Wednesday, October 6, 2010

If I Had a Hammer

Here, president of the Chicago Federal Reserve Bank, Charles Evans, calls for increasing the already bountiful monetary base (high-powered money).  Yeah, right.  That'll work.  Look how well it's helped stem the Great Recession so far.  Read here for a more extended explanation of why expanding the money supply won't help.

Evidently, the Fed believes that most every economic problem can be solved by growing the money supply.  That's the Fed's main hammer, you know, so just about every problem looks like a nail to the Fed.

Is anyone but me wondering why growing the money supply would work now, since it hasn't ever resulted in economic prosperity before?  Read here for an extended explanation of what will happen when the Fed engages in still more "quantitative easing," as the Fed likes to call it.

If more money in the economy won't spur a recovery, what will?  If you read this blog once and a while, you already know.  Production of real goods and services and voluntary exchange free of government regulation and control will fan the flames of recovery. Nothing else will.

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