Since the job that was actually assigned to [the Fed] by Congressman Carter Glass back in 1913 is now vestigial and long gone, and the financial system has been flooded with massive liquidity for decades on end, it might well be time to declare victory and let the free market take care of jobs, growth, inflation and prosperity. ~ David Stockman
Blow it Outcher…
Let’s take a closer look at the job Congressman Carter Glass assigned to the government’s new central bank, the Federal Reserve System, created by the Federal Reserve Act of 1913.
The first thing to notice is it’s a creature of government, not the market, otherwise there would be no need to support the Fed with a legislative act, which gave it the status of a state-backed cartel.
It’s crucial to understand that the push for central banking was part of the Progressive Era feature of business partnering with government in its war against competition. Mergers on the free market had failed for various reasons, including internal conflicts among members, challenges from new entrants in the market, and new competing markets altogether, such as the new motor vehicle industry that emerged in 1893 and by 1895 saw “thirty American manufacturers producing 2,500 motor vehicles.” Continue reading →