Daily Loaf

Will you stand? Comment what you’re standing for here locally in Tampa bay.

By Al Coryell
PoHo correspondent

In Part 1, Part 2 and Part 3 of this series of articles we have learned that, at present, there are two important competing economic philosophies. There is the Keynesian philosophy, practiced by the Federal Reserve, which purports to centrally control economic stability through price and monetary manipulation — and the Austrian School philosophy, which supports a hands-off approach to economic management contending that a truly free market will self-correct if left alone to do so. In this final installment of the series, we will ask “Can the Austrians possibly overcome the overwhelming power of the Federal Reserve and return the U.S. to a free market, sound money economic system?” Both sides are locked in a battle which will forever change the face of America, and much of the world, regardless of who wins…

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In Part 1 and Part 2 of this series we learned the origin of the Federal Reserve System and looked at the Keynesian economic philosophy, the preferred philosophy of economists who have run the Fed since the Great Depression. We learned that Keynesian economic philosophy is an anti-free market philosophy, one that supports a centrally managed economy utilizing money and interest rate manipulation and taxation to control prices in the economy. Now we will look at the Austrian School economic philosophy and make some comparisons. There is a battle shaping up in Congress between the proponents of each philosophy. The winner of the battle will ultimately decide our collective economic fates well into the future…

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Obama and Helicopter Ben

RECESSIONOMICS

I left you in Part 1 of this series with the statement the U.S. “has not had a truly free-market economy since 1913.” I hope you were able to draw the inference that that was the year the Federal Reserve System was created by the Federal Reserve Act of 1913. It was created to perform as a quasi-public banking system, i.e., a central banking system for the United States. In its infancy, the U.S. tried and failed several times to establish a central banking system. But a series of bank panics, in 1873, 1893, and 1907 provided the needed public approval for the creation of the Federal Reserve System in use today.

What the public was unaware of, however, was the ultimate cost that a Federal Reserve system would eventually impose on it… Read the rest of this entry »