By David Stockman | David Stockman’s Contra Corner
Part 1
Here is a head-scratcher. During the long 46-year stretch from February 1974 to February 2024 “required reserves” in the US banking system climbed steadily from $35 billion to $208 billion.
And then, bang! By orders of the Federal Reserve that number cliff-dived to zero in one fell swoop.
Required Bank Reserves, 1974 to 2020
It’s not that the detention of nearly a quarter trillion dollars of commercial bank assets in Fed-mandated reserve accounts had been all that onerous. By that point in time, the Fed was paying 1.60% on required reserves or essentially the same as could be earned in the open money market, where the Fed funds rate was 1.58%, and far more than the yield on depositor CDs, which stood at a piddling 10 basis points.
No, the more pertinent question is why didn’t the Fed declare victory on its 1913 mandate and close-up shop in March 2020?. After all, Carter Glass, the Fed’s legislative author, had given the new system of 12 regional reserve banks a very narrow remit: Namely, to ensure an “elastic currency” by providing Fed-created credits (reserves) to its member banks, albeit at a penalty spread over the free market rate on short-term money and on the back of sound commercial loan collateral.
That is, as a reserve provider of last resort, the new Fed was intended to obviate the periodic “panics” and bank runs that occurred when over-extended banks were forced to call in loans in order to meet depositor withdrawals while maintaining required reserve balances. At times, this contraction process became self-fueling, causing fearful depositors to drain their accounts for cash, which then disappeared into mattresses and other hoarding venues, thereby causing banks to call even more loans and stimulating even further demands for currency.
These periodic banking system contractions and related bouts of paper money hoarding led to the impression that the US hand-to-hand currency of the day was “inelastic”. This was especially thought to be the case at harvest time or during material disruptions of commerce caused by floods, fires, earthquakes and the like.
In this context, therefore, Federal Reserve Discount Window advances would help member banks meet cash requirements in lieu of calling loans and disrupting commerce. As far as the so-called macro-economy was concerned, that was the Fed’s sole function: The cash advances offered at the Fed Discount Windows would keep banks liquid, avoid runs on paper money and keep the wheels of commerce humming.
Importantly, there was no 1913 mandate for targeting, fighting or controlling inflation. The dollar was convertible into gold and that was all the anti-inflation machinery that was needed.
Likewise, there was no mandate at all to promote growth, jobs, housing, business investment etc. The core belief of the Fed’s founders was that once shielded from unecessary banking panics, the free enterprise system would take care of the rest. Investors, entrepreneurs, savers, consumers and workers did not need Fed targets, guidance and stimulus to find there way forward—they did that on the incentive of their own self-interest
In turn, because gold had the anti-inflation remit and free enterprise held the jobs and growth mandate, the Fed’s founders and early officials did not worry for a minute about the dilemma that present-day Fed heads never stop jawing about. To wit, the purported Phillips Curve trade-off between jobs and inflation and finding just the right interest rate and tweak of the monetary dials to optimize the two.
To the contrary, Congressman Glass and the Fed founders correctly understood that economic growth and rising worker wages do not cause inflation. On the free market, competition keeps wage increases in line with productivity gains, while aggregate growth is a function of supply side investment and output, meaning that demand is always preceded by additional production and income (i.e. Say’s Law).
Accordingly, you only get so-called “excess demand” and the resulting inflation when the monetary authority injects fiat credit into the economy that is either—-
- Not backed by prior production of goods, services and incomes.
- Or not convertible into gold or another hard monetary asset on demand.
The post-1914 central banking regime in the US did not strictly adhere to these norms because gold convertibility was sharply circumscribed by the gold exchange standard of the 1920s, the FDR ban on private gold ownership in 1933 and the Bretton Woods gold exchange standard variation between 1945 and 1971. Still, however, apart from the wartime exceptions treated with below, inflation was low, growth was strong, jobs were plentiful and real living standard rose robustly.
These metrics are shown below for the period between Q2 1951 and Q2 1966. This span roughly marks the Fed’s “golden age” under William McChesney Martin, spanning the years between the so-called Treasury Accord of March 1951, which freed the Fed of its World War II mandate to peg interest rates at 3/8ths on the Treasury bill and 2.5% on the long bond, and mid-1966 when the Fed succumbed to unrelenting pressure from LBJ to monetize his massive “guns and butter” borrowing spree.
