Recently, two journalists (Tim Harford and Simon Kuper) working for the Financial Times of London attended the FT Weekend Festival. The topic of their onstage conversation was “the nightmare of writing a weekly column.” Tell me about it.
The … task of economics is to demonstrate to men how little they really know about what they imagine they can design. Friedrich von Hayek
The long and deep recession of 1930-33 finally ended in March of 1933. Once it ended the Fed, believing that the economy could now – and should now – fend for itself, backed off. The result was one of the most powerful economic expansions in US history, an expansion that lasted three decades.
We are talking about America’s Monetary Keystone Kops, who have, since 1987 (when Greenspan became chair of the Federal Reserve), been masquerading as central bankers. (Or maybe it’s the other way ‘round, it’s hard to tell.)
We’ve assessed the successes and failures of central bankers in the 1930s. Now let’s turn our attention to their modern counterparts.
The “gold standard,” which prevailed in the developed world for many decades, simply means that some fraction of a country’s paper currency has to be backed by – that is, convertible into – gold. In the US that fraction was 40%.
Scholars of the Great Depression typically blame policymakers of the 1930s for failing to do four things:
Subsequent to the Global Financial Crisis, US GDP has grown, in the aggregate, 37%. During the period of the Great Depression, US GDP grew, in the aggregate, 40%.
Not that anyone cares, but in these pages I’ve been highly critical of the “unconventional” policies pursued by every central banker on the planet since the Financial Crisis.
It was now late winter of 1971 and I was running the traffic division at the 226th MP Company at Fort Benjamin Harrison, outside Indianapolis.