And Don Boudreaux says his playing is way off key:
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Fed Chairman Ben Bernanke asserts – as if it is an incontrovertible fact – that
“The Fed played a major part in arresting the [current] crisis” (“The right
reform for the Fed,” Nov. 29).
First, it’s unclear if our economic troubles have been “arrested.” More likely,
they’ve been delayed and aggravated by the additional moral-hazard unleashed by
the bailouts and, even worse, by the gargantuan recent increases in the money
supply.
Second, IF it’s true that there’s now light at the end of this tumultuous
tunnel, no real evidence exists to support Bernanke’s claim that the reason for
our good fortune is Fed policy. Writing in the Christian Science Monitor in
September, economist George Selgin observes that recessions “do eventually end,
with or without central bankers’ help. According to the National Bureau of
Economic Research, the US went through 32 recessions between 1854 and 2001, the
average duration of which was about 17 months – or a few months shorter than the
current recession, so far.”*
For the first 60 of these years America had no Fed or any other central bank.
During the other 87 of these years, the Fed often either did nothing to arrest
recessions or reacted positively to recessions in ways that economists now agree
worsened matters.
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030
* George Selgin, “Did Bernanke save us from another Great Depression?” Christian
Science Monitor, 17 Sept. 2009:
http://www.csmonitor.com/2009/0917/p09s01-coop.html
