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Priceless: How The Federal Reserve Bought the Economics Profession

http://www.huffingtonpost.com/2009/09/07/priceless-how-the-f...

"The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found."

(Probably a repost, but worth it)

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Generally a good article on the subject matter of the control

exercised by the Fed and its agents. I am careful though as to how many tears I wish to shed for one of the complaining "economists" mentioned in the article: James K Galbraith. (Son of John Kenneth Galbraith) The Keynesians have no stronger advocate than Mr. Galbraith. He has attacked (so have I) the monetarist consensus of free-market capitalism and insisted that only a return to Keynesian money-flooding (debauchery) would solve the so-called financial crisis that we live in today. Evidently his arguments were followed because that's precisely the course undertaken by the Fed and Uncle Skunk.

Although I do not think that his anti-Fed articles, though in no way "anti-Fed" in anything like the same manner as austrian school economists, should have been suppressed, simply for being critical of the Fed, it is also the case that I would suspect Mr. Galbraith would be only too quick to put the brakes on publishing any article that might be submitted from someone like, say, Lew Rockwell?

Like father, like son.

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"An economy built on fiat money is a society on its way to ashes."

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"An economy built on fiat money is a society on its way to ashes."

reedr3v's picture

bump,

though this was posted previously it's worth a look for those who didn't catch it the first time.

In order to get published,

In order to get published, it behooves to not be too critical of the Fed. In order to get tenure, or even to simply get recognition as an economist even without academic ambitions, one must be published. Hence, ambitious young economists orient their research and statements away from overt Fed criticism. Over time, these ambitious economists achieve leading roles in the field. Leading the general public to believe "all the smart economists" believe the Fed is beneficial.

For those "economists" on the overt Keynesian left, this is less of a problem, as the Fed's monetarist, Chicago school framework is considered "right wing", and there's enough left leaning outlets in academia and elsewhere for approaches like Krugman's to get a hearing. While the Fed approach advocate meddling via monetary policy, the Krugmanites advocate meddling via fiscal policy. In either case, the meddling involves wealth transfers large enough to keep those concerned about positioning themselves on the receiving end of the transfers busy promoting it's advocates' agenda.

The one's really suffering are those who advocate meddling neither via monetary nor fiscal policy, as they have no wealth transfers to promise to any interest group. But sadly enough for America, even a cursory understanding of basic economics validates their conclusions over either of the two dominant ones.