RSS FeedSeveral policy mistakes were made during the 1930s that turned what could have been an ordinary recession into the Great Depression. Let's review just a few of them in the interest of not repeating them.
Archive for October, 2008
Comments (2)10 24th, 2008 5:03:34 PM
Double, double toil and trouble;
Fire burn, and caldron bubble.
Macbeth
I don't intend this to be a big opus on the Fed and bubbles. I simply want to add my two-cents worth to what I keep hearing and, more importantly, not hearing about it on financial TV and radio.
10 23rd, 2008 8:39:39 AM
One of the common fallacies in economics is the fallacy of composition. What's true for you and what's true for me may not be true for all of us together….
This is from my latest blog article in the New York Times. To see more visit here.
10 20th, 2008 3:16:16 PM
I wish I knew.
When the bottled-water craze began, I remember thinking my Dad wouldn't believe that people would pay $2 a bottle for what's essentially free out of the tap. It's even worse in hotel rooms. I think my hotel-room record is now $7.95; it may have been $8.95. Either way, I wouldn't touch it. I might break it. I vaguely recall something in an economics class about "time and place utility," but that only takes me so far. I imagine a camera hidden in the room and appearing on Candid Camera if I give in.
10 16th, 2008 11:12:08 AM
My October 15 New York Times blog posting reviews the classic broken window fallacy-the seen versus the unseen-in the context of two issues of contemporary monetary policy. You may read it here.
The Seen and the Unseen - and Fed Policy
By Bob McTeer
Have you heard the one about the young hoodlum who threw a brick through a bakery's plate glass window? A crowd gathered on the sidewalk, shook their heads, and sympathized. It would probably cost the baker at least $1,000 to replace the window. What a shame!
10 15th, 2008 10:55:53 AM
I have a new commentary that has been published in the Washington Times. To view the article, click here.
Option for the Fed
Bob McTeer
COMMENTARY:
Among the actions the Federal Reserve is expected to announce imminently, it should include an immediate, but temporary, reduction in margin requirements for stock purchases.
10 13th, 2008 1:11:54 PM
I've written another commentary for Forbes.com. To access it online go here.
My Own Crisis Of Confidence
Bob McTeer 10-10-08
One of the victims of the prolonged financial crisis has been my comfort with my belief system. I grew up reading Milton Friedman and taking classes from like-minded professors. When an unfamiliar issue came along, I was quick to ask myself, "What would Friedman think about this?" The answer was usually self-evident, seemed correct to me and fit nicely with my answers to other questions. I came to regard my economic philosophy as "classical liberal" or "economic conservative" to friends who wouldn't be familiar with the first term.
10 9th, 2008 4:54:22 PM
My latest New York Times blog posting argues that the Fed's massive injections of liquidity over the past year have been largely offset by open market sales and are unlikely to cause an acceleration of inflation. You may find it here.
10 7th, 2008 9:04:46 AM
The Fed's target Fed funds rate reached 2 percent on April 30, which, given the higher inflation rate this year, is lower in real terms than the 1 percent target rate in 2003. The aggressive Fed easing of the Fed funds and discount rates no doubt helped, compared to not doing it, but it didn't help as much as expected. It's innovative use of special auction facilities seemed to be a better, more targeted, alternative.
For those reasons, and the fact that the lower you go the sooner you will have to start back up, my recent position has been that no further cuts in the Fed funds and discount rates are needed. If more Fed stimulus is called for, it can be provided through one of the special facilities.
10 3rd, 2008 10:29:22 AM
During an interview on National Public Radio in 2003, I was asked was it true that I'd visited Buddy Holly's grave in Lubbock. I said that it was true and he must have seen the picture of that in my letter in the Dallas Fed's annual report, alongside my picture at Adam Smith's grave and Sam Houston's. He asked me what Buddy ever contributed to the economy. I said his Rave On would have made a good anthem for the new economy of the late 1990s.