The View From 1776

All of the vaunted green-energy capacity in the nation, after years of huge subsidies and tax manipulation, overall amounts to little more than 2% of the nation’s power needs. 

See Texas Wind Energy Fails, Again

Liberal-progressives, enraptured by the pagan environmental gospel of Al Gore, have campaigned to put petroleum producers and coal miners out of business To do so requires killing the free market, in which consumers have overwhelmingly demonstrated their preference for the opposite.

Green energy is a form of production controls, price control (raising taxes on petroleum and coal producers) and federal and state subsidies in a vain attempt to make green energy competitive by raising the price of traditional fuels.

One rationalization for federally-mandated green energy is the need to reduce reliance upon foreign sources of petroleum.  This is arrant nonsense.  Recent shale gas discoveries, as well as continuing discoveries of huge of oil deposits such as Exxon-Mobil’s recent one in the Gulf of Mexico, demonstrate that we already have more than a century’s supply of oil and natural gas, if the government will allow production to proceed.

If green energy policy is forced down our throats, as Democrat/Socialist Party leaders in Washington and states like California demand, there is real danger that we will freeze in the winter, broil in the summer, and go hungry as crops fail for lack of water, enough farm land, and diminished cultivation.  People in the upper-income brackets may be able to afford battery-powered automobiles (made possible only by federal mandates and subsidies to auto makers), but the average citizen will be much less mobile than today. 

To have sufficient, reliable green energy capacity, we would have to cut down almost every tree in the nation to cover the landscape with wind turbines and cover the deserts with solar panels.  Hydro-electric power is out, because dams interfere with snail darters and salmon migration.  Even solar panels are mightily resisted, because they interfere with the habitat of variety of desert rat.  And to grow enough corn for ethanol, there will be little arable land left for food production, turning the nation into a net importer of food crops.

The ultimate irony is that many green energy projects consume more energy than they produce, and all of them reduce consumers’ standard of living.

There is a precedent for such willful destruction, imposed on the general public by intellectual planners.  Russia, before 1917, was one of the world’s largest exporters of grain.  Under Soviet control, the nation no longer grew enough to feed its own citizens.

As I have written several times since July, the only real beneficiaries of massive intervention by Obama and the Fed are Wall Street stock brokers and the giant banks.  A column in the August 27, 2011, New York Times by Gretchen Morgenson (one of the few Times reporters who has any understanding of financial markets and business) seconds that position.

Read The Rescue That Missed Main Street.

Quote:

Walker F. Todd, a research fellow at the American Institute for Economic Research and a former assistant general counsel and research officer at the Federal Reserve Bank of Cleveland [as well as a long time board member of the Committee for Monetary Reform and Education], said these details from 2008 confirm that institutions, not citizens, were aided most by the bailouts.

“What is the benefit to the American taxpayer of propping up a Belgian bank with a single New York banking office to the tune of tens of billions of dollars?” he asked. “It seems inconsistent ultimately to have provided this much assistance to the biggest institutions for so long, and then to have done in effect nothing for the homeowner, nothing for credit card relief.”

Mr. Todd also questioned the Fed’s decision to accept stock as collateral backing a loan to a bank. “If you make a loan in an emergency secured by equities, how is that different in substance from the Fed walking into the New York Stock Exchange and buying across the board tomorrow?” he asked. “And yet this, the Fed has steadfastly denied ever doing.”

Anyone interested in attending the October meeting of the Committee for Monetary Reform and Education (take a look at the program listing on the website link above) should telephone CMRE president Elizabeth Currier at 704-598-3717.

Did Hedge Funds Throw the 2008 Election?
By Jeff Lukens

Hedge fund traders had a great year in 2008. That year, hedge fund short sellers were instrumental in the spike in fuel prices, the bankruptcy of Lehman Brothers, the banking crisis, and the stock market collapse. While extremely wealthy hedge fund traders engineered each of these calamities, and made billions of more dollars short selling each one, the American people collectively lost trillions of dollars in the value of their homes and savings.

And, as amazing as it is, no one went to jail. Why? Well, perhaps it is because in 2007 the perpetrators had some laws changed to their liking. And perhaps it is because these people are politically connected to the Obama Administration and Congressional liberals. Our government is protecting them, and there needs to be a public investigation into this matter.

The hedge fund short sellers who were at the root of the mayhem are found primarily at the Managed Funds Association (MFA), the so-called “voice of global alternative investment community.” MFA members include George Soros, John Paulson, Jim Chanos, James Harris Simons, and others.

When Democrats took control of Congress in January 2007, MFA lobbyists soon began pressuring Securities and Exchange Commission Chairman Christopher Cox to remove safeguard regulations that provided the conditions for stable markets. Such regulations had been in place since 1938. Cox eventually yielded to their requests to repeal the uptick rule, circuit breakers, and trading curbs. The Federal Accounting Standards Board also instituted mark-to-market accounting. Short ETFs (Exchange Traded Funds) were introduced that year as well. Collectively, these changes fomented the resulting financial disaster.

The next year was a tumultuous one for investors. Early in 2008, the stock market was trending lower as news of the subprime mortgage crisis began to unfold. In July, oil prices spiked to $147 per barrel sending ripples through the economy. One of those ripples was to hit Lehman Brothers. The double whammy of subprime mortgages and soaring oil prices put them under.

On Monday, Sept 15, Lehman filed for Chapter 11 bankruptcy while other lending institutions lined up like dominoes teetering on the edge of bankruptcy. On Thursday of that week, a $550 billion electronic run on banks occurred within an hour or two, going mostly to offshore accounts. Instantly, there became a liquidity crisis within the banking industry. In an unprecedented move, the Treasury and the Federal Reserve had to act together to stop what had become a full-fledged panic. No one has ever investigated who withdrew the money or to where it went.

Up to that week, John McCain was ahead of Barack Obama in some polls by about 3 percent. By Oct. 10, the S&P 500 Index had lost 25 percent of its value from what it had been a month before and the McCain campaign was doomed. Hedge fund short sellers effectively handed the election to Barack Obama.

Declining markets occur all the time. Hypothetically speaking, it would be an outrage to the American people if someone were to induce a market panic in the midst of a presidential campaign. Could this be what happened in 2008? We may never know. The evidence is admittedly lacking, and is at best circumstantial. This could possibly be the perfect crime of all time. The question we need to ask ourselves now is whether we are exposed for this to happen in 2012?

Among MFA members, George Soros is the most well known. He has made his fortune by short selling and then pouring his private wealth into shadow organizations to subvert various nations. Hastening a market meltdown to give the election to Barack Obama would fit with his pattern of profiting while destroying the social order of his target country. His financing of the Democrat Party and hundreds of 527 organizations collectively has become a “Shadow Party” unto themselves. While profit and control motivate most hedge fund executives, Soros also has an ulterior motive to hasten a New World Order.

Another Soros associate is John Paulson. Paulson has contributed financially to both major political parties. He too has made billions by shorting collateralized mortgage debt securities, and then waiting for the financial institutions to collapse a few months later.

In his book, Wizards of Wall Street, Jubi Diamond detailed how the hedge fund short sellers operate in private. According to Diamond, the hedge fund short sellers are predators who feast on companies and economic sectors that can be pummeled “by market manipulations through collusion and unrestricted short selling.” Hedge fund traders, Diamond notes, can drive prices down and then drive them back up, all within a 15-minute period. Unlike mutual funds, this is an unregulated industry with many traders located offshore, outside the jurisdiction of the United States.

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, which did little about regulating the hedge fund short sellers.

Diamond explains:

The only financial reform needed today is to regulate and monitor the hedge funds and the hedge fund short sellers, some of which are registered off-shore to avoid scrutiny. These global operators, with investors who remain mostly anonymous, must be compelled to register with the Securities and Exchange Commission (SEC), publicly disclose their positions in the markets, and maintain accounting and trading records for a period of 10 years so their activities can be monitored and scrutinized. Just like mutual funds, they must be prohibited from engaging in day trading activities.

Much of the financial damage happened because of the mark-to-market rule, and because there was no uptick rule, no circuit breakers, and no trading curbs. They changed these regulations in 2007, meaning that the risk of investing has been borne by common investors “as the hedge fund short sellers operate with impunity looting the invested capital of American families.”

On March 9, 2009, the mark-to-market accounting rule was reversed, and (perhaps not so coincidentally) the S&P 500 Index happened to hit a low that same day, and more than doubled over the next two years. 

The MFA’s short selling in 2008 was mostly legal because few laws were in place to stop them. And in the high-speed world of electronic trading, little evidence exists to convict them. The ways of hedge fund traders will not change until there is a public investigation, and we return regulations at least to what they were in 2006.

