Here is my piece for the American Conservative: “The Popular Uprising Against Central Banking“
Source link: http://archive.mises.org/9420/the-people-vs-the-fed/
The People vs. the Fed
Previous post: Bailing Out the Red Light District
Next post: Critics of Keynesian Economics
{ 9 comments }
Thomas,
I’m curious as to why you avoid mentioning “fractional reserve banking” as the basis for the business cycle theory and that fact that its money creation ability is mainly possible by the Fed as a cartelizing tool.
I am worried that this fact is being ignored, because as you know, even if the Fed kept interest rates high, a business cycle would still occur as a result of fractional reserve banking. In fact, if the Fed was abolished but the banks were still able to coordinate reserves (by some other means of legislation), we would still have a business cycle.
Why not lay it all out like Rothbard and explain that banks lend money by extracting resources (via inflation) from the public.
I’ve heard you speak a few times and although I mostly agree with you, I don’t see why a “central bank enforcing a cartel of banks†is not emphasized.
I bet Prof. Woods deliberately simplified his explanation in order to reach the widest audience possible. Taking the dumbed-down “This is your brain. This is your brain on drugs” approach (harkening back to the anti-drug abuse campaign commercials from the Reagan era) has to be done. The popular mindset has to be reached.
In fact, if there isn’t one yet made, I would recommend making a similar vid “This is your money. This is your money on Fed’s.” tsss goes your money (nest egg? lol) in the Fed frying pan…
Without the various government levers such as specie repayment suspensions, legal tender, and central banking the discipline of the free market tends to minimize the practice of fractional reserve lending. See Rothbard’s description of Suffolk Bank in History of Money and Banking in the US.
I’m one of those waking up and learning. I hope more of those in the know will expose this information just as it is in the article “Fed Up” so that the circulation of better thought can be spoon fed to those of us who need it.
In America, for the last 50 years, it is unfortunate that the government funded education environment enabled the process of making topics like this “feel” sort of “too difficult” for the average person to grasp…so a majority of our citizens give up and let the Washington D.C. “experts” handle it.
The “dumbing-down†process has to be turned in to a “smarting -up†process and this is what is going to help the U.S. get into a better governing model.
John,
I am convinced that the situation if even more severe then you think it is.
How is wealth created, or what is wealth? I would say that 99% cannot properly answer those questions. I also think that over 90% of the so called “intellectuals” cannot either.
I know scientists, enginners, doctors that cannot properly grasp these topics. Many of them obviously understand much more complex concepts, but when it comes to economics.. it’s all empty!
Really intelligent people seem to close down when the subject of economics comes up. The reason, I think, is because they’ve been handed Kenesian drivel as high minded thinking, and made to feel like fools for seeing things with the more rational, simple view of common exchange. I think the reason so many more people are waking up to Austrian Econ, is that it just makes sense! No Animal Spirits, or backward logic. And the link between the endless spending of government, the Federal Reserve Teat, campaign reform problems, and the people always having to take a hit for America is starting to make sense as well.
People are re-discovering their own ability to see clearly and understand the things they’ve been told by the “experts” were unfathomable to the common man. The BS is losing it’s opacity.
HALALUYA!!!!!
Great NEWS, State of New Hampshire Makes STAND, we’re all still in the running.
HCR 6 – New Hampshire Affirms States Rights
http://www.opednews.com/articles/HCR-6–New-Hampshire-Affi-by-Barbara-Peterson-090204-442.html
or Google “HCR 6″
I was in Houston after they passed the first bailout. I saw a college kid in a Starbucks with a T-shirt featuring Paulson, Bernanke and Greenspan. Under each their pictures were single words like “Thief,” “Liar,” and under Greenspan, “Traitor.”
I realize this was just one lone college kid, but this was much more than than what’s usually seen in public (nothing.) The anti-fed movement has a very long way to go, but its slowly gaining ground.
Very nicely written, of course simplified I understand, but a great way to get people interested enough to find out more on their own.
@DD: I am one of the “empty” ones, a scientist who slowly awoke, grew weary of working in academia and government agencies, moved into the private sector (venture capital-funded start-up company), a decision motivated by reading books on economics by the likes of Thomas Sowell and Walter E. Williams.
After discovering the necessity of personal responsibility, and its relationship to a free-market economy organized to run on entrepreneurial capitalism, reading of the Von Mises Institute and the FEE websites has provided me with more education than, I hate to say it, more than a decade of post-graduate eduction and work ever did.
Many thanks!
Comments on this entry are closed.