As a finance major one of my classes this semester is in banking. One my required books to buy is "IN FED WE TRUST: BEN BERNANKE’S WAR ON THE GREAT PANIC
I just love college. Hopefully we will discuss the book in class and with the help of those of you who are better versed in AE than me I may be able to pick it apart.
Just a word of advice. Don’t go into any book with the assumption that everything in it is clearly wrong. Otherwise, it will be difficult for you to learn anything from it you don’t already know to be “true”.
This should be especially the case if you don’t consider yourself well versed in AE. How can you already conclude that all counterarguments to AE are false if you are still learning the basic concepts?
When I was still an undergrad I had to read a lot of things I didn’t agree with at first. But I tried to remind myself that 1) very few questions about the world around us have been conclusively answered (this probably especially true for much of economics) and 2) if I already knew everything, I would be teaching classes instead of taking them.
If there is one thing everyone should learn in college, its that true scholarship requires great humility (well..maybe that isn’t the only thing you should learn…but it should high on your list).
Good luck with you studies.
Wow.
Further proof college is mostly a waste of time.
Why not recommend you read all the classics in 2 semesters of macroeconomics… GT, Human Action, WON, Leisure Class, etc. No, lets recommend COMMENTARY on the powers that be.
Now I’m just p*ssed off.
Very simple: consider it as an exercise to understand the enemy’s mentality and modus operandi.
Failing that read it for laughter.
I assure you that money and banking is a very complicated topic, and nobody can easily say, “This is obviously right and that is obviously wrong” on any matter.
Playing the Devil’s Advocate here, free banking systems in Canada and Australia have resulted in two well known panics in both of them, and advocates of free banking have this much to answer for to others. Some Austrian School economists claim that free banking should simply not be allowed at all, since lending on demand deposits is an outright crime against property and a dangerous thing. Yet, there are other free banking advocates who explain that there was no real non-intervention in banking, and government protections made otherwise successful Canadian and Australian banks reckless.
On the other hand, at least the Bank of Canada and the Bank of New South Wales have at least curbed those situations, which perhaps makes a case for modern regulated banking. They may have replaced it with a new set of problems, but they might be minor compared to the other offside. Those who advocate not lending from demand deposits (such as many Austrian School people) might solve problems of both free banking and modern banking, but they have never implemented their solution, and we can at least somewhat appreciate the modern system on its own merits.
Read the book, and accept it as another perspective.
What a waste of time.
I suggest you quit school.
What exactly are you referring too? So the government let the markets coin money? The governments did not insure deposits? If not, then it was not a free banking system.
I’ve heard an academic libertarian (who is critical of the Fed) speak well of that book; I can’t remember who it was, though–maybe Robert Barro?
Read it, then tear it apart in discussion.
I would agree if it was economics class. It is finance. They teach some propaganda in that. But you don’t need to take it seriously in your job.
Funny. I can’t think of any worse waste of knowing everything.
Remember, it’s not a “panic” if people have good reason for panicking. It is more of a giant “pump and dump” scam. It happened with the internet bubble of the 1990’s, just like with the housing bubble that burst in 2008. Thanks to the Fed, recessions, as well as the current depression, are now scientifically created instead of having to wait around for anomalies in the market. And since our money is based entirely on debt, those who control the debt (central banks) control all of the money, whether they have any actual wealth or not.
Ben Bernanke, or any Keynesian for that matter, has never been right about anything. I cannot stress this enough. He is completely wrong about both the theory and practice of economics. A good analogy would be a medieval doctor taking the last pint of blood from his patient, and reporting that there is nothing more medical science can do. Of course, economically speaking, Ben just blames the patient’s death on his lack of faith in the treatment.