The Fed

My disagreement with Ms. Baum regarding central banking is at base a disagreement about what exactly is money and credit.

Both Phelps and another Nobel Laureate Milton Friedman have introduced more confusion rather than clarity regarding the explanation of the phenomenon of stagflation.

Our analysis shows that it is changes in past money supply, and not changes in the price of oil, that drive price inflation.

Presented at the Mises Circle in Manhattan: The Fed and War Finance (16 September 2006, University Club, New York, NY).

Presented at the Mises Circle in Manhattan: The Fed and War Finance (16 September 2006, University Club, New York, NY).

What is really stopping a much-needed change is public ideology. So long as the political system encourages the idea that government is the savior of mankind, the solver of all human problems, the machine that will bring freedom to the world through tanks and bombs, we are going to have the problem of monetary instability.

Government officials have the incentive and the ability to manipulate economic statistics. The lesson is: don't be fooled by government statistics.

What the American worker needs is more of what Wal-Mart offers and less of what the government offers. If we could then fix the Fed so that it would no longer water down the value of our money, we'd never have to worry about declining real wages again.

The Fed is there to print all the money the federal government will need. There is no limit on its power to do so. We aren't taxed. For that reason, people are not scandalized by the numbers or the corruption. We don't even call it that. There is nothing about the numbers that seems real.

To the extent that government agencies own a portion of the stock market they are engaged in central planning.