When I published Floored! last October, I thought I'd said all I could say concerning the adverse consequences of the Fed's then decade-old decision to adopt a "floor"-type operating system. In the new arrangement, the Fed pays interest on bank reserves, and uses changes in the rate…
In my Twitter feed the other day, I came across a link to a website "dedicated to explaining and promoting awareness of Modern Monetary Theory." The site is called "We CAN Have Nice Things," and its summary of MMT seems to me to represent reasonably well how…
In a previous post, I argued that Paul Volcker didn't put a stop to inflation by having the Fed systematically increase interest rates when commodity prices rose, and lower them when commodity prices fell. While commodity-price targeting, aka a "price rule" for monetary policy, had some prominent…
John Maynard Keynes once marveled at “how, starting with a mistake, a remorseless logician can end up in Bedlam.” (Bedlam was the nickname of a London madhouse.) Keynesian or New Keynesian macroeconomists who start with the mistaken premise that a central bank cannot fight recession except by lowering…
Since the Bank Secrecy Act (BSA) came into force in 1970, banks and other financial institutions have been subject to extensive reporting requirements on the transactions they perform on customers’ behalf. In subsequent years, notably after 9/11 with passage of the USA PATRIOT Act, Congress has expanded…