Writing in the Wall Street Journal on December 23, Robert Lucas expresses approval of the Fed’s latest reduction of its target range for the Federal Funds Rate to approximately zero, calling it “welcome.” Lucas notes that this policy does not leave the Fed without the ability to inject additional reserves into the banking system, because it can purchase not only Treasury bills, as it normally does in its open-market operations, but also longer-term Treasury securities and private bonds, which c

Here’s Lionel Robbins, from his 1934 book The Great Depression, giving us the advice that was ignored then and is being ignored now:

[This article originally appeared on LewRockwell.com.]

Nearly every day brings new reports of the collapse of a large financial institution or the impending bankruptcy of a major company. Plans for bailouts and government intervention are in the air. Even those who profess devotion to free enterprise have wavered. Are we not faced with an emergency that calls for immediate action to “save” capitalism?

Reason prints Steve Chapman’s column calling for more inflation. Salvation through paper money!

In the private sector, when a firm fails, it ceases operations. The opposite happens in government. There is literally nothing a government agency could do that would make the talking heads on the Sunday shows ask, “Maybe we should just abolish this agency? Is it doing more harm than good?”