A letter I sent to the Denver Post:
The Denver Post on January 26, in “Fresh Term for Fed’s Bernanke”, endorsed Ben Bernanke for a second term as Chairman of the Federal Reserve Board. This recommendation was based on his “decisive leadership in preventing the collapse of credit markets … late 2008.” The FED according to the Post is an “institution that has served us well for decades … .” However, The FED is not an institution that has served us well. It was set up to protect the value of the dollar and to avoid boom and bust cycles. Since inception of the Fed, the dollar has, in real terms, declined over 87%, now having a purchasing power compared to a 1913 dollar of less than 13 cents. Just since the mid 1990s overly easy monetary policy has caused or enabled two significant boom-bust periods with accompanying bubbles in first dot.com stocks and then residential and commercial real estate. The Wall Street Journal in a January 25th editorial which argues against confirmation partially because of Bernanke’s and the FED’s complicity in the causing the most recent boom and resulting bust and financial crisis, unwittingly gives the one legitimate short run reason to retain Bernanke; other potential nominees would be even worse. In the long run, instead of celebrating the Fed and central banking, true financial reform would, following Nobel winner F. A. Hayek look seriously at proposals to “denationalization of money” including the recent suggestion by economist Richard Ebeling to end the Federal Reserve.
Dean School of Business
Professor of Economics
Metropolitan State College of Denver
cochranj@mscd.edu
3035563218
3035564429 (fax)
Professor Cochran, with Fred R. Glahe, Professor Emeritus, University of Colorado Boulder is the author of The Hayek-Keynes Debate¾Lessons for Current Business Cycle Research. 1999. Lewiston, New York: The Edwin Mellen Press. Paperback reprint 2009.
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Will the “Audit the Fed” bill help curb the Fed’s power?
“Will the “Audit the Fed” bill help curb the Fed’s power?”
ha
………oh you were serious. Let me laugh harder.
HA!
I think that Ron Paul’s original intention was that the audit would expose such corruption and self-dealing in recent Fed actions that there would simply be no way the Fed could survive the tsunami of public shock and outrage.
That would explain the concerted effort to defeat or water down the bill.
As for letting Bennie Ben keep his job – if they renew him then there is no way that any rational person could ever hold even a shred of respect for voting, democracy or legislatures. The reasons for the Fed’s existence are to stabilize the financial system, stabilize prices, and maintain high rates of employment. By the Fed’s own mandate, Ben B. is an utter failure. Anyone who claims that he acted quickly and wisely to “avert” disaster is an idiot or a liar. The purpose of the Fed was to AVOID FINANCIAL DISASTERS, not to cause them and then paper over their symptoms with bailouts.
If that isn’t enough evidence to hang Bernanke, remember that he REPEATEDLY denied that there were any problems looming when he was asked about this in the years and months leading up to the banking panic in 2008.
I would like to offer a correction. According to the CPI Calculator on the Federal Reserve Bank of Minneapolis web site (http://www.minneapolisfed.org/), the dollar in 2009 was worth only $0.046425 compared to the 1913 dollar. That’s a decline of more than 95%, not 87%.
Sadly, the dollar hasn’t been worth 13 cents since 1980. At this rate, the Federal Reserve will have made it completely worthless in less than 100 years.
I’m glad to see someone from Metro State that comes from the Austrian perspective. Great stuff because I am currently a student there. Looks like I will have to take some classes from Prof. Cochran soon.
Last I heard Republican senator Jim DeMint was blocking Bernanke’s reconfirmation until there was a stand alone vote senate vote on the Audit bill. The question is whether the new Massachusetts senator Brown will side with DeMint… That would surely show whether Brown is a red coat or an old school liberal.
If Bernanke is not reconfirmed does anyone expect President Obama to choose a better FED Chairman. Can you imagine Larry Summers or Brad DeLong in the position?
Joe O.
Metro State is also privileged to have Alex Padilla, another Austrian, on our econ faculty. He has a grant for an Exploring Economic Freedom Lecture Series. If I remember correctly, Ben Powell and Chris Coyne are coming to campus this Spring. Watch for details in Metro events announcements or contact Dr. Padilla for details.
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