{"id":8990,"date":"2015-06-11T06:15:55","date_gmt":"2015-06-11T11:15:55","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8990"},"modified":"2015-06-11T06:15:55","modified_gmt":"2015-06-11T11:15:55","slug":"how-could-the-fed-protect-us-from-economic-waves","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8990","title":{"rendered":"How Could the Fed Protect Us from Economic Waves?"},"content":{"rendered":"

How Could the Fed Protect Us from Economic Waves?<\/a><\/h3>\n

Making Waves<\/strong><\/p>\n

Mainstream economists tell us that the Federal Reserve protects us from economic waves, indeed from the business cycle itself. In their view, people naturally tend to go overboard and cause wild swings in both directions. Thus, we need an economic central planner to alternatively\u00a0stimulate<\/em>\u00a0us and then\u00a0take away the punch bowl<\/em>.<\/p>\n

\"Fed_Reserve\"Newspapers report on the adoption of the Federal Reserve Act. It was erroneously held that it was going to be \u201ca constructive Act to aid business\u201d. Ominously, even more such acts were promised.<\/p>\n

 <\/p>\n

Prior to the global financial crisis of 2008, a popular term described the supposed benefits created by the Fed. The\u00a0Great Moderation<\/a>\u00a0referred to the reduced volatility of the business cycle. For example, I have\u00a0written before<\/a>about economist Marvin Goodfriend, who asserted that the Fed does better than the gold standard.<\/p>\n

 <\/p>\n

\"toon\"(Credit: Greg Ziegerson and Keith Weiner)<\/p>\n

An Orwellian Mandate for the Provision of Miracles<\/strong><\/p>\n

This belief is inherent in the Fed\u2019s very\u00a0mandate from Congress<\/a>. The Fed states its three statutory objectives as, \u201cmaximum employment, stable prices, and moderate long-term interest rates.\u201d These terms are Orwellian.<\/p>\n

Maximum employment<\/em>\u00a0means five percent of able-bodied adults can\u2019t find work.\u00a0Stable prices<\/em>\u00a0are actually rising relentlessly, at two percent per year. The meaning of moderate long-term interest rates<\/em>\u00a0must be changing, because rates have been falling for a third of a century.<\/p>\n

That aside, the basic idea is that the Fed has both the power and the knowledge to somehow deliver an economic miracle. However, we know that central planning never works, even for simple things such as wheat production. Communist states have invariably failed to produce the food to keep their people alive. Stalin, Mao, and other communist dictators have deliberately starved off segments of their populations that they couldn\u2019t feed.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

How Could the Fed Protect Us from Economic Waves? Making Waves Mainstream economists tell us that the Federal Reserve protects us from economic waves, indeed from the business cycle itself. In their view, people naturally tend to go overboard and cause wild swings in both directions. Thus, we need an economic central planner to alternatively\u00a0stimulate\u00a0us […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[6275,6276,5451,98,125,1675,303,305,6170],"class_list":["post-8990","post","type-post","status-publish","format-standard","hentry","category-economics","tag-actingman","tag-boom-bust","tag-boom-bust-cycle","tag-business-cycle","tag-central-planning","tag-economic-cycles","tag-fed","tag-federal-reserve","tag-pater-tenebrarum"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8990"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8990\/revisions"}],"predecessor-version":[{"id":8991,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8990\/revisions\/8991"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}