The Fed

Presented at the Mises Institute’s first conference, November 16-17, 1983; in Washington, DC.

Recorded in Houston, Texas; October 27, 1984.

Instead of permitting the necessary economic adjustments to be made in the wake of this unsustainable boom, the political classes — and their court economists — insist on even more government spending, more debt, and more destruction of the dollar.

The art of economics consists in looking not merely at the immediate but at the long effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

The Austrians (including me) who predicted these problems based on Greenspan's low-interest-rate policy know of course that the main cause was that low-interest-rate policy, with his numerous bailouts of failed financial institutions also creating a moral hazard that encouraged risky behavior.

As always, the little guys are told to give up their way of life to preserve the high-paying jobs of corporate and union executives — along with the jobs of people who make cars no one wants to buy.

The Federal Reserve should not make a credible commitment to future inflation as a means of stimulating aggregate demand. The Federal Reserve should instead reverse its low-interest-rate policy before it increases the level of discoordination in the economy.

1998 Mises Institute Supporters Summit, Palm Springs, California; February 27-28, 1998.

Recorded at the Toronto Stock Exchange; September 16-17, 1999.

Recorded at the Toronto Stock Exchange; September 16-17, 1999.