Perhaps we should consider the recent market volatility as the start of the 2012 campaign. Expect a wild ride as we count down to the election.

The Scottish Enlightenment and America’s Founding
In 1776
By Robert Curry

In 1776, [Adam] Smith could only theorize from scattered historical precedents as to how a projective free enterprise system might work, because nowhere in his mercantilist world was a free enterprise system of the sort he described on paper actually operating.

The American states of 1776 in gambling on democratic republics stood alone in the political world.  Nowhere in contemporary Europe or Asia could Americans turn for reassuring precedents showing functioning republican government.

Douglass Adair

Though they were boldly proposing to take mankind where it had never gone before, neither Smith nor the Founders were utopian dreamers.  We now know that their thinking was quite sound.  Free markets work, and today even tyrants accept the need to stage elections and plebiscites to give their regimes at least the appearance of legitimacy.  The systems of Smith and the Founders showered the world with undreamed of prosperity and liberty, at least for those of us fortunate enough to live where their ideas were applied.

Smith and the Founders believed they had arrived at an understanding of human action much as Newton had explained celestial motion.  Washington said it best.  The Founding, he wrote in 1783, had occurred at a time “when the rights of mankind were better understood and more clearly defined, than at any former period; the researches of the human mind after social happiness, have been carried to a great extent, …[and] are laid open for our use.”

Just as Newton had explained celestial mechanics by means of the unifying principle of gravity, the thinkers of the Scottish Enlightenment had based their thinking on a single unifying principle.  The Americans of the Enlightenment era had embraced that same principle and set out to apply it carefully in their design of the American Republic.  Douglass Adair, perhaps the greatest 20th century student of the Founders, identified their unifying principle this way: 

The Scottish system, as it had been gradually elaborated in the works of a whole generation of researchers, rested on one basic assumption…The assumption was “that…in all nations and ages…human nature remains still the same, in its principles and operations.

Adair quotes Hume here and means for us to understand that with these words Hume could be acting as the spokesperson for the Scots of the Enlightenment era, as well as for the Founders. 

Within just a few years of 1776, the Founders were to make the next great application of what they had learned.  They made use of those researches to create two of the greatest breakthroughs of the Enlightenment-- first the Constitution and then the Federalist Papers.

Since their time, history has been marked by a succession of assaults on these researches by wave after wave of theoreticians, sometimes backed by political movements, sometimes backed by marching armies.  Those theoretical assaults have taken a toll on the luster of the systems of 1776.  Yet fettered as it is, the free market continues to prove itself, and the democratic republic of the Founders still endures.

The Founders believed that they were building on a solid foundation of real understanding.  What if they were correct in their assessment of what they had done?  Then perhaps that is why what they made has endured.  That would suggest that those who attack their work are simply recoiling from what actually works and how things actually are.  If so, perhaps President Coolidge said it best:

If all men are created equal, that is final.  If they are endowed with inalienable rights, that is final.  If governments derive their just powers from the consent of the governed, that is final.  No advance, no progress can be made beyond these propositions. 

If anyone wishes to deny their truth or their soundness, the only direction in which he can proceed historically is not forward, but backward toward the time when there was no equality, no rights of the individual, no rule of the people.  Those who wish to proceed in that direction cannot lay claim to progress.  They are reactionary.  Their ideas are not more modern, but more ancient, than those of the Revolutionary fathers.

The following analysis appears on the Commentary website:

Did Obama Make It Worse?
James Pethokoukis

Commentary — August 2011



What if the president of the United States hadn’t proposed an $800 billion stimulus plan back in 2009—but one twice as large? That is the question haunting the intellectual left, led by the economist and columnist Paul Krugman, especially since the economy is mired in what might charitably be considered the doldrums. It slowed to a near-total halt in the first quarter of 2011 with a growth rate of 0.4 percent before climbing to a comatose 1.3 percent rate in the second.

For Krugman’s opposite numbers, the question is the reverse: Might the U.S. economy actually be stronger today if Uncle Sam had done nothing and just let the business cycle play out? And what might have been different had John McCain been elected the 44th president instead of Barack Obama? Would he have acted differently? Would the result have been different?

