On the occasion of Milton Friedman’s 90th birthday, then Fed. Governor Ben Bernanke acknowledged Friedman’s claim that the Fed’s misconduct was to blame for the Great Depression, saying “You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” Today, the true story of the part Chairman Bernanke’s Fed played in the Great Recession is only just starting to be told. It is a story of Fed policy blunders no less serious than the ones the Fed committed in the 1930s.
Yet the Fed remains as powerful as ever, and Bernanke, along with other apologists for discretionary central banking, never learned the main lesson Friedman drew: so long as the Fed enjoys unlimited discretionary powers, it is bound to misuse them, and to be a source of continuing booms and busts. George Selgin, senior fellow and director, Center for Monetary and Financial Alternatives, will join us to take your questions and discuss why only a monetary policy based on the rule of law can achieve lasting monetary and financial stability. George will argue that this means drastically limiting the Fed’s power to do harm by returning to a rule-based monetary policy and restoring market discipline to the monetary system.