MLM Directory

Are fixed interest rates by the Fed an example of economic planning or a Laisezz Faire free market?

Doesn't manually controlling the money supply interfere with supply and demand? future, Bernanke is a clone of Greenspan. And Greenspan created the largest financial buble in all of history.

Public Comments

1. I believe (but I'm not sure) that the PRIME lending rate set by the Fed is what the GOVERNMENT AND TAXPAYER gets in return for guaranteeing all the loans made by private business and individuals - so the taxpayer gets RIPPED OFF when the rate is set too low - and there is no RESERVES to bail anybody out when the system crashes.
2. The Gold Standard failed. It was a colossal market failure that revealed the inherent contradictions of a market in money. That's why the Federal Reserve was created, to try to temper the booms and awful, unavoidable busts. Since Alan Greenspan fell asleep at the switch (due to his Libertarian leanings), he turned the Fed back into a laissez-faire organization (with the caveat of the legal mandate to minimize inflation and maximize employment). We all know how that turned out- another bust. {REP. HENRY WAXMAN: The question I have for you is, you had an ideology, you had a belief that free, competitive -- and this is your statement -- "I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We've tried regulation. None meaningfully worked." That was your quote. You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price. Do you feel that your ideology pushed you to make decisions that you wish you had not made? ALAN GREENSPAN: Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to -- to exist, you need an ideology. The question is whether it is accurate or not. And what I'm saying to you is, yes, I found a flaw. I don't know how significant or permanent it is, but I've been very distressed by that fact. REP. HENRY WAXMAN: You found a flaw in the reality... ALAN GREENSPAN: Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak. REP. HENRY WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working? ALAN GREENSPAN: That is -- precisely.} House Committee on Oversight and Government Reform. Oct 23, 2008
3. Economic planning or what I would call central planning.
4. The fed does not plan it reacts to the economy. There has never been a true Laisezz Faire free market because for markets to work their must be a government that protects property rights, makes and enforces rules for commerce and provides a system to settle disputes, In doing this they encourage or discourage different activities and this could also be called planning. Doing something about money has always been one of the things governments did