The what-if debate is not merely an intellectual exercise. It will have some effect on American policy going forward. The American Recovery and Reinvestment Act was Barack Obama’s signature achievement in dealing with the most worrisome set of economic conditions since the Great Depression. It was how Obama, to use a pair of his now seemingly abandoned metaphors, sought to drag the economy out of the ditch while the Republicans were standing around sipping Slurpees.

As Obama said on the first anniversary of signing the bill, “It is largely thanks to the Recovery Act that a second Depression is no longer a possibility.” Economic analysis from the White House credits the Recovery Act with having saved or created between 2.4 million and 3.6 million jobs by the end of March, 2011.

In short: without Obamanomics, it would have been worse. Much worse. You’re welcome, America. Four more years, please.

But Republicans have a competing argument. Instead of saving us from a Greater Depression, the Obama stimulus (together with his health-care plan and financial reforms) was a two-year waste of precious time and money that may actually have impeded economic growth. The evidence for their proposition comes in part from the White House itself; its own economists predicted the stimulus would prevent the unemployment rate from hitting 8 percent. But the rate actually rose as high as 10.1 percent, has settled in above 9 percent now, and even Obama’s own team currently hopes for a rate of, at best, 8.25 percent by the end of 2012—if nothing else goes wrong.

To be sure, the economic disaster that led to the longest recession the United States has ever suffered was something Obama inherited, but there is no question everyone (on all sides of the aisle) believed that natural cyclical forces would have led to recovery long before now. Natural cyclical forces were not given a chance to work themselves out. Far from it. In addition, Republicans can argue that regulatory uncertainty and fear over the rising national debt—debt that Obama’s Recovery Act helped intensify—have chilled American business.

In short: Obama blew it. That accounts for the slogan Wall Street Journal columnist Peggy Noonan proposed for the GOP going into 2012: “He made it worse.”

Did he? Who’s right? Let us examine several potential policy paths not traveled and speculate how the economy might look different if they had been.

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What if the stimulus had been larger?

More Americans think the stimulus hurt the economy than helped, just as they think—in percentages that look increasingly like an oncologist’s fatal diagnosis—the economy is on the wrong track. So it should come as no surprise that Obama would rather talk about “winning the future” than make reference to a nearly trillion-dollar plan the public seems to think lost the present. In his State of the Union address earlier this year, Obama obliquely referred to “steps we’ve taken over the last two years [that have] broken the back of this recession,” before immediately pivoting to Sputnik and bullet trains. The president even recently joked at a meeting of his jobs council that “shovel-ready was not as shovel-ready as we expected.”

You will not find any White House policymaker, either current or former, who thinks the stimulus was fundamentally flawed. The only error Obama economists such as Larry Summers or Christina Romer—or Obama himself—will concede is that the stimulus should have been bigger than the dollar figure ($860 billion) that the political reality of 2009 would allow. But would more spending and larger temporary tax cuts have produced a significantly different result?

Before trying to figure that out, we must understand the actual impact of the Recovery Act. We cannot determine that through the White House’s models, which presume that a dollar of government spending produces more than a dollar of economic output—a presumption that is highly controversial, to say the least. But it’s useful for the White House, because even if the economy had completely collapsed after the stimulus kicked in, the White House could still have released report after report showing that GDP and job growth would have been even worse without the Recovery Act.

Better to see what actually happened as gleaned from government statistics. In a recent paper, the Stanford University economist John B. Taylor simply looked at whether, as a result of the stimulus, consumers actually consumed and whether government actually spent in a way that produced real growth and jobs.1 Turns out, they didn’t:

Individuals and families largely saved the transfers and tax rebates. The federal government increased purchases, but by only an immaterial amount. State and local governments used the stimulus grants to reduce their net borrowing (largely by acquiring more financial assets) rather than to increase expenditures, and they shifted expenditures away from purchases toward transfers. Some argue that the economy would have been worse off without these stimulus packages, but the results do not support that view.

Some economists on the left acknowledge the truth of Taylor’s analysis. “Taylor actually has a pretty good point: It’s far from clear that the ARRA actually led to much of a rise in government spending, while the tax cuts that made up much of the stimulus were probably largely saved,” Paul Krugman has written. But Krugman and others of his ilk then use Taylor’s analysis to argue that this proves the stimulus should have been larger, with far more of the money spent on government purchases and infrastructure and far less on temporary tax cuts.

