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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Doug Noland
May 5, 2011
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We’re in need of some rules.  We need rules that would ensure that the Fed never again accommodates a doubling of mortgage Credit in about six years.  We need rules that ensure that the Fed is not complicit in double-digit-to-GDP federal deficits – and a doubling of federal debt in less than four years.  We need some rules that ensure that savers don’t receive a pittance on their savings while speculators enjoy a historic windfall. 

We need rules to ensure that the Fed judiciously monitors financial conditions from a broad perspective.  We need rules that would impose discipline when our economy runs persistently large Current Account and fiscal deficits.  We need rules to ensure that emergency monetary policy measures have defined durations – helping to limit the structural impact from artificially low interest rates.  We need to have rules to ensure that intervening in the marketplace is not commonplace.  We need rules to ensure that the Fed doesn’t use the manipulation of financial markets as a mechanism to bolster the economy.  We need rules to ensure a policy focus on underlying Credit conditions rather than asset prices.  We need rules to ensure monetary policy does not nurture speculative excess.  These rules would incentivize the speculators to bet on the system gravitating toward stability – as opposed to these days where the sophisticated speculating community wagers confidently that excess will beget only greater excess.

We need rules to ensure that Federal Reserve policymaking does not dictate the (re)distribution of wealth throughout our society.  We need rules that would ensure that the public and financial markets do not expect too much from monetary policy.  We need rules that would forbid the Fed from monetizing debt, ballooning its holdings, and massively inflating system liquidity – at its discretion.  Rules are needed to ensure that monetary policy doesn’t dictate decision-making throughout the entire economy. 

And we so need a framework of rules that would work toward ensuring that the stability of our monetary system is beyond repute – that society need not fear that policymakers will devalue their savings or jeopardize the Creditworthiness of our nation’s obligations and financial system.  And we need rules to ensure that the ideology of a single appointed central banker cannot have a profound impact on the nature of monetary policy, asset prices, debt structures, speculative dynamics, financial flows and resource allocation.  The risks of indiscretion are much too great, and Henry Simons was absolutely right.