Should We Kill the Fed?
by Patrick J. Buchanan on April 03, 2009
For the financial crisis that has wiped out trillions in wealth, many have felt the lash of public outrage.
Fannie and Freddie. The idiot-bankers. The AIG bonus babies. The Bush Republicans and Barney Frank Democrats who bullied banks into making mortgages to minorities who could not afford the houses they were moving into.
But the Big Kahuna has escaped.
The Federal Reserve.
”(T)he very people who devised the policies that produced the mess are now posing as the wise public servants who will show us the way out,” writes Thomas Woods in Meltdown.
Already in its sixth week on the New York Times best-seller list, this eminently readable book traces the Fed’s role in every financial crisis since this creature was spawned on Jekyl Island in 1913.
The “forgotten depression” of 1920-21 was caused by a huge increase in the money supply for President Wilson’s war. When the Fed started to tighten at war’s end, production fell 20 percent from mid-1920 to mid-1921, far more than today.
Why did we not read about that depression?
Because the much-maligned Warren Harding refused to intervene. He let businesses and banks fail and prices fall. Hence, the fever quickly broke, and we were off into “the Roaring Twenties.”
But, the Fed reverted, expanding the money supply by 55 ...