I remember when my economics professor in college asked the class: “Is the President the most powerful man in America?”
I didn’t respond.
Someone else said: “Yes.” Because duh.
The professor expected this. “No, actually. The correct answer is Ben Bernanke. He is the Chairman of the Federal Reserve. He is in charge of monetary policy.”
The half of the class that weren’t on their phones were intrigued.
The professor continued: “This is a good thing. It means that politics will not get in the way of the needs of independent monetary policy.”
This was before I understood (Austrian) economics. Looking back, I should have raised my hand to question the professor: “Professor, are there only two options? That is, are our choices between the independent Federal Reserve controlling the money and politicians doing it?”
I suppose he would have said yes. This is the way many academics think these days. The Chairman of the Fed can be in control or the President can or Congress can. Is this a problem?
Yes. It is a problem because nobody considers the alternative: Free market. A free market in money? Yes. Is that possible? No, it is illegal. But what if it was legal? Then the big banks would have long ago declared bankruptcy.
The Federal Reserve is a fraudulent insurance company for the bankers. But wasn’t the Fed created by the progressives? Yes. The progressives are not “for the people,” as they claim to be.
An independent chairman overseeing an independent Federal Reserve is a feature of Fascism. Fascism occurs when the state gives monopoly privilege to one private institution within a given industry, and the Fed is a legal cartel on the supply of money.
What if the President made these monetary policy decisions? We would be in a monetary dictatorship.
What if Congress made these monetary policy decisions? This would have us lean more toward socialism.
What if there was no monopoly, and the market was free to create its own currencies and monies? We would be a whole lot freer, have a whole lot less war, have a whole lot less debt, and have a whole lot more productivity and jobs. We would be living in a free(r) market.
Perhaps Ben Bernanke is the most powerful man in America. I don’t know. I don’t really care. But I do know, and I do care, that a system with a fraudulent source of monetary power also has a powerful source of poverty and tyranny. I do care that there is a set of economic elites who make economic decisions for the rest of the society. I do care that the state enforces the crony legislation that its beneficiaries write.
Let me put it this way. If monetary control was de-centralized and de-monopolized, the power would be affected in the same way. Where the money goes, so goes the power. Which of the three — the President, the Congress, or Bernanke — would you want with all the power?
That’s what I thought. Let the markets take care of the money.
Content published on the Young Americans for Liberty blog is only representative of the opinions and research of the individual authors. It does not necessarily reflect the views, goals, or membership of YAL.Published in