Needless to say, the telltale sign that the Fed is pursuing an activist macro-management agenda rather than its historic remit to passively supply bank reserves in response to the ebb and flow of commerce on main street is a balance sheet growth rate well in excess of real production and income growth in the private economy.
As shown below, that did not happen during 1951 to 1966: The Fed’s balance sheet grew by just 1.48% per year, below the rate of gain for any of the other significant macroeconomic variables:
Per Annum Growth Rate, June 1951 to June 1966:
- Fed Balance Sheet: 1.48%.
- CPI: 1.49%.
- Nonfarm jobs: 1.66%.
- Labor Productivity: 2.43%.
- Real Median Family Income: 3.00%.
- Real Final Sales of Domestic Output: 3.64%.
Moreover, not only were the growth and inflation metrics spectacular relative to present day performance, but further evidence that the central bank was run with a light touch on the macro-economy lies in the real Fed funds rate which prevailed during this 15 year interval. As shown in the chart below, the Fed kept the Fed funds rate (black line) well above the inflation rate (@ +2.0%) during expansions and allowed it to drift closer to inflation (purple line), but not below, only during recessionary corrections.
Y/Y Change In CPI Versus Fed Funds Rate, 1954 to 1966
Needless to say, since the Fed went into full-on macro-management or what we believe is better described as monetary central planning at at the time of the dotcom crash, the data have been turned upside-down. The inflation trend level is far higher and the real economy metrics have been far weaker—even as the Fed’s balance sheet has exploded and the real Federal funds rate has been pegged deep in negative territory.
Indeed, notwithstanding the fact that the Fed’s balance sheet grew 15X faster at an annual rate since 2000 than it did in the golden age, it has only the following dismal results to show for its fevered and relentless money printing: To wit, the inflation rate has been 70% higher; the jobs growth rate was 54% lower; productivity gains were down by 28%; real median family income growth dropped by 80%; and real final sales of domestic product expanded at a 44% lower pace.
Per Annum Growth Rate, June 2000 to June 2024:
- Fed Balance Sheet: 21.74%.
- CPI: 2.53%.
- Nonfarm jobs: 0.77%.
- Labor productivity: 1.75%.
- Real Median Family Income: 0.59%.
- Real Final Sales Of Domestic Output: 2.04%.
Not surprisingly, the above inflation versus Fed funds chart has been inverted. In the overwhelming share of time during the last 24 years, the Fed funds rate (black line) has been pegged below the inflation rate (purple line)—often by more than 200 basis points.
Y/Y Change In CPI Versus Federal Funds Rate, June 2000 to June 2024
So the question recurs. If the macro-economic outcomes are far worse, why did the Fed graft onto its original, and now obsolete, remit to function as a “bankers’ bank” passively supplying reserves to the banking system, today’s failed regime of active monetary central planning?
We address that crucial question in Part 2, but the spoiler alert should be more than obvious. Both ends of the Acela Corridor wanted it that way. Its effect was to inflate financial assets and cheapen the cost of Treasury debt. The speculators on Wall Street love it, as do the spenders and dispensers of free stuff domiciled in the Washington beltway.
Accordingly, the Fed’s remit to supply reserves to the banking system passed silently into the political goodnight when it abolished its own fundamental reason for existence during the March 2020 print-a-thon. But by then the beneficiaries of its destructive largesse had no reason to even notice.
Part 2
As we pointed out in Part 1, there has been a live fire test of the Fed’s monetary central planning regime and it has been found utterly wanting. To wit, between 1951 and 1966 the Fed’s balance sheet grew by the aforementioned 1.48% per year, but the economic metrics of main street were spectacular: Inflation stayed exceedingly low while real output, jobs, productivity and real median family incomes marched smartly higher.
Per Annum Growth Rate: June 1951 to June 1966 Versus June 2000 to June 2024:
- Fed Balance Sheet: 1.48% versus 21.74%.
- CPI: 1.49% versus 2.53%.
- Nonfarm jobs growth: 1.66% versus 0.77%.
- Labor productivity gain: 2.43% versus 1.75%.
- Real Median Family Income Increase: 3.00% versus 0.59%.
- Real Final Sales Of Domestic Output: 3.64% versus 2.04%.
To remind: The Light Touch monetary policy of 1951 to 1966 under William McChesney Martin was conducted largely within the “banker’s bank” model of central banking. That is to say, Martin wanted nothing to do with coddling the stock market or providing anything that remotely resembled what became the Greenspan et. al. “put” of modern times.
