Wednesday, October 22, 2014
1012 C Street  •  Floresville, TX 78114  •  Phone: 830-216-4519  •  Fax: 830-393-3219  • 

Lost & Found

Found tan hunting dog. Elderly male not neutered or chipped. Please call 8303915099.
Lost: Diamond set in gold mounting prongs, fell off my wife's wedding ring, in Floresville, reward offered. 210-867-1319.
If you are missing a pet in Floresville, be sure to check the Floresville holding facility. Animals are only kept for 3 days. Contact Las Lomas K-9 Rescue, 830-581-8041.
More Lost & Found ads ›

Help Wanted

Journeyman and/or apprentice electrician needed, experience necessary. Sralla Electric, Floresville, 210-885-4101, email resume to srallaelect@netzero.net.
Mission Road Ministries is a nonprofit organization serving more than 825 children and adults with intellectual & other developmental disabilities each day with residential, day services and vocational programs in San Antonio, Texas helping clients reach independence, productivity and inclusion in the community. Seeking Residential Care Professionals for our Children and Adult Programs; FT, PT.  $8-$10.25/hr. depending on experience and education.  Must be at least 21 years of age; pass background check and drug testing.  Interviews every week. Call for an appointment, 210-924-9265.
More Help Wanted ads ›

Featured Videos





Video Vault ›

Commentaries


Delete the Fed




E-Mail this Story to a Friend
Print this Story

Disclaimer:
The author of this entry is responsible for this content, which is not edited by the Wilson County News or wilsoncountynews.com.
Sheldon Richman
August 20, 2013 | 1375 views | Post a comment

Who should run the Federal Reserve System when chairman Ben Bernanke’s term expires next year: Vice Chair Janet Yellen or former Obama adviser Lawrence Summers?

Neither.

Who then?

No one.

The fact is, we need the Federal Reserve like we need a hole in the head. Contrary to folklore, the Fed is not needed to stabilize the economy or to prevent unemployment. As the Fed heads into its second century, we ought to realize that its record is terrible. Even if we don’t count the 1920s (which some economists call the practice decade), America’s central bank is a flop. Monetary economists George A. Selgin, William D. Lastrapes, and Lawrence H. White wrote in “Has the Fed Been a Failure?”:
Drawing on a wide range of recent empirical research, we find the following: (1) The Fed’s full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment. (2) While the Fed’s performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I.

The authors support that generalization with details. On inflation: “Far from achieving long-run price stability, [the Fed] has allowed the purchasing power of the U.S. dollar, which was hardly different on the eve of the Fed‘s creation from what it had been at the time of the dollar’s establishment as the official U.S. monetary unit, to fall dramatically” -- by 95 percent.

Selgin, Lastrapes, and White also show that the central bank has given us longer recessions and slower recoveries.

But without the Fed, who would set interest rates to guide the economy? The first answer is that government policy and Fed manipulations can create the very recessions that the Fed then tries to reverse. If the politicians and their court economists would get over their hubristic belief that they are stewards of the economy, macroeconomic crises would disappear.

Besides, the Fed cannot set interest rates, not even its narrow federal-funds rate for overnight interbank loans. At most, it targets that rate by buying and selling government securities, but it doesn’t always hit its target. The idea that the Fed can even heavily influence mortgage and other interest rates ignores important facts.

First, the Fed’s operations are small compared to the complex U.S. and world economies. Writes monetary economist Richard Timberlake,

Traditional economics properly teaches that many complex market forces -- countless investment and savings decisions not dependent on monetary factors -- are essential in determining interest rates. The Fed funds rate that Fed policy can influence through its monopoly over the quantity of money is inconsequential in shaping most short-term and long-term rates in capital markets, unless that moneymaking power subsequently promotes a pervasive price inflation. [Emphasis added.]

Second, the Fed can’t lower rates through monetary inflation beyond the very short run. Why not? Because lenders will respond by raising their rates to avoid being screwed by price inflation -- unless the Fed prevents the inflation, as it’s been doing, by effectively borrowing back the new money from the banks at interest.

Moreover, as monetary economist Jeffrey Rogers Hummel points out,
Globalization, with the corresponding relaxation of exchange controls in all major countries, allows [investors] easily to flee to foreign currencies, with the result that changes in central-bank policy are almost immediately priced by exchange rates and interest rates. Add to this the ability to purchase from many governments securities that are indexed to inflation, and it becomes highly unlikely investors will be caught off guard by anything less than sudden, catastrophic hyperinflation (defined as more than 50% per month) -- and maybe even not then.

While inflation is not the threat it once was, the Fed is not harmless. “Bernanke has so expanded the Fed’s discretionary actions beyond merely controlling the money stock that it has become a gigantic, financial central planner,” Hummel writes.

No one should have such power.

Money was not invented by government. It was the spontaneous creation of people trying to ease exchange in the marketplace. Central banks like the Fed only messed money up, robbing the people while facilitating warfare and welfare spending through irresponsible large-scale government borrowing.

Therefore, the Fed should be deleted.

Sheldon Richman is vice president and editor at The Future of Freedom Foundation in Fairfax, Va. (www.fff.org).
 
« Previous Blog Entry (August 18, 2013)
 


Your Opinions and Comments
Be the first to comment on this story!

You must be logged in to post comments:



Other Commentaries



Commentaries
Commentaries page govtrack.us
Commentaries who represents me?

Drama KidsTriple R DC ExpertsSacred Heart SchoolBlue Moon Karaoke & DJHeavenly Touch homeWilson's Auto ChooserVoncille Bielefeld homeChester WilsonAllstate & McBride Realty
  Copyright © 2007-2014 Wilson County News. All rights reserved. Web development by Drewa Designs.