Liberty Maven

A nice little piece from Robert P. Murphy at the Ludwig von Mises Institute critiques (actually tears apart) a recent article from the Wall Street Journal which illustrates a clear misunderstanding of the true nature of our current economic situation, and the “medicine” being offered by the Federal Reserve in the form of additional rate cuts.

I realize the WSJ is in the business of selling newspapers, and that calling injections of Fed funny money “medicine” is a catchy opening. But if our present crisis it the result of prior injections of artificial credit, then the medicine is in fact arsenic. What is especially ironic is that this very article later on alludes to the possibility that the housing boom was fueled by Greenspan’s low rates. In any event, the most recent Fed cut was largely symbolic, since the actual fed funds rate (as opposed to the official “target” set by the Fed) had already been below 1 percent for some time…

Murphy dissects the WJP piece almost line-by-line, and as usual, does a great job of bringing clarity to the situation at hand.  Read it all here.