The end-the-Fed movement is the natural outgrowth of free-market economics. The Federal Reserve is a government-created institution with government-granted monopoly privileges. Its interventions into the economy give rise to the boom-bust cycle, etc. If you’re a reader of this site, chances are you know the arguments already. (If you’d like one, here’s a really brief primer I prepared as my opening statement in a debate on the Fed.)
The correct argument against the Fed is not that we need the federal government to create our money more directly rather than delegating the task to the Fed, but that is the Greenbacker objection to the Fed. No free-market person thinks this way. No one who takes liberty seriously thinks this way. This naivete on the part of the Greenbackers is especially hard to believe since so many of them are 9/11 Truthers. That means their position is this: we believe the U.S. government conspired to kill thousands of its own citizens in the interest of furthering its imperial ambitions, but we think they are the best people to trust with the creation of money.
Not all Greenbackers are Truthers, to be sure, but the position is terminally naive all the same.
The purely free-market position is the complete separation of government and money. The Fed’s problem is not that it isn’t creating enough money, as the Greenbackers would have it. The Fed’s problem is that a government-privileged monopoly is creating any money at all.
How would the complete separation of government and money work? This overview by Prof. Jeffrey Herbener explains it.
I addressed a few of the main Greenbacker claims in Why the Greenbackers Are Wrong.
The reason I bring up the subject this morning is this. Someone posted on one of my Facebook pages a link to an anti-Woods article by a Greenbacker. When I went to look into who this person was, I found that his Facebook profile was mostly a list of quotations about money. Most of them are crankish statements by non-economists, but there are some by American statesmen. As usual, these quotations are fakes.
I have never seen any intellectual movement that is so sloppy about quotations. No effort is made to track down these quotations to primary sources. The movement has no scholarly standards. Even the documentaries that supposedly represent the movement’s best work are strewn with fake quotations.
Here’s the first fake I noticed in his profile:
The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity. – Abraham Lincoln
What is the source of this suspiciously modern-sounding quotation? Apart from other Greenbacker websites, I mean. What is the primary source? Can you find it?
Of course you can’t. It doesn’t exist. It is a statement by Gerald Grattan McGeer, a writer you’ve never heard of, in 1935.
Now look at how many Greenbackers have cited this fake quotation.