episode 56: Deconstructing the Federal Reserve with George Selgin and Norbert Michel



If the Fed brought home a report card reflecting its performance since its creation in 1914, its parents would not be pleased. Its record for stability is among the worst in the developed world, and it has done little to fix the problems it was invented to address. Moreover, the Federal Reserve is far from the only way to assure stability in banking. As George Selgin of the Cato Institute and Norbert Michel of the Heritage Foundation persuasive argue on the Bill Walton Show, it may not even be the best way. More provocative views on the Fed from George and Norbert: How the Fed contributed to, then botched its response to, the 2008 recession. Forget the idea that it was only about “greedy bankers.” If you want to learn what really happened, their explanation is lucid. Why an “independent” Fed has never been a reality and probably should not be the goal. We need our money to be politically accountable, but how to do this is a thorny issue. If America could print all the money we needed, we would never have financial problems, right? That’s Modern Economic Theory in a nutshell, and George and Norbert explain why this very seductive idea is such a dangerous one. George and Nobert explain “quantitative easing” to me and how it’s painted the Fed into a corner. I sort of get it. See what you think, here on the Bill Walton Show.


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episode 56 transcript

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