Taylor is skeptical of such reasoning. He questions whether such massive spending could happen quickly or efficiently. Summers, who ran Obama’s National Economic Council, harbors such doubts, too. As he told the Washington Post: “So-called shovel-ready projects often were not in fact ready to go. Almost everyone close to the process feels that Joe Biden and his team did a very good job of moving the stimulus money through the system, and as a consequence, money moved more or less on the schedule we projected in 2009. They would be the first to say that it would not have been possible to move vastly more money into quick trigger infrastructure projects.”

So cranking up the stimulus machine to 11 would have been difficult, if not impossible. But that is not the only argument to be made against the effectiveness of the stimulus. We also know that high levels of government spending crowd out private consumption. And as we learned from the permanent-income hypothesis that won Milton Friedman his Nobel Prize, some Americans realize all the massive deficit-financed spending of today will ultimately require raising their taxes tomorrow. So short-term changes in income tend to have little impact on how people spend. “New Keynesian” models, like one used by the European Central Bank, sought to incorporate such factors and predicted that the Obama stimulus would have just a fraction of the impact estimated by Romer and other White House economists. Instead of creating 3 million jobs, perhaps the actual total was 600,000, or about $1 million a job (assuming approximately 80 percent of the stimulus has been distributed.) That would mean the job growth that has occurred has been mostly a result of the natural recovery of the economy.

Such estimates sure seem to better reflect the miserable reality of the past two and a half years than what the White House is selling. The anti-stimulus models also imply that for the Recovery Act to have had the impact Obama sought, it would have needed to be six times larger, or roughly $5 trillion in borrowed money.

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What if the economy had been left alone?

The 2009 Obama stimulus wasn’t the only effort to juice the economy. There was Cash for Clunkers in the summer of that year, offering a one-time subsidy for turning in an old car and buying a new one. Democrats and Republicans agreed on a round of temporary tax cuts and extended jobless benefits in December 2010. And don’t forget, President George W. Bush got his own mini-stimulus passed back in 2008. All that stimuli, not counting interest expense on the borrowed money, amounted to well over $1 trillion (some say as high as $2 trillion) in economic steroid injections.

Of course, it would have been politically difficult for Obama and Bush to sit on their hands, even though the data certainly suggests the economy might be not a whit worse off if they had. But what if a libertarian politician like Ron Paul had been sworn in as 44th president? Imagine his first State of the Union address, the one in which he tells the American public that Washington won’t be coming to their rescue and that the moribund economy will, in time, bloom again and grow strong all on its own:

My fellow Americans, I know times are tough and almost certainly about to get tougher. Yet isn’t it odd how we all welcome the inevitable changing seasons of nature, but we’re upset by the seasons of our economy? You see, in the garden of our economy, growth has its seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again. As long as the roots are not severed, all is well. And all will be well in the garden. So be patient. God bless America.

Those were the words, more or less, of Chance, the simpleton gardener who becomes a presidential adviser in the 1979 political satire, Being There. But in fact, President Warren Harding pretty much adopted that organic approach during the mini-depression of 1920–21. That nasty little downturn has been blamed on a variety of culprits, including rapid demobilization after World War I and overly tight monetary policy by the nascent Federal Reserve. Unemployment surged to nearly 12 percent as the economy shrank by about 3 percent.

Rather than enact a major spending program, Harding responded by slashing government outlays by a fifth during 1921 and 1922, which is just what he had told voters he would do during the 1920 campaign. At the Republican convention that year, he promised to “strike at government borrowing…[and] attack the high cost of government with every energy and facility which attend Republican capacity.”

Mission accomplished. About that period, economist Benjamin Anderson wrote, “We took our losses, we readjusted our financial structure, we endured our depression, and in August 1921, we started up again.” And then we raced right into the Roaring Twenties.

But how would such an approach have worked the past few years? Economist Brian Wesbury of First Trust Portfolios thinks the huge increase in government spending under the Obama and Bush administrations has hurt the economy. Cutting it back would boost growth. His economic model suggests that without the large increase in government spending that occurred in recent years, “real GDP would be 3.2 percent larger today than it is, the unemployment rate would be 7.6 percent, the U.S. would have 2.5 million more jobs, and the stock market would be 24 percent higher.”

The big difference between the White House model and the Wesbury model is that the latter incorporates academic research suggesting long-term increases in government spending hinder growth. If Wesbury and these studies are correct, not only would the economy be on a stronger growth track, it wouldn’t be pulling extra trillions of debt behind it.