And for good reason: He had grown up in the household of one of the dissenting governors of the early Fed during the Roaring 20s and had become the youngest ever Chairman of the New York Stock Exchange during the 1930s. Given the speculative rot that was exposed by the 1929 Crash and the painful house-cleaning that occurred in the stock market during the decade thereafter, he had no interest whatsoever in using the tools of central banking to fuel the gambling spirits on Wall Street.
Likewise, Martin would not have dreamed of being complicit in the large-scale monetization of the Federal debt. By the 1950s, of course, the original Glassian ban against Federal Reserve ownership of the public debt had been cast aside to finance WWI and WWII, even as open market buying and selling of debt securities had largely displaced the Discount Window as a source of Fed credit.
But Martin did not wish to own one more dime of Federal debt than he felt was minimally necessary to keep the money market and Federal funds rate reasonably stable over the business cycle. Accordingly, he was neither in the business of pro-actively buying government debt in order to stimulate main street activity nor selling Treasury paper in order to fine tune the inflation rate to something like today’s hideous 2.00% target.
To the contrary, Martin knew that growth and inflation would take care of themselves in an economy not flooded by fiat credit from the central bank and the resultant inflation-fostering “excess demand” on main street. And he also knew that the Fed’s money market stability focus was just a modest evolution of its original lender of last resort function. That is, its primary focus was on the liquidity and stability of the commercial banking system, not the infinitely complex ebbs and flows of the vast interior of the GDP and its various sectors and components.
At length, Martin lost the the battle to keep central banking operations on a Light Touch basis owing to LBJ’s brutal pressure to enable the financing of the huge “guns and butter” deficits which broke out in 1967-1968. Thereafter, the Fed began buying government debt hand-over-fist relative to historic practice. This was was rationalized as an effort to stabilize the main street economy and ameliorate the business cycle after inflation broke out in the late 1960s and the economy was twice thrown into recession by the Fed’s clumsy efforts to quash the very inflationary fevers it had ignited.
Nevertheless, the proof is in the pudding. Between Q2 1966 and Q4 1982, which was the point at which Volcker had finally vanquished the 1970s inflation, the Fed’s balance sheet erupted by 7.3% per annum. This represented a growth rate of new central bank credit five-times higher than had occurred during the Martin golden age.
Of course, that also meant that the average CPI gain accelerated to nearly 7% per annum, while the output side of the economy badly faltered. Thus, during this 16-year inflation-ridden interval real final sales growth slumped by a quarter, productivity growth fell by by one-third and the gain in real median family income plunged by 71%, from 3.0% to 0.87% per annum.
The Great Inflation of the 1970s thus became the transition zone from a Light Touch “banker’s bank” model practiced by Chairman Martin during the golden age to the full-on interventionist, monetary central planning regime instituted by Alan Greenspan and his heirs and assigns.
During the final years of that transition, of course, Volcker had functioned as the sound money financial fireman who stilled the worst of the inflationary flames during his tenure between August 1979 and August 1987, but he never got the chance to restore Martin-style central banking on a steady-state post-inflation basis. The GOP politicians around the Gipper flat-out tricked him into handing Tall Paul his walking papers just as the opportunity to return the Fed to its more modest original remit became again possible in 1987 as inflation fell below 2%.
Then again, it may be wondered how Ronald Reagan, who was a genuine gold standard man, got bamboozled into firing the nearest thing to a gold standard proxy, as represented by Paul Volcker. Actually, it was quite simple: Volcker adamantly refused to monetize the huge Reagan tax cut and defense spending deficits. So the GOP pols wh0 desperately wanted to win again in 1988 hoodwinked the Gipper into preventative action. Indeed, had Volcker stayed in the saddle there would have been one helacious recession by the end of the 1980s owing to the US Treasury’s massive funding requirements during a time of essentially full-employment.
And that gets us to the Handmaid of Leviathan. At the end of the day, there is a huge difference between Fed credit issued from the Discount Widow on a passive basis in response to the ebb and flow of main street commerce, on the one hand, and Fed credit issued according to the whims and fallibilities of a 12-man FOMC attempting to steer the vast US economy based on dubious quantitative targets, deeply flawed and unreliable in-coming data and erroneous Phillips Curve theories of growth, employment, wages and inflation.
