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Re: Yet Another Beltway ‘Libertarian’ Defense of the Fed

Tom, not only does Cato’s Bill Niskanen praise Bernanke’s job performance (as I also noted here), but here we have Cato Senior Fellow and former president of the St. Louis Federal Reserve Bank William Poole worrying about Congress “damag[ing] the independence of the Fed.” Why, that would be terrible! How can the Fed “do its job” if it is not “independent”? Imagine the havoc it might wreak on the economy!

[Cross-posted at LRC]

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{ 6 comments… add one }
  • Daniel Fallon June 19, 2009, 9:17 am

    Which government institution should get the award for being the most arrogant, elitist and prone to scientism? Should the award be named for one of the Koch’s?

  • Joseph Mises June 19, 2009, 9:31 am

    Well, I don’t think the Fed should be placed under the watch of the Treasury either, because then we’ll have the individuals that spend and spend pumping money left and right without stop. It’ll only be made easier with direct access to that pump.

    So, we should just abolish it. Keep it simple.

  • DJF June 22, 2009, 5:32 am

    So when will this former Federal Reserve President call for the FED’s independence from the bankers?

    As a President of the St. Louis Federal Reserve Bank, William Poole would have been voted into that office by 9 people.

    Three of those people are chosen by the banks to represent banks interest

    Three more of those people are suppose to represent the consumers of banks, that is industry, farmers etc. But its not these industries which chose, the banks chose them.

    So six out of the nine who voted Poole into his Presidents job are put into that position directly by the banks themselves

    The last three are chosen by the Federal Reserve in Washington whose members are chosen by the politicians who get campaign contributions and special deals from the banks.

    So there is no independent FED, the FED is nothing but a government enforced bankers cartel whose interest is in keeping the politicians and bankers both rich and powerful

  • David C. June 23, 2009, 1:48 pm

    I’m intrigued by the notion that central banks spring up when the public is in the mood to have a credit binge.

    We had our credit binge…in spades, right?

    Now we should be entering a long period where people are waxing fearful and distrusting of credit creation and the institutions that foster it. This makes me think that eventually the Fed will be either shut down or (shudder!) seized by Congress.

    This line of thought is best represented by Bob Prechter at Elliott Wave International. He wrote in his 1995 book on the coming trend change that after a deflationary collapse of the credit bubble occurred, it was entirely likely that Congress would seize the Fed and attempt to “restart” the economy directly by printing currency, igniting a currency hyperinflation after the damage of the credit deflation had already done its damage and was over.

    Perhaps the current controversy over the Fed is just the warm-up.

    http://www.elliottwave.com/freeupdates/archives/2009/06/19/More-Inflation-The-Easiest-Call-on-the-Planet.aspx

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