May 01, 2002


MAY DAY IN AMERICA: The always delightful Deroy Murdock reports on a National Taxpayers Union study that observes the various facets of the contemporary United States-- progressive taxation, vast tracts of federally-owned land, etc.-- that echo Marx. The most striking note is on the Fed:

The Communist Manifesto also counsels "centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly." Karl Marx, meet Alan Greenspan.

The Federal Reserve, worshipped as a cornerstone of capitalism, in fact is a spectacularly statist institution. It wields the power to create money and control interest rates and inflation. The 12-member Federal Open Market Committee is essentially a financial Politburo that secretly meets to fix the cost of capital.

I once explained Greenspan's function to an intelligent person with a limited grasp of economics. Her reaction was perceptive: "That seems like too much power for one guy to have." She was right; the notion that the judgement of one person (or a few people, though my impression is that the FOMC is very defferential to the Chairman) should direct the economy is a bad one. The best alternative: "A Gold Polaris" (long, but worth it if you're interested).

Posted by John Tabin at May 1, 2002 11:58 PM