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What if it had all been tax cuts?

Ron Paul could never have become president. John McCain could have. And while McCain has a reputation as a debt hawk, there’s little doubt he would have taken an active approach to rescuing the sinking economy, even it if would have greatly increased the deficit. He almost certainly would have implemented some sort of stimulus.

The conservative economist Martin Feldstein, for instance, suggested his own version of the Obama spending plan. Instead of trying to prop up spendthrift state governments and boosting “clean energy” investment, Feldstein would have directed dollars at restocking depleted U.S. military hardware after five years of fighting in Iraq and Afghanistan. And whereas shovel-ready infrastructure projects turned out to be more White House spin than substance, “the military can increase its level of procurement very rapidly,” Feldstein said back in 2009.

But that sort of suggestion was the exception rather than the rule on the right. Mostly there were calls for tax cuts, such as reducing the levy on corporations or capital gains. Perhaps the most popular idea was a massive payroll tax cut, reducing the burden on workers of their Social Security and Medicare premium payments. As it so happens, the cost of Obama’s stimulus plan almost exactly matched all the revenue the government takes in each year from payroll taxes. So perhaps McCain would have suggested a one-year payroll tax holiday, reducing both the cost of labor (good for hiring) and giving employees a $1,500 check (good for consumer spending or repairing personal balance sheets).

But tax cuts work best when they are put in place as long-term measures, not temporary fixes of the sort Obama preferred. So for maximum impact back in 2009, any payroll tax cuts would have needed to be permanent. And replacement revenue sources to fund Social Security and Medicare would have been necessary pretty quickly. And so we would have found ourselves in exactly the same kind of debt crisis that consumed Washington throughout the past summer.

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These what-ifs suggest a few things. First, that the Obama stimulus does not deserve credit for what little economic growth we’ve seen. Second, that while a more libertarian approach to the crisis might have had a better result, there was no way such an approach would or could have be enacted. Finally, the preferred Republican solution—a temporary payroll tax cut—might have been beneficial in the short term and wildly problematic in the long term.

Did Obama make it worse? It is certainly the case that he only deepened a long-term trend that threatens American prosperity more than any other. The events of 2008–2009 exposed a truth about the U.S. economy from which we had shielded ourselves: economic growth has been slowing in a worrisome way throughout the decade. The nation’s GDP has averaged 3.3 percent annual growth for the past half century. But from 2001 to 2007—before the recession hit—it averaged only 2.6 percent. Going forward, growth might be even slower due to the aftermath of the financial crisis and the aging of the population. The Congressional Budget Office, for instance, pegs long-term growth at just 2 percent or so.

But that downshift isn’t fated. The McKinsey Global Institute thinks a higher retirement age and smarter immigration policy could make the labor force grow more quickly, while smarter tax and regulatory policy could boost worker productivity. Replacing the income tax with a consumption tax, for instance, would likely make the economy grow faster over the long run by increasing investment.

These are the sorts of ideas that are likely to be a central part of the political discussion going forward in a way they never have been. The two-party debacle that was the debt-ceiling debate and the disgusted national reaction to it suggest that the American public is likely to be more open to new remedies for the nation’s ills—remedies that have not been stained by their association with the failed policies of the past four years.

We’re stuck for now with an anemic and debt-laden economy that may muddle along for years. But it didn’t have to be this way. The one thing we can all say for certain is that we could have made it better.

Footnotes

1 Jim Lehrer, Tension City: Inside the Presidential Debates, from Kennedy-Nixon to Obama-McCain (Random House, 2011)

About the Author
James Pethokoukis is an economics columnist for Reuters. He last wrote “The Problem with Printing Money” for our January 2011 issue.

As I wrote in July:

Note that it’s the securities brokerage community who now applaud the Fed’s QE2 program to raise the rate of inflation (i.e., devalue the dollar). 

...The stock market rise is essentially floating on a rising tide of the Fed’s fiat money.

...the Fed, by pumping up the stock market, is well along the path to creating the next speculative boom and recession.

The stock market is doing well, but where are the millions of jobs that were supposed to have been created by the Fed’s Keynesian monetary policies?

To understand the destructive impact of the Fed’s easy money, low interest rate monetary policy on community banks and small businesses, read Fed’s rate policy leaves no relief for Main Street banks, an op-ed piece from today’s The Washington Post.