(OT) The United States federal government budget is in the range
The main concern of Rothbard and other hard currency advocates is the Federal Reserve. Not industry or the "military industrial complex" as such.
The problem perceived with the Federal Reserve is there is nothing "Federal" about it. No part of it is owned by the Federal government, yet it is not an ordinary private corporation either. The accusation is that it is a cartel run by a very small number of bankers who retain tremendous power over politicians and the political system.
I've enjoyed reading your posts on post WW1 USA history as it is an interest of mine too.
Was this episode of the Federal's Reserve history in the best interest of the USA? (for example) Sounds to me if the personal power of an individual banker (Bejamin Strong) and a politician (Herbert Hoover) was getting out of hand....and look what happened. The Federal Reserve bank was at the core of the power struggle.
eh.net
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Charting Twentieth-Century Monetary Policy: Herbert Hoover and Benjamin Strong, 1917-1927
Wueschner, Silvano A.
Reviewed for EH.NET by Mark Toma, Department of Economics, University of Kentucky.
Charting Twentieth-Century Monetary Policy by Silvano Wueschner, Assistant Professor of History at William Penn College, is a history of the political forces that shaped United States monetary policy during the 1920s. What is intriguing about this account is the injection of Herbert Hoover into the picture. While a big-time player in the Great Depression, Hoover was seemingly only a bit-player earlier in the 1920s as head of the Commerce Department. By documenting the birth and growth of Hoover's monetary policy agenda in the 1920s, Wueschner's analysis sets the stage for a deeper understanding of the politics of the Great Depression.
Wueschner's account of monetary policy during the 1920s unfolds as a struggle between Hoover who covertly exercised influence through kindred spirits on the Federal Reserve Board and Benjamin Strong who overtly exercised influence as Governor of the Federal Reserve Bank of New York. Simply put, Strong was a monetary internationalist who favored cooperation between the Fed and the Bank of England while Hoover was a monetary nationalist who favored rivalry among national central banks. On the domestic front, the tables were turned. Hoover was all in favor of cooperation -- as long as the Federal Reserve Board led the way with strong central powers over discount and open market operation powers. In contrast, Strong opposed the Board as monetary czar. He sought to increase the powers of the individual Reserve banks, particularly the New York Fed.
In the 1920s, the divisive issue between the two sides was whether the Fed's monetary policy would be "easy," as favored by Strong, to smooth the way for the international gold standard, or "tight," as favored by Hoover, to combat stock market speculation. The basic structure of the Federal Reserve seemed to favor Hoover since the original Reserve Act provided the Board with relatively strong powers to influence the discount rates established by the individual Reserve banks. The Act contained a loophole in the Board's control, however. Individual Reserve banks were authorized to conduct open market operations on their own. With the New York Fed playing a leading role, Reserve banks tended to purchase government securities for their own accounts when discount policy was tight. The overall result, as summarized in the title of the penultimate chapter "Easy Money," was that the easy money policy won by default. Strong's internationalism beat Hoover's nationalism in the 1920s.
Although beyond the scope of book, it is interesting to consider how the policy tension between Hoover and Strong in the 1920s set the stage for policy during the Great Depression. As is well known, the Hoover Administration won an isolationist victory on trade policy with passage of the Smoot-Hawley Tariff Act. Less purposefully, Hoover also attained the type of monetary policy that he had earlier sought as the Board effectively exercised its muscle in shutting down open market operations during the Great Depression. Hoover's fiscal and monetary nationalism carried the day.
Wueschner's history has much to offer two groups of academic researchers -- those with a general interest in the politics of US democracy and those with a special interest in the monetary policy of the early Federal Reserve. I, for one, was surprised to learn that the head of the Commerce Department in the 1920s played such an important role in shaping the course of monetary policy for decades to come.
Mark Toma is an Associate Professor of Economics at the University of Kentucky. His recent research ("Open Market Operations and the Great Depression," working paper) is on Federal Reserve policy during the 1920s and 1930s.
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The "hard currency advocates" (I'm one of them) would like to see this small group of bankers (The Federal Reserve)and "kindred spirit" politicians power brought under control. Yes, fiat money is the root of all evil. It gives too much power to politicians and bankers. 1929 and 2001 tell the story. Stock market speculation, inflation, boom and bust cycles, will steal most of the wealth from ordinary people. Fiat money greatly magnifies the intensity of normal economic cycles.
As far as Europe goes, yes we have very similar problems
but also pay more taxes and have even more bureaucrats. The money supply does not need "managing". It needs to be left alone.
Several sources think the IMF does no good whatsoever to third world countries either. There is evidence for that. All this interference and "managing" only makes things worse for almost everyone. Individual governments do have other very important functions to perform.
imho -g- |
