Last week, the Federal Reserve announced it was going ahead with “quantitative easing.” Chairman Ben Bernanke said that he’d be buying $40 billion dollars of mortgage-backed securities every month, no end in sight.
Now, the traditional way that the Federal Reserve influenced the money supply, economist Randall Holcombe explains, was via “open market operations by buying and selling government securities.” But this changed in 2008 with the $85 billion AIG bailout: “Since then it has engaged in continual bailouts of financial firms and purchases of non-government securities. . . .
The Fed has moved from engaging in monetary policy in a way that was neutral toward various businesses and industries in the economy to one in which monetary policy is targeted toward specific firms and industries. This current foray, specifically targeted at the housing market, is crony capitalism.
It’s actually worse. It’s crank policy, as the redoubtable Mr. Peter Schiff summarizes: “Ben Bernanke’s plan to revive the U.S. economy and create jobs is to inflate another housing bubble. That’s it. That’s what the Fed’s got. That’s what it came up with. As if the last housing bubble worked out so well for the economy that the Fed wants an encore.”
Our leaders are obviously desperate.
And out of control. George Will states that the Fed has gone far beyond “mission creep” — it’s “mission gallop on part of the Fed, which is on its way to becoming the fourth branch of government — accountable to no one and restrained by nothing, as far as I can tell, in exercising both monetary and fiscal policy.”
This is what forsaking limited government and the Constitution gets you: a sort of frantic idiocy in aid of politically connected speculators and financiers.
This is Common Sense. I’m Paul Jacob.
How can protection, think you, add to the wealth of a country? Can you by legislation add one farthing to the wealth of the country? You may, by legislation, in one evening, destroy the fruits and accumulation of a century of labour; but I defy you to show me how, by the legislation of this House, you can add one farthing to the wealth of the country. That springs from the industry and intelligence; you cannot do better than leave it to its own instincts. If you attempt by legislation to give any direction to trade or industry, it is a thousand to one that you are doing wrong; and if you happen to be right, it is work of supererogation, for the parties for whom you legislate would go right without you, and better than with you.
I didn’t know I was a slave until I found out I couldn’t do the things I wanted.
I am credited with being one of the hardest workers and perhaps I am, if thought is the equivalent of labour, for I have devoted to it almost all of my waking hours. But if work is interpreted to be a definite performance in a specified time according to a rigid rule, then I may be the worst of idlers. Every effort under compulsion demands a sacrifice of life-energy. I never paid such a price. On the contrary, I have thrived on my thoughts.
Nobody would work for starvation wages if he were not in a situation in which he preferred such wages to not working at all.