It Doesn’t Matter Who’s In Charge of Wrecking the Economy

Politicians fight over whether to keep or fire the current Federal Reserve Chairman. At issue is whether he has done a “good job.” What exactly constitutes a “good” or “bad” job as Federal Reserve Chairman? The Federal Reserve interferes in the operation of a private economy, usually creating problems in the short-run and always creating problems in the long-run. The Federal Reserve is based on politics, not economics. No government entity will ever act more rationally or competently than free, responsible individuals will act on their own behalf in an unregulated marketplace. Sooner or later every Federal Reserve policy is a bad thing if not a disaster. Consider the Great Depression, caused in large part by manipulation of the currency by the Federal Reserve. Consider the inflation of the 1970s caused by the Federal Reserve’s choice to inflate the supply of currency so politicians could spend as they wished. Consider the current Great Recession, triggered largely by a prior Federal Reserve Chairman’s manipulation of the interest rate, leading to the collapse of the housing market and all that followed. The dispute should not be over whether Greenspan, Bernanke or the “chairman du jour” is or isn’t a “good” Federal Reserve Chairman. The debate should be over why we even have a Federal Reserve at all.