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For and Against the Printing Press

June 14, 2005

Bryan Caplan jumps all over Lew Rockwell for blasting CEA chairman Ben Bernanke. Bryan argues that Ben and Mises hold the same position on paper money, namely that "under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

But Bryan, the difference is that Mises is passionately against this policy, whereas Ben is bragging about the power possesssed by the government, and would be for using it under the right conditions--at least if we accept his public statements at face value. Thus did Ben call for 0.0% interest rates back in July 2003 in an attempt to forestall a fall in the inflation rate which he somehow sees as the most dreaded fate that can befall an economy. He favors the use of monetary policy to achieve the "mandated goals of price stability [i.e. no deflation] and maximum sustainable output and employment."

In short, I think we can say with confidence that Bernanke is no Misesian. (I apologize for having used this blog to state the incredibly obvious.)

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