My letter about the Federal Reserve is published in The Record today. Below is the original sentence at the end of the letter which was omitted in the published version. Potential readers, more than 200,000.
Americans must back free enterprise
Regarding, “Fed faces tricky pullback” (Page L-7, May 24):
The reporter acknowledges that “the Fed has acted aggressively to try to boost the economy” over the past five years.
In other words, the Fed’s massive quantitative easing, a euphemism for creating, or printing, money, has done wonders for the stock market and other asset prices but little to boost production and employment.
Artificially low interest rates are not a substitute for real capital investment, which is the foundation of a robust economy.
As Austrian economist Ludwig von Mises summarized the attempt by a central bank to substitute cheap credit for capital investment expecting that more easy money would fuel an economic boom: “Credit expansion is the government’s foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending…”
Professor Mises’s words are more applicable today than when they were written more than six decades ago. Since then, our welfare-warfare economy has become super addicted to easy money, the final outcome either total government control over the economy or a return to sound money, limited government and fiscal responsibility.
It’s up to the American people to decide if they want collectivism or free enterprise.
Fort Lee, May 24
The writer is professor of finance at Ramapo College and a past candidate for governor.