Janet Yellin’s Predicted Monetary Policy And The Tragedy Of The Commons

    Garret Hardin’s intellectual popularity was a product of the Malthusian Fallacy. This doesn’t mean that he was analytically unintelligent. Even when Ptolemy argued the world was flat, given his data set he had a mathematical point that had to be systematically refuted by Copernicus, Kepler, Newton et al. Hardin makes the same sort of economic point, in his seminal piece “The Tragedy of The Commons” even if he is has been proven wrong about it with respect to human overpopulation.

    Hardin argues that commonly held property will be exploited without conscience because the costs thereof are not directly visible to those who use the property. The end result of this exploitation will be systemic failure as the exploitation is inexorably extended to a logistical limit beyond which a meta-stable economic system can no longer attain sustainable equipoise. Or as Instapundit Blogger-In-Chief Glenn Reynolds puts it, “That which can’t continue will eventually stop.” One example of a commons that is being exploited towards inevitable tragedy is the current monetary system involving fiat currency.

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    So What Could Go Wrong If You Owned Your Own Money Tree?

    Janet Yellin may not remind people of the boisterous cartoon character Buzz Lightyear, but her fete accompli elevation to the Chairmanship of the Federal Reserve probably implies Quantitative Easing to Infinity and Beyond! The White House announced that President Obama would nominate her to succeed Ben Bernanke this Tuesday. This bears significance because she is seen as being a strong advocate of quashing intrest rates in order to support lower unemployment. She is a classic Keynesian to the core in that sense and will not be willing to “taper” QE under anything like the current circumstances.

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