Despite the soothing hot air from the White House and Fed officials, the financial system is becoming increasingly fragile and unstable. Maybe all of that intervention the past decade was not wise.
Walter Bagehot, as Jim Grant writes, believed that bankers and central bankers should exhibit financial discipline. He would not recognize today's banking world.
At the heart of Keynesian business cycle theory is the so-called liquidity trap. Contra Keynes, however, economies don't falter because a sudden increase in the demand for money.
We're still living with the consequences of the massive monetary inflation by Trump and Biden. Prices are stubbornly high, and falling real wages are driving Americans to say things are getting worse.
Government interference into money creation and production harms the economy in a number of ways, including skewing the organization of division of labor.
Despite worries that foreign "competitors" will surpass economic production in the United States, innovation and entrepreneurship are still important here. For now.
Not satisfied with hamstringing the oil and gas industries, environmentalists now are shutting down farms and production of livestock, all in the name of fighting climate change. But people still need to eat.
According to Galiani, interest equalizes present and future money. It is a means to compensate for the palpitations of the heart that a creditor must endure until the money is returned.
