks the news has overflowed with examples of how much we are at the mercy of government edict. The three stories I’m thinking of, quite unrelated on the surface, are: the spreading but so far futile protests against airport body scans and frisking verging on sexual assault, the Federal Reserve’s announced second “quantitative easing” (QE2), and the FDA’s order that makers of caffeinated alcoholic beverages remove the caffeine or take their products off the market.

The rest of TGIF: "The Many Impositions of Government" is here.

The Freeman, March 2010

The March Freeman is now online. In this issues: Jim Powell discusses Progressive Republican Theodore Roosevelt's big-government record, Gene Callahan pleads for maturity in public-policy discussions, Gerald O'Driscoll looks at the Fed's recent conduct, Steven Horwitz explains the idea of unintended consequences, Kevin Carson gazes deep into the health care system, and Joseph Stromberg takes another look at John Locke.

America: Corporate State

At ThinkMarkets, Gerald O’Driscoll, building on a Wall Street Journal column by George Melloan, describes how Fed policy is leading America further down the corporatist road. Here’s a sample:

Melloan doesn’t state it, but there is a name for this economic policy: corporatism. Big government favors selected big business and rewards big labor as a junior partner. It’s not socialism, but the economic component of a fascist political program. Credit administered on a favorable terms is the narcotic that anesthetizes businessmen to the creeping government control of their firms. To paraphrase Lenin, government seizes control of the commanding heights of the economy.

After the loss of economic liberty, can political liberty survive? As Melloan concludes, “it’s not unlike what we witnessed in the depression of the 1930s.”

Serious stuff with far-ranging consequences.

Today's Offerings

FEE TGIF -- "The Bankers' Bank": the origins and ruling-class nature of the Fed.

FFF Op-ed -- "Liberty Creates Order": demolishing David Brooks's false alternative.

TGIF: Of, By, and For the Elite

The New York Times pulled back the curtain this week to give readers a rare glimpse at the workings of a political-economy essentially run by a ruling elite. Anyone who thinks representative democracy can’t coexist with rule by a political class is in for a surprise. The clique need not control everything. The pervasive money and banking industries are more than enough.

The rest of this week's TGIF, "Of, By, and For the Elite," is here.

TGIF: Boomerang: Government and Systemic Risk

If you’re not careful when throwing a boomerang, it could come around and hit you in the back of the neck. Politicians and bureaucrats should learn the same lesson when touting their supposedly indispensable role in safeguarding the country’s economic security. If you look closely, you find that they are the biggest source of the very dangers they presume to protect us from.

Read the rest of TGIF here.

Bailout Hypocrisy

Thud. That was the sound of the other shoe dropping. In response to severe problems in the credit markets, thanks to years of government intervention, the Federal Reserve, the government's counterfeiter and chief culprit in the current crisis, has opened its discount window to the investment banks. Interest rate: 2.5 percent. Until recently, only commercial banks could borrow money from the Fed. But now investment banks may also -- and here's the kicker: They can put up shaky mortgage-backed securities as collateral. Which means the American people are potentially on the hook for those loans. Should they go bad, we Americans will pay either in inflation-induced higher prices or higher taxes. Investment banks that may have invested in bad mortgages are already taking advantage of the new opportunity. Is this a great country or what?

The rest of this week's TGIF, "Bailout Hypocrisy," is at the Foundation for Economic Foundation website.