Booms and Busts

The Federal Reserve claims to be independent and politically neutral. But since its actions have political ramifications, it is impossible for the Fed to be either.

One of the great myths of US history is that Herbert Hoover was a laissez-faire president. In truth, he intervened in the economy more than any of his predecessors, creating the crisis known as the Great Depression. His successor made things even worse.

While Vivek Ramaswamy was unsuccessful in his Republican presidential primary bid, at least he helped to demystify the Federal Reserve. This is not the usual political rhetoric the public receives.

Henry Hazlitt's The Failure of the New Economics remains the best criticism of J.M. Keynes's General Theory.

A recent CNN broadcast claimed that deflation was bad for the economy and that we need to adjust to higher prices. As usual, the journalistic “experts” got it backward.

Few economists—even the free-market advocates—understand what caused the Great Depression. No, the Fed didn’t cause the Depression by failing to inflate the currency. Instead, it was the Fed’s inflation that led to the disastrous early events.

Many of the high-flying businesses that received massive publicity turned out to be the creation of a bubble economy. Not all businesses are flashes in a pan; many of them continue to serve as the backbone of our economy.

President Nayib Bukele of El Salvador recently spoke at the Conservative Political Action

Far from being an “automatic stabilizer” that mitigates recessions by engaging in “countercyclical” spending, the welfare state actually makes recessions longer and deeper. Time to acknowledge that fact and do away with it altogether.

The Federal Reserve claims to be independent and politically neutral. But since its actions have political ramifications, it is impossible for the Fed to be either.