In April 2011, two years shy of its 100th birthday, the Fed held its first press conference in history in response to mounting criticism of its lack of transparency. In other words, the Fed felt that it had to walk out into the sunshine and defend itself. And,no doubt as part of the same public relations effort, recent Fed publications reveal a concerted effort to perpetuate the myth that the Federal Reserve System is not a central bank at all, but a system of banks that serve “our local communities.”
For those of us studying in economics departments in the late 1990s, reverence for the Fed as an institution was unquestioned. Today, however, while it is still largely misunderstood by the public, the Fed has become something of a byword for secret deals and crony capitalism among a growing segment of the population.
None of this happened by accident, of course. The Fed’s role in the destructive dot-com and housing bubbles of recent decades, and its role in the heightened monetary profligacy of recent years could have remained comfortably in the shadows as it has done for most of the Fed’s century-long history. What’s different this time is that, with the help of the web, Ron Paul’s 2012 campaign, and of course, the Mises Institute, the Austