Thomas Sowell: The Federal Reserve is a Cancer

[bobbyw24]

http://www.youtube.com/watch?v=tp3HEBNvZjk&feature=player_embedded

http://www.campaignforliberty.com/blog.php?view=40211

[Dissident]

I can't understand why the interviewer would scoff at Sowell's comments on the Fed as a cancer. He was "unprepared" for an answer that exposes how the Fed failed to meet the stated objectives that justified it's creation. Why exactly would you be unprepared for that? The notion of not questioning the validity of a system simply because it has been ingrained in society for a century is absurd. I love Sowell's response here. The real question is not if the Federal Reserve is a success or not but what will replace it?

It's also amusing how the token response to those critical of the Fed is assuming they are advocates for a gold standard. There seems to be a script followed of how antiquated the gold standard is, how cumbersome carrying gold on your person is, and how complicated the logistics of banking would be absent the Fed. This is a way of side-stepping the issue of having a serious dialogue on the need for legitimate monetary reform. By no means should a gold standard be discounted, but there are more options beyond the false choice of a gold-standard and fiat Federal Reserve notes.

[Teaser Rate]

The entire interview is worth listening to.


http://www.youtube.com/watch?v=bOMksnSaAJ4

[japes]

Best line of the interview, Sowell speaking about removing the Fed and replacing it with something:


When someone removes a cancer, what do you replace it with?

LOL!

[Slutter McGee]

Interesting. Most monetarists don't like the FED and the way it opperates but still find it a necessary evil. I have always liked Sowell. Time for Chicago and Austria to come together for a while.

Slutter McGee

[hugolp]

Interesting. Most monetarists don't like the FED and the way it opperates but still find it a necessary evil. I have always liked Sowell. Time for Chicago and Austria to come together for a while.

Slutter McGee

If Chicago accepts chaging its monetary views and austrians relax on method its not that difficult.

[low preference guy]

If Chicago accepts chaging its monetary views and austrians relax on method its not that difficult.

i don't think the latter is going to happen. and in my opinion, shouldn't.

[erowe1]

If Chicago accepts chaging its monetary views and austrians relax on method its not that difficult.

Could you specify what you mean by method?

[low preference guy]

Could you specify what you mean by method?

You can't get economic laws doing experiments. Economics is radically different from the natural sciences, where you can just change one factor among different experiments. To test economics empirically, you would have to implement one policy in one society, and then compare it to a second society which is exactly equal to the first society in every possible way except for not having that one policy the first society has. That is impossible. Thus, you don't do economics by doing empirical analysis.

For example: Let's analyze minimum wage laws. If your productivity only helps a company make $200 more dollars, and the minimum wage is $500, you won't get hired. Thus, minimum wage laws, all else equal, increase unemployment. Krugman and some nuts claim this is not always true! And they use empirical methods. But again, empirical methods are inappropriate for economics.

Austrians reject the use of historical statistics as a proper methodology for the discovery of knowledge. It may help to illustrate informally which policies works better, but the formal demonstration of the validity of the knowledge doesn't use statistics, or history, or experiments.

[Slutter McGee]

Could you specify what you mean by method?

Basically, Austrians use logical statements and axioms, while Chicago focuses more on statistical analysis. The Austrian school is a little more freemarket, but the Chicago school is a close second.

Slutter McGee

[Fox McCloud]

If Chicago accepts chaging its monetary views and austrians relax on method its not that difficult.

the latter will likely never happen...the former though? I could definitely see s subset of the monetarist jump ship in regards to monetary policy.