When the Federal Open Market Committee (FOMC) meets in Washington next week, its members are widely expected to vote to raise interest rates for the first time since June 2006. By doing so, they will move towards monetary policy normalization, after more than seven years of near-zero…
At the risk of belaboring the obvious, I feel compelled to begin this second installment of my response to Ben Bernanke’s memoirs with an observation — a platitude, if you like — concerning the proper role of emergency central-bank lending in a generally free economy. The observation…
[A well-known consequence of the Fed's rescue efforts consists of the "moral hazard" they pose–that is, their tendency to encourage extra risk-taking by persons who suppose that they, too, will be rescued if their wagers don't pay. Yet one particularly dangerous sort of moral hazard hasn't gotten…
Ben Bernanke's memoir is now out and is unapologetically pro-Fed. It is titled The Courage to Act. Here is the cover quote: The main point of Bernanke's book is that absent the Fed's interventions over the past seven years the U.S. economy would…