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43491. The Fed's Fatal Conceit

Author:
John A. Allison
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
I strongly believe that the recent financial crisis, ensuing recession, and slow recovery were primarily caused by government policy. The Federal Reserve made some very bad monetary decisions that created a bubble, i.e., a massive malinvestment. The bubble ended up being focused in the housing market largely because of government affordable housing policies—specifically, the actions of Freddie Mac and Fannie Mae, government-sponsored enterprises that would not exist in a free market. When Freddie and Fannie failed, they owed $5.5 trillion including $2 trillion in affordable housing (subprime) loans. It's true that a number of banks made serious mistakes, and I would have let them fail, but their mistakes were secondary and within the context of government policy.
Political Geography:
United States

43492. Only a Crisis Will Bring Money Reform

Author:
George Melloan
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
“Well, if I had a nickel, I know what I would do. I'd spend it all on candy and give it all to you. . . . Cause that's how much I love you baby.” That wasn't a very generous proposition even in 1946, when country singer Eddy Arnold wrote those words. But at least a nickel would buy a good-sized Baby Ruth or Clark bar. Today? A jelly bean, perhaps?
Political Geography:
United States and United Kingdom

43493. Banking Dysfunction

Author:
James A. Grant
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
"Has anyone bothered to study the cumulative effect of all these things?" the chief executive officer of JPMorgan Chase reasonably inquired of the chairman of the Federal Reserve Board at a bankers gathering in Atlanta last June. The CEO, Jamie Dimon, was referring to the combination of cyclical hangover and regulatory constriction. The chairman, Ben Bernanke, replied, "It's just too complicated. We don't really have the quantitative tools to do that" (Grant and Masters 2011: 1).
Political Geography:
America

43494. What Should a Central Bank (Not) Do?

Author:
Benn Steil
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The financial crisis that began unfurling in 2008 has led to the refashioning of the model central bank governor along the lines of Churchillian war leader, willing to try anything with the money he conjures to restore economic growth. This raises important questions as to what limits, if any, elected officials should impose on such aspiring great men, and what limits markets will ultimately impose on them if elected officials forbear. This article focuses on the second of these questions.
Political Geography:
United States

43495. L Street: Bagehotian Prescriptions for a 21st Century Money Market

Author:
George Selgin
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In Lombard Street, Walter Bagehot (1873) offered his famous advice for reforming the Bank of England's lending policy. The financial crisis of 1866, and other factors, had convinced Bagehot that instead of curtailing credit to conserve the Bank's own liquidity in the face of an “internal drain” of specie, and thereby confronting the English economy as a whole with a liquidity shortage, the Bank ought to “lend freely at high rates on good collateral.” Bagehot's now-famous advice has come to be known as the “classical” prescription for last-resort lending.
Political Geography:
England

43496. Gold and Government

Author:
Judy Shelton
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Something has gone terribly wrong with the world's monetary system. It's evident that some kind of fundamental reform needs to be implemented. The question is: Can governments be trusted to issue sound money, or is money too important to be left to the politicians?
Political Geography:
United States

43497. From Constitutional to Fiat Money: The U.S. Experience

Author:
Richard H. Timberlake
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the course of more than two centuries, the United States has had two monetary systems. The first was a gold-silver standard that was framed in its essentials by the U.S. Constitution. In practical terms, it said that any legal tender money created by the federal union or the states or the "people" had to be gold or silver coins, or redeemable in gold or silver coins of specified weight and fineness. Since both gold and silver were constitutional media, the country had a bimetallic standard that ultimately became a monometallic gold standard.
Political Geography:
United States

43498. The Coming Fiat Money Cataclysm and the Case for Gold

Author:
Kevin Dowd, Martin Hutchinson, and Gordon Kerr
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
A recurring theme in monetary history is the conflict of trust and authority: the conflict between those who advocate a spontaneous monetary order determined by free exchange under the rule of law and those who wish to meddle with the monetary system for their own ends. This conflict is perhaps most clearly seen in the early 20th century controversy over the "state theory of money" (or "chartalism"), which maintained that money is a creature of the state. The one side was represented by the defenders of the old monetary order-most notably by the Austrian economists Ludwig von Mises and Friedrich Hayek, and by the German sociologist Georg Simmel. The other side was represented by the German legal scholar Georg Friedrich Knapp and by John Maynard Keynes. They argued that on monetary matters the government should be free to do whatever it liked, free from any constraints of law or even conventional morality.
Topic:
War
Political Geography:
Germany and Australia

43499. Syria's Phase of Radicalisation

Publication Date:
04-2012
Content Type:
Policy Brief
Institution:
International Crisis Group
Abstract:
As the 10 April deadline Kofi Annan (the UN and Arab League joint Special Envoy) set for implementation of his peace plan strikes , the conflict ' s dynamics have taken an ugly and worrying turn. Syrians from all walks of life appear dumbfounded by the horrific levels of violence and hatred generated by the crisis. Regime forces have subjected entire neighbourhoods to intense bombardment, purportedly to crush armed opposition groups yet with no regard for civilians. Within the largest cities, innocent lives have been lost due to massive bomb attacks in the vicinity of key security installations. Perhaps most sickening of all have been pictures displaying the massacre of whole families, including the shattered skulls of young children. The first anniversary of what began as a predominantly peaceful protest movement came and went with only scattered popular demonstrations. Instead, there was immeasurable bloodshed.
Topic:
Conflict Resolution, Political Violence, Armed Struggle, and Sectarian violence
Political Geography:
Middle East, Arabia, United Nations, and Syria

43500. Why Monetary Freedom Matters

Author:
Ron Paul
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
I've thought about and have written about the Federal Reserve for a long time. I became fascinated with the monetary issue in the 1960s, having come across the Austrian economists, especially Hayek and Mises, and I was very impressed with August 15, 1971, because the predictions made in the 1960s came about. As a matter of fact, Henry Hazlitt made that prediction in 1944 when the Bretton Woods system was set up. He said it wouldn't work and it would fall apart—and it did—so that was a strong confirmation.
Political Geography:
United States and Australia