The Problems of Central Bank Planning

With day after day of bleak news regarding the credit crunch -- and in particular, articles that constantly remind us that the Fed’s recent actions haven’t been tried since the Great Depression -- the average American is understandably perplexed. And although what I’m about to admit may not surprise many readers, it nonetheless may worry them further: Most economists don’t have a clue what’s going on, either.

The Political Economy of Moral Hazard

Jorg Guido Hulsmann shows that moral hazard is not a market failure, but arises anywhere there is a separation of ownership and control, and that it entails expropriation when ownership and control of a resource are separated without the consent of the owner. This is, in fact, the essence of government interventionism: institutionalized uninvited co-ownership.