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News Link • Economy - Economics USA

Blind Men's Bluff: FED-Defending, Gold-Hating Economists

• North

Higher education in the United States was transformed by Rockefeller money, beginning in 1902: the General Education Board. The GEB made grants to colleges only if they hired Ph.D-holding graduates of a handful of universities, which alone granted the Ph.D. This way, the universities could indirectly take over the rest of the colleges, which were mostly church-related. The strategy worked.

Rockefeller's academic empire included the University of Chicago, which he founded. From the turn of the 20th century, the University of Chicago's department of economics repudiated the use of gold in monetary affairs.

Milton Friedman earned his Nobel Prize for a book researched mainly by his co-author, Anna J. Schwartz: A Monetary History of the United States (1963). Born in 1915, she still works full time. In the Wikipedia entry for her, we read:

Anna Jacobson Schwartz (born November 11, 1915) is an economist at the National Bureau of Economic Research in New York City, and according to Paul Krugman "one of the world's greatest monetary scholars". She is best known for her collaboration with Milton Friedman on A Monetary History of the United States, 1867 – 1960 which laid a large portion of the blame for the Great Depression at the door of the Federal Reserve. She is a past president of the Western Economic Association (1988).

The book is known in academic circles and policy-making circles only for its thesis regarding the Federal Reserve System, 1930-33. It says that the FED had not inflated enough, 1930-33. The book is never quoted by the media on any other topic, although it is a fat book. That is the only academic thing that Friedman ever wrote that was adopted by his Keynesian peers. Why? Because he came out on their side.

The academic economics profession is united on only one topic: the superiority of central banking to the gold standard.

There has never been a college textbook in economics that called the FED a government-created cartel that exists for the sake of the largest banks. This outlook shapes the thinking of the students who get certified to teach. They are literally unable intellectually to apply the economic theory in the chapter on cartels to the Federal Reserve System, despite the fact that the theory in the cartel chapter fits seamlessly onto the facts of the FED. Support of central banking is basic to the entire curriculum in modern economics.

So, the graduates have a blind spot: central banking. This means they have another blind spot: a gold coin standard. It means that they have literally never examined the theory of a monetary standard that is based solely on the enforcement of voluntary exchange, including contracts. They are literally incapable of imagining a free market for money. The methodological tools which they apply with mathematical precision – a fake precision – to every other area of life, including marriage, they are intellectually incapable of applying to money.


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