All Posts Tagged With: "interest rates"
Saving Is Killing the Economy?
In the midst of the current recession, many of the oldest fallacies in economics are making a comeback. In a column titled “Why Saving is Killing the Economy,” senior writer Chris Isidore repeats one of the oldest: that the key to economic recovery or growth is consumption and that saving retards that process. Isidore states [...]
19Aug2009 | Steven Horwitz | 4 comments | ContinuedGovernment Sets Us Up for the Next Bust
If an athlete injures himself and suffers great pain, we recognize the shortsightedness of giving him painkillers to keep him going. The pain might be masked, but at the risk of greater injury later.
That’s a good analogy for the inflationary policies now pursued by Washington. These policies may temporarily “stimulate the economy,” but they also [...]
Greenspan Should Be Shocked by Risky Lending?
Toward the end of his tenure as Fed chairman in early 2006, Alan Greenspan was the object of praise edging at times into adulation. It came from some unlikely sources. Milton Friedman penned an encomium for Greenspan in the pages of the Wall Street Journal titled, “The Greenspan Story: He Has Set a Standard.” After [...]
2Mar2009 | Gerald P. O'Driscoll Jr. | 0 comments | ContinuedBootleggers, Baptists, and Bailed-Out Bankers
For more than a year now, people worldwide have experienced an extraordinary chain of economic events. Led by crushing increases in U.S. mortgage-related bankruptcies, the world financial collapse that followed has been termed the subprime crisis, the financial meltdown, the Wall Street bailout, the beginning of another Great Depression, and even the end of capitalism [...]
2Mar2009 | Bruce Yandle | 3 comments | ContinuedOn the Austrian Theory of the Trade Cycle, Part I
One of the most vivid memories of my undergraduate years is of sitting for hours in my carrel in the old Polk Library at Nicholls State University and reading F.A. Hayek’s Monetary Theory and the Trade Cycle and his Prices and Production. These books on the economic cycles of booms and busts are among the [...]
20Jan2009 | Donald J. Boudreaux | 4 comments | ContinuedThe Fed Should Inflate to End the Financial Crisis? It Just Ain’t So!
Ivan Pongracic, Jr. teaches economics at Hillsdale College.
The current housing and financial crisis has many people blaming “greed and market forces” for unleashing a panoply of evils on the unsuspecting middle class. This has led to many bad proposals to solve the crisis, such as the April 14 Wall Street Journal op-ed “The Inflation Solution [...]
The Fed Didn’t Bail Out Wall Street? It Just Ain’t So!
In his New York Times column (“It’s Monetary Policy, Not a Morality Play,” September 9, 2007), Tyler Cowen decried the clichéd pattern of casting all financial stories into “simple moral narratives.” Although many commentators have questioned the Fed’s handling of the credit crunch last August and September, Cowen sees no hanky-panky:
Talk of a bailout is [...]
Smart Economics: Commonsense Answers to 50 Questions about Government, Taxes, Business, and Households
By Michael L. Walden Reviewed by George C. Leef
1Jan2007 | George C. Leef | 0 comments | ContinuedThe Euro versus Currency Competition
It is now four years since the euro was introduced as a circulating currency in parts of the European Union. Both Europeans and others are becoming increasingly used to a single money in much of the continent. If the euro remains in use for another five or ten years people may well look back at [...]
1Jan2007 | Richard M. Ebeling | 0 comments | ContinuedThe Fed’s Potent Power
The Federal Reserve holds the fate of the U.S. economy in its hands. Or that’s the conclusion many observers draw when they watch investors react wildly to the most minute details of the Fed’s policy statements.
This conclusion is at once exaggerated and accurate.
It’s exaggerated because, at bottom, the Fed controls only the supply of dollars. [...]
Monetary-Policy Disasters of the Twentieth Century
Kirby R. Cundiff is an associate professor of finance at Northeastern State University in Tulsa, Oklahoma, and an adjunct associate professor of finance at the University of Maryland University College.
The Federal Reserve System was created in 1913 and soon did what central banks almost always do: it started printing lots of money. During World War [...]
The Greenspan Fed in Perspective
Some readers of the Wall Street Journal might have been led to believe that Alan Greenspan had somehow followed Milton Friedman’s monetary rule. We now see, though, that there was no well-grounded rule; there was no standard.
1Jun2006 | Roger Garrison | 0 comments | ContinuedInterest Rates and the Federal Reserve
Richard Ebeling is the president of FEE. His latest book is Austrian Economics and the Political Economy of Freedom (Elgar).
On June 30, 2004, the Federal Reserve Open Market Committee announced it was raising the targeted federal funds interest rate from 1 to 1.25 percent, to begin to prevent a possible future price inflation. The next [...]
Deficits Do Matter
Hans Sennholz served as president of the Foundation for Economic Education from 1992 to 1997. At the time of his retirement, FEE’s Board of Trustees honored him with the title president emeritus. He was chairman of the department of economics at Grove City College for many years. This article is reprinted from the December 1986 [...]
1Mar2004 | Hans F. Sennholz | 3 comments | ContinuedThe Awesome Powers of Government
Murray Weidenbaum holds the Mallinckrodt Distinguished University Professorship at Washington University in St. Louis, where he also serves as honorary chairman of the Weidenbaum Center on the Economy, Government, and Public Policy. He is the author of Business and Government in the Global Marketplace, seventh edition (Prentice-Hall, 2004).
Government possesses far more mechanisms that influence actions [...]
Ninety Years of Monetary Central Planning in the United States
Richard Ebeling is the president of FEE. His latest book is Austrian Economics and the Political Economy of Freedom (Elgar).
Ninety years ago this month, on December 23, 1913, the Congress passed the Federal Reserve Act, establishing a national central-banking system in the United States. The governing board of the Federal Reserve was organized on August [...]
Capital Letters
Who Controls the Money?
To the Editor:
“It Just Ain’t So!” by Richard Timberlake (December 1999) contains material errors that mislead readers. The Federal Reserve does not, as Professor Timberlake writes, have “monopoly power to increase or decrease the economy’s stock of money.” It is the banking system (of which the Fed is a component) that has [...]
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The End of Prosperity: How Higher Taxes Will Doom the Economy–If We Let it Happen
By Arthur B. Laffer, Stephen Moore, and Peter J. Tanous
