Republicans Must Stop Yellen
Today, the Senate Banking Committee voted to confirm Janet Yellen as the next Chairman of the Board of Governors of the Federal Reserve. Republican Senators Coburn, Corker, and Kirk joined with Democrats in a 14-8 vote. [Correction: the post erroneously added Senator Vitter to the list. He voted no. Vitter has always been a leader in pushing for transparency at the Fed and has pushed | Read More »
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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Shining Light on the Fourth Branch of Government
This week, Federal Reserve Chairman Ben Bernanke will deliver his semiannual testimony before Congress defending his reckless monetary stimulus. He will testify before the Senate Banking, Housing and Urban Affairs Committee today and the House Financial Services Committee on Wednesday. Now is a good time for Republicans to demand more accountability from the fourth branch of government – the one not mentioned in the Constitution. | Read More »
Welcome to QE4!
The actions of the Federal Reserve over the past 4 years exemplify insanity more than anything else in politics. They continue implementing one monetary stimulus policy after another in an attempt to jumpstart the economy, even though they keep failing in that goal. We had QE1,2,3 and Operations Twist 1 and 2. Now the Fed’s Open Market Committee has announced a new monetary stimulus package | Read More »
Bread and Butter Issues: Free Markets, Monetary Stimulus, Purchase Power and Savings
So the Producer Price Index (PPP) increased at the highest rate since June 2009 (the “end” of the recession), but fear not, inflation hasn’t trickled down to the consumer end yet, say the wizards of smart. Except that it has. You can use all the data you want, American consumers know they are paying much more for virtually everything at stores, supermarkets, and retailers. And | Read More »
Mike Lee Wants to End the ‘Monetary Morphine’ at the Fed
What’s worse than Congress picking winners and losers and distorting the free-market with bailouts, stimulus, and tendentious interventions on behalf of specific industries? Unelected members of the Federal Reserve doing the same through monetary policy. It is amazing to watch how many Republicans will speak with such conviction against Keynesian fiscal stimulus policies, yet they will fervently promote monetary stimulus policies by the unaccountable Federal | Read More »
Interest rates: Egg on our Faces
Just when you thought US Treasury debt couldn’t get more overpriced, it gets… more overpriced. The 10-year yield fell all the way to 2.95% yesterday. It held that level for part of this morning, and now is just under 3%. At least some of this has to be due to the supply disruption caused by the US hitting its debt ceiling. (Existing debt can be | Read More »