Of all the issues facing the Federal Reserve’s new chairman, Kevin Warsh, one that gets little public attention is the financial condition of the Fed itself.  In addition to its much-publicized roles of setting short-term interest rates, which may be headed back up, and creating inflation, which is already too high, the Fed is a giant financial enterprise.  It has total assets of $6.9 trillion as of March 31 combined with negative real capital. 

A late 1953 Agency memo documents how the CIA for years broadcast “black radio transmissions” in Ukrainian from a secret CIA installation in Athens, Greece.

To the Editor: 

I read with interest the Naples Daily News article, “Collier faces $63M hit from tax plan,” (June 6).

While much of the discussion focuses on how local governments will cope with reduced revenue, the deeper issue is the disconnect between property taxes and the services governments provide.

James Buchanan and Gordon Tullock’s The Calculus of Consent is usually considered a classic of free-market thought, but Rothbard was not an admirer of it. In a memo, now conveniently available in Rothbard’s Economic Controversies, prepared in 1960 for the Volker Fund on a manuscript version of the book, he raises some fundamental questions about it, and in this week’s article, I’d like to discuss some of these.

Money-supply growth rose year over year in April, marking the sixth month in a row of accelerating growth, and rising to the largest growth rate in forty-nine months. In spite of repeated claims from the Federal Reserve that monetary policy is at least moderately restrictive, there is no sign of any slowing in money-supply growth. Moreover, the overall fragility of the economy suggests that the Fed will continue to face political pressure toward easing monetary conditions, and this is likely to ensure that we see no real effort at the Fed toward monetary tightening. 

Brazil is again teaching a lesson that economists should not need to relearn: a government cannot buy prosperity by pushing demand today while leaving production, saving, and investment to carry the bill tomorrow. President Luiz Inacio Lula da Silva’s administration is publicly frustrated with high interest rates, but the numbers tell a simpler story. Brazil’s own central bank data show that inflation expectations remain above target, the policy rate remains high, and fiscal risks remain one of the market’s central concerns.

As we approach the 250th anniversary of the Declaration of Independence, it is likely that we will hear a common, but mistaken, interpretation of the Declaration by both establishment conservatives and progressive egalitarians.