No more Fed after today I promise! I’ll do something fun next.

Criticisms:
News flash - The Fed is a government entity and there are people out there that hate it. Ranging from wild conspiracy theories about Jews controlling the world to the simple “unconstitutional” argument there is no shortage of criticisms against the Fed. We’ll start with the basic arguments. The most simplistic is the fact that Ron Paulour money is no longer based on the gold standard (see Nixon Administration). The gold standard has its own problems and the fight between the two is a post for another day. Texas Congressman Ron Paul has argued the Fed is not constitutional. The argument lies with the Constitution granting money printing powers to Congress, and Congress then passed it off to the Fed. The line is drawn in that the Fed is not an arm of Congress. You can make your own decision about this.

Some argue if the Fed is even necessary, or if its presence has made the situation worse. Ben Bernanke admits the Fed screwed up in its handling of the Great Depression. Its arguable that inflation has been worse since the Fed’s inception over previous centuries.

Personal Opinion:
The Fed is not perfect. Even right now I feel inflation control is much more important than battling recession, though some in the Fed disagree. I believe in the Free Market and allowing this market to set its own prices and interest rates. However not everyone believes in this and in our country their opinion matters too. In the long term the market has proven that it can find the right price, but in the short term everyone’s personal interests get in the way of this. The United States has been blessed with a great balance of government control and individual liberty. We can always argue when the government crosses the line. But, in 200+ years I think our country has done a great job. Maintaining a balance is always going to require teetering back and forth, its the job of our citizens to make educated and informed decisions based on how they feel.

In summary, I could start an entire blog on the Fed alone. Its a great topic and a great conversation piece. Just talking about the Fed makes you feel smarter; it inspires me to do additional research to broaden my knowledge.

Related posts:

  1. Weakon 180: Intro to the Fed, Part I
  2. Weakon 180: Intro to the Fed, Part II
  3. Weakon 117: Intro to Government Spending
  4. Weakon 131: Mortgages
  5. Weakon 231: How the Mortgage Industry Works (or Worked!)

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