“If I am confirmed, I will be strictly independent of all political influences and will be guided solely by the Federal Reserve’s mandate from Congress and by the public interest” – Ben Bernanke
Helicopter Ben made some interesting statements lately, as reported by Reuters: “Bernanke Says Gold Standard Wouldn’t Solve Problems.” It’s a fantastic article for its clarity and forthrightness.
Consider this quote: “Since the gold standard determines the money supply, there is not much scope for the central bank to use monetary policy to stabilize the economy.” It’s a frighteningly honest statement. First, the gold standard “determines money supply” – meaning that the value of stored excess production is stable. If this were the case, there would “not be much scope for the central bank” … translation: “If we had stable money then the central bank couldn’t manipulate the money supply in the hopes of magically producing some economic benefit.” Of course, the fed doesn’t really produce an economic benefit, except for the wealthy and the bankers.
Then there’s this one: “Under a gold standard, typically the money supply goes up and interest rates go down in a period of strong economic activity – so that’s the reverse of what a central bank would normally do today.” Let me translate: “our money supply interventionism causes economic boom-bust cycles, and taking it away would prevent us from scrambling to fix the last problem we created.”
After having laid out a flippant complaint that fixing the money supply would negate the need for the Fed as well as the Fed’s ability to manipulate the system to the benefit of the wealthy, Helicopter Ben turns to, I kid you not, history to justify his role.
“The one thing people don’t appreciate, I think, is that central banking is not a new development. It’s been around for a very long time,” he said, citing the creation of the Swedish central bank in the 17th century.
Yeah, that means it’s a good idea.
I’ve got a post working up that I haven’t had time to really pull together about the nature of theocracy. Perhaps someday I’ll get there. For now, let me note that when you see a solution to a problem that doesn’t involve you (or your preferred ideology) and say “this won’t work – because it does not include me as the central focus” … maybe you’re a theocrat.