Even in the absence of gold standard convertibility, central bank credit issued at the Discount Window on the collateral of finished goods already produced or sold is essentially non-inflationary, as the advocates the real bills doctrine held a century ago. By contrast, democratic politicians have a virtually opened-end capacity to produce government IOUs. So when the latter becomes the collateral for central bank credit emissions, as is now the model, it is Katy-bar-the-door time both at the US Treasury’s debt issuance department and the Fed’s printing presses.
That’s why the public debt went from $300 billion in June 1966 to nearly $36 trillion at present. That represents a staggering 114X gain—-far, far beyond the 36X gain in nominal GDP during the same period.
And there can be little doubt that the Keynesian Fed caused this vast disconnect between the state’s soaring debt obligations and the US economy’s capacity to service it. The Warfare State, which will cost $15 trillion over the next decade, and the Welfare State, which will cost nearly $50 trillion, would never have reached their current girth, had the Fed not substituted the expansive ambitions of monetary central planning for its original modest remit of functioning as a banker’s bank.
So doing, the Eccles Building crew ground real interest rates to the vanishing point in the false pursuit of jobs, growth and incomes—a function that the free enterprise system was more than capable of handling on its own steam. The chart below thus depicts the continuous signal sent to both ends of Pennsylvania Avenue after Greenspan took the helm at the Fed in August 1987. To wit, the cost of Treasury borrowings in real terms got cheap, cheaper and cheaper still until the 2022, when the inflationary torrents of the 197os were resurrected and forced the Fed’s hand.
But the message in the chart is unmistakable: Spend. Borrow. Rinse. Repeat.
The great tragedy, of course, is that this would have never happened under the “banker’s bank” model operating exclusively through a passive Discount Window. Under the latter regime, Fed cash advances to member banks required sound commercial loan collateral and were priced at free market rates plus a penalty spread for accessing the state’s credit.
That is to say, free markets are not suicidal. The benchmark security of the entire US financial system—the 10 year US Treasury note—would never, ever have been priced to destroy investors and savers, while deeply subsidizing spendthrift government borrowers.
Inflation-Adjusted Yield On 10-Year UST, 1987 to 2024
At the same time, the radically falsified benchmark interest rate depicted above fueled the greatest Wall Street speculative mania of all time by drastically inflating PE multiples and reducing the funding cost of carry trades to virtually zero. Since 1989, therefore, the net worth of the top 1% of households have risen by $42 trillion or 900% while the US national income (GDP) underneath this massive asset valuation has grown by only 400%.
Under the Fed’s original remit this unspeakable windfall to Wall Street traders, speculators and leveraged financial engineering artists never would have happened, either. The Fed would have remained the banker’s bank, not become the Whore of Wall Street.
Index of Net Worth Of Top 1% Versus GDP, Q3 1989 to Q1 2024
So the question recurs. Now that that the Fed has essentially abolished it original business of providing reserves to the banking system is there anything left for it to usefully do besides its clearly failed game of monetary central planning and hyperactive fiddling with interest rates and financial asset values?
Part 3
Here is a smoking gun if there ever was one. The Fed’s Wall Street fanboys claim that yields on Treasury debt go down when the financial market in its clairvoyance anticipates a recession. Purportedly, credit demand falls sharply, thereby clearing the way for interest rates to fall, as well.
But when you look at the actual data—no cigar!
Household and non-financial business debt (black area) and total debt securities and loans outstanding for the combined public and private sectors (purple area) have risen relentlessly during the last seven recession cycles. Indeed, only in the case of the Great Recession of 2008-2009 was there even a temporary down-blip in debt levels. Even then, total debt outstanding fell by only 1.4%at the Q2 2010 bottom, while the decline for private sector debt alone (black area) was barely 5%.
After that, it was off to the races. With a vengeance.
Since the pre-crisis peak in Q4 2007, private sector debt outstanding has risen by 67% and total public and private debt is higher by 88%. In dollar terms, this means the US economy is now lugging around $46.5 trillion more debt than it was carrying when the US economy purportedly buckled under the weight of too much debt during the financial meltdown and recession of 2008 and 2009.
Goodness gracious. All the latter-day moralists at the time were wagging their tongues scornfully about the need for America to sober up and get off its debt binge. But a lot of good that did—not when the mad-money printers at the central bank professed to know better.
In any event, it is not “price discovery” in honest debt markets that causes interest rates to fall in anticipation of recession. Rather, Wall Street’s legions of unproductive speculators jump on the bond-buying bandwagon preemptively, thereby front-running the next round of Fed rate cuts in anticipation of falling yields and rising prices. That is to say, they have their bushel baskets wide-open, collecting unearned gifts from the Eccles Building dolts who falsely profess to be the indispensable monetary nannies who keep the free market on the straight and narrow.
What is being “priced out”, therefore, is not the blooming, buzzing mass of $28 trillion of GDP or even the supply and demand dynamics in the bond pits. Instead, the motor force of yields and interest rates is the mind games of 12 members of the FOMC who desperately wish to avoid a hissy fit by disappointed speculators—whom have already laid down heavy futures market bets instructing the FOMC as to exactly when and by how much they need to toggle interest rates in the periods immediately ahead.
Total Debt and Private Sector Debt Outstanding, 1970 to 2024
Stated differently, the FOMC is an abject captive of remorseless speculators down in the canyons of Wall Street. Anyone who looks objectively at the rising mountain of debt depicted above would not even be entertaining the thought that what America needs is even more debt on top of the $99.2 trillion reported for Q1 2024, which figure has already surely leapt over the one-hundred trillion dollar mark.
Yet here we have this morning CNBC’s leading Fed-fanboy, Steve Leisman, claiming that the Eccles Building is already way behind the curve and therefore needs to apply 100 basis points of rate cuts before year end, preferably with a 50 basis point “down payment” in September.
Then again, by what mode of economic reasoning can it be concluded that a tiny 100 basis point rate cut in the short-end of the money market will have any positive impact at all on a national economy that is lugging 100 trillion dollars of debt?
The only thing that a 100 basis point rate cut will actually do is revive carry trade profits on Wall Street or encourage some options-heavy C-suites to buy back more stock rather than pay-down debt or invest in productive assets at a higher rate.
Down on main street, by contrast, no household already up to its gills in debt is likely to borrow even more if the current personal loan interest rate, which according to Bankrate is 12.35%, is reduced to 11.35%. Besides, what responsible policy official should even want to encourage more household borrowing?
After all, the towering $14.3 trillion of household debt (mortgages, car loans, credit cards, student debt and personal loans) on the eve of the financial crisis is now $20.0 trillion! Do they really think that households can borrow and spend their way to prosperity?
Likewise, non-financial business debt has more than doubled from $10.4 trillion in Q4 2007 to $21.3 trillion. Yet has it ever occurred to the drunken Keynesian sailors holding the conn at the Eccles Building that main street business might actually function more productively at sharply lower levels of leverage?
For instance, American business was booming in late 1965 when total non-financial business debt amounted to 39% of GDP. Today, however, that leverage ratio is 75%and has been rising steady since Greenspan revived up the printing presses to bail-out Wall Street in the fall of 1987, when the non-financial business leverage rate was just 62%.
Nor is that the half of it. Here is another graph that we can guarantee the money-printers at the FOMC never, ever look at. To wit, aside from the lockdown and stimmy aberration of 2020-2021, when households were quarantined at home and forced to “save” all the money they couldn’t legally spend plus all the free stuff Washington was transferring to their bank accounts, the dollar level of combined business and household savings has not increased by one red cent.
That’s right. The annualized rate of combined household and non-financial business savings (i.e. retained earnings) in Q2 2024 was $1.565 trillion, a figure nearly identical to the rate posted way back in Q2 2010 (black line). That amounts to 14 years of treading water in nominal terms, in the context of an economy that experienced a 44% rise in the price level, a 100% rise in nominal GDP and nearly tripling of public sector debt.
Stated differently, these cats try to calibrate the inflation rate to the second decimal point, fuss endlessly about cockamamie U-3 unemployment rates that are not worth the paper they are printed on, but give not a hoot about the relative collapse of the very elixir of economic growth and rising living standards.
For crying out loud, households saved at a $703 billion annual rate in Q2 2010, which amounted to $6,300 per average US household. Yet during Q2 2024 that number posted lower at $686 billion, which amounted to only $5,200 per households.
In short, that Fed has literally man-handled and savaged private savers, causing the savings rate per household to plunge by 17% in nominal dollars and by more than 60% in real terms. Still, they just can wait to cut rates by 100 basis points but to do what?
Well, about the only reason we can see is to reassure Wall Street punters that the Eccles Building has their back.
Household, Business And Total Private Savings Level, Q2 2010 to Q2 2024
For want of doubt, here is the private sector savings ratio to GDP. Back in Q1 2012 when the US economy had fully recovered from the Great Recession, the private sector savings rate was 11.1% of GDP. It’s now half that—just 5.5% of GDP.
Yet here we are. Wall Street is hollering for rate cuts, savers are about ready to be monkey-hammered still again, and the ship of fools running the central bank is more than eager to oblige them. Has it ever occurred to them, however, that this chart should be on their so-called radar screens, too?
It isn’t, of course, because the reigning Keynesian orthodoxy says that the only thing that matters is spending and that the water level in the bathtub of GDP is up to the brim of “full employment”. Presumably, savings is a residual that doesn’t matter.
Net Private Savings % Of GDP, Q2 2010 to Q2 2024
The truth of the matter, however, is that private savings is the elixir of economic prosperity—the very opposite of an automatic residual that needs no never mind from monetary policy or any other policy arm of the state. Alas, savings is especially crucial when fiscal policy is geared to fattening the Leviathan on the Potomac via ratcheting the public debt relentlessly skyward.
That proposition is dramatized in the chart below. The latter measures net national savings or what is left after the borrow and spend mavens of the state have had their fill from the declining private sector savings rate depicted in the black line shown above. In a word, as time has passed since the early days of Alan Greenspan, there has been less and less left—until now the net savings cupboard is absolutely bare.
That’s right. Back in the heyday of American prosperity the net national savings rate (private saving less government deficits) was 10-12% of GDP, meaning that there was plenty of real money savings available for private investment in productivity and growth.
No more. And yet and yet. The Keynesian dunderheads at the Fed claim to be stimulating private growth and jobs, when, in fact, that are suffocating the lifeblood upon which they depend.
Net National Savings As A % Of GDP, 1951 to 2023
At length, what JM Keynes smugly called the euthanasia of the rentiers (i.e. savers) does catch-up. Since the turn of the century alone, net private investment (after inflation and current period depreciation and amortization of the existing capital stock) has dropped by nearly 30% as a share of GDP. That’s not much of a boost to the Fed’s purportedly sacred mission of stimulating jobs and growth, either.
Net Private Domestic Investment As % Of GDP, 2000 to 2022
Still, the talking heads of Wall Street were all over the financial press today saying that the slight down-tick in the U3-unemployment today from 4.3% to 4.2% was no reason for the Fed to delay showering the spenders of Washington and the speculators of Wall Street with still another round of cheap credit at its upcoming meeting latter this month.
If it weren’t so hideously ridiculous, however, we would say….puleeese!
Behind the curtain of the latest garbage produced by the BLS is that this tick lower in the top-line unemployment rate during the month of August happened despite a net loss of employment. That is, the US economy allegedly added 635,000 of foreign-born workers, but subtracted 1.325 million native-born workers. In the span of a single month!
No, 1.325 million domestic-born workers did not get fired, laid-off or drop dead during the past 30 days. No such thing is remotely possible given all the other source of jobs market information available—even if the trend has been toward more foreign born workers and fewer domestic workers—given that the latter were actually not born between 1965 and 2000 and so therefore could not be hired in 2024.
Indeed, if you ever need proof that the “incoming data” the Fed swears buy is pure noise and bureaucratically generated garbage, the chart below is absolutely it.
August 2024 Employment Change
At the end of the day, the Fed has not flattened the business cycle or even visibly modulated it. Nor has it contributed to an acceleration of growth jobs and incomes since it went all-in on monetary central planning in the early 1990s. And it surely hasn’t kept inflation contained in the jar, either. The purchasing power of the consumer dollar as of Q2 1966 when Chairman Martin got defenestrated by LBJ is now just 10 cents!
What it has done, of course, is function as the Handmaid of Leviathan on the Washington end of the Acela Corridor and the Whore of Wall Street up north.
Since the job that was actually assigned to it by Congressman Carter Glass back in 1913 is now vestigial and long gone, and the financial system has been flooded with massive liquidity for decades on end, it might well be time to declare victory and let the free market take care of jobs, growth, inflation and prosperity.
Whatever defects the latter might posses, they are surely trivial compared to the relentless harm and inequity fostered by the rogue band of money-printers now in charge of the money and capital markets, and, by the extension, the entire GDP and livelihoods of the American people.
Reprinted with permission from David Stockman’s Contra Corner.
