Monday, May 23, 2016

A Comment on "Secrets of the Temple" by William Greider

By Lew Rockwell

To his credit, Greider has changed the way journalists think about the Fed. Even his old paper,The Washington Post,no longer automatically defers to the central bank, where once it ran its pronouncements as fact. Also to his credit,Greider has angered financiers and bankers by telling the truth: that the Fed is the most powerful policymaking institution in America and maybe the world. (Those who profit from what Andrew Jackson used to call the Monster prefer to continue operating in the dark.)

Greider criticizes the Fed, but for all the wrong reasons.For example, he claims it isn't inflationary enough! And he calls for high, sustained inflation to create prosperity and justice. Inflation will resolve the eternal conflict between the rich and the poor, says Greider, in favor of the poor.

There is a seemingly eternal conflict, but it's between those who use the government to get rich, and the rest of us who are thereby made poorer.In his chapter on the founding of the Fed, Greider mentions the idea of the Fed as cartel, but he never brings it up again. His own·position is that the Fed came about through popular demand, stimulated by political movements for higher farm prices and an end to bank panics.

In fact, these groups provided only a political opportunity and an ideological excuse for the Morgan.Rockefeller forces-in cahoots with the politicians-to seize control ofthe dollar by establishing the Fed.Greider claims that·deflation, not inflation, benefits bankers, and says that the Fed seeks to promote "the virtual elimination of dollar inflation." But the central bank was established only to circumvent the strictures of the gold standard. That is it was founded to inflate...

Greider calls inflation. "a promising model for social equity. " "Many poor people" benefit since they don't have to bear the rising costs of medical care and housing with "Medicaid and public housing." Similarly, the "elderly" are "partially protected" from inflation because Social Security is "indexed to the inflation rate."

 

The above originally appeared at Mises.org

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