Who Needs the Fed?. John Tamny

I also thank my longtime H. C. Wainwright colleague David Ranson for initially explaining to me the flawed mysticism that defines the theorizing about so-called money supply. David reached these conclusions back in the 1970s with Marc Miles and Arthur Laffer. It’s worth stressing that Laffer’s insights about monetary policy have influenced me more than his certain genius in the area of taxation.

      My good friends Chuck Smithers and Steve Shipman have for years informed and expanded my thinking on monetary policy, all the while applying the ideas of sound money to capital allocation. Nathan Lewis and Richard Salsman know monetary policy arguably better than anyone in the field today. Hopefully both will see their insights scattered throughout. The great historian Steven Hayward always rates mention in any book by me, mainly because most aspects of this book that presume to entertain draw on research he conducted.

      Windsor Mann is easily one of my favorite commentators. His energetically funny columns on the wasteful folly that is government ably informed my attempts to reveal government as the credit destroyer that it is. Tim Reuter was an essential sounding board throughout and a great early editor of what became Who Needs the Fed? I can’t wait to read the many books and columns that both Mann and Reuter have in their futures.

      Rob Arnott didn’t just write the foreword for Who Needs the Fed? He’s also been a great friend for many years, always willing to take a meeting with me despite creating and running one of the most prominent money management firms in the world. He’s taught me enormous amounts about economics and monetary policy since we first met back in 2005, but Rob doesn’t just teach. He’s an avid listener, and his interest in my ideas has long been a source of confidence.

      And then there are the grand economic thinkers who long ago left us. Henry Hazlitt’s Economics in One Lesson continues to influence my thinking and style in profound ways. So do the masterworks of John Stuart Mill and Adam Smith. The great Robert Bartley revived the truth that money is only good if it’s a stable measure, and his The Seven Fat Years rarely leaves my side. But the biggest influence on Who Needs the Fed? surprised me. Though I first read and enjoyed Ludwig von Mises’s The Theory of Money and Credit years ago, it was re-reading it ahead of writing this book that truly opened my eyes to its unrelenting brilliance.

      Reverential thanks go to the irreplaceable George Will. He could so easily be distant and unreachable to someone like me, but he’s instead made himself available, encouraged me, and thankfully reminded me of what a privilege it is to write for the public. Will told me the latter during a particularly difficult time amid the writing of Who Needs the Fed?, and it was a major inspiration. That he’s also gone out of his way to promote my thinking in columns cannot be minimized for its impact on my career. I’m forever grateful to this giant of opinion not only for liking my work but also for generously telling his readers about it.

      That I have an audience in the first place is thanks to John McIntyre and Tom Bevan at RealClearPolitics. Their entrepreneurial nature made possible RealClearMarkets, which has since become a top locale for quality economic and market commentary. Lewis D’Vorkin at Forbes has loomed large here, too, for making Opinions a home for highly insightful economic commentary.

      Kim Dennis of the Searle Foundation, always optimistic, has made possible the distribution of my books to a much wider audience. Whatever accomplishments I’ve enjoyed are in large part thanks to her.

      Juleanna Glover has been an energetic supporter of my work, as well as an essential source of ideas that have expanded my writing horizons. Her encouragement has been a very important driver of my confidence.

      David and Karen Parker went to great lengths distributing my first book, Popular Economics. Their willingness to alert major organizations, friends, and ideological opposites to my way of thinking has meant a great deal.

      Ruth Westphal has been enormously energetic about spreading my articles and books to a rapidly expanding group of people. She has also helped me secure all manner of speeches through which to promote my work. I’m beyond grateful for all that she, an excellent entrepreneur herself, has done for me, along with the freedom movement itself.

      Bob and Ruth Reingold continue to support me in amazing fashion. Bob saw years ago what I like to think he thought of as talent and has been unstinting in his support ever since. I’m so lucky to know them both, and to count them as great friends.

      Many of the people mentioned here I know thanks to Ed Crane. Ed made libertarianism cool, and his thinking very much informs my own. Ed has been consistent in his contention that government spending itself is the true economic burden. Who Needs the Fed? works off of Ed’s thinking, which reveals government spending as the wrongly ignored source of credit destruction.

      Big thanks go to David Nott, president of Reason Foundation. I’m proud to call Reason home, and I’m there thanks to David’s belief in me. Nick Gillespie, Julian Morris, and Melissa Mann have similarly been very welcoming to me, and I’m excited to accomplish great things with all of them.

      Roger Kimball of Encounter Books requires prominent mention for his early excitement about Who Needs the Fed? It’s been a thrill working with him, along with Katherine Wong and Sam Schneider. Their optimism has greatly enhanced mine.

      As for the great Steve Forbes, a day doesn’t go by in which I don’t think about how much he’s done for me both personally and professionally. I’ll surely fail in trying to repay all of his kindness to my wife and me, not to mention what he’s meant to me professionally. Steve has the ear of CEOs and world leaders, but he’s always made time for me and has always encouraged me. No words can adequately describe all that he’s done on my behalf and all that he’s taught me. A greater, kinder person would be hard to find, or fathom.

      And then there are the people to whom I dedicate this book, Peter and Nancy Tamny. I can’t believe how lucky I am that they’re my parents. Unrelenting in their belief in and support of me all of my years, they also passed on to me genetic skepticism about conventional thinking. I’m truly grateful that they’ve always been there for me, along with my sister, Kim. I don’t deserve a sister like her. Her enthusiasm about all that I do means more to me than she knows.

      Last, but certainly not least, there’s my wonderful wife, Kendall. All the books (one can hope!) are certainly for her. Kendall’s influence on me has been profound. Without her there are no books, and there’s not much happiness either. I hit the jackpot in convincing her to marry me, and time spent with her is a constant reminder of just how lucky I am.

       INTRODUCTION

      If we were to destroy every piece of paper currency in the world, and every bank account entry, we would not have destroyed one shred of real economic wealth.

      —Warren T. Brookes, The Economy In Mind, 81

      ON AUGUST 13, 2015, and in an op-ed for the Wall Street Journal, the economist Alan Blinder posed the following question: “Will the Fed raise interest rates?”¹ At first glance there is nothing abnormal about his query. A Google search of “Fed” combined with “Interest Rates” leads to 45 million results. Particularly within the economics profession, it’s broadly accepted that the Fed can—and should—actively seek to manipulate the cost of credit.

      But imagine if Blinder’s opinion piece had asked a slightly different question: “When will the Central U.S. Hamburger Authority raise the price of Big Macs and Whoppers?” The Journal’s editors would have been inundated with letters from incredulous readers protesting Blinder’s conceit, let alone that of the federal government. The prices of hamburger meat, buns, lettuce, tomatoes, and name offerings like the Big Mac and Whopper are set in local, domestic, and international markets. Reasonable readers would correctly point out that no central authority could ever successfully plan the price of these most American of food items.

      Worse, assuming a government decreed submarket price, it’s fair to say that the supply of Big Macs and Whoppers would quickly shrink on their way to disappearance. Rare is the business that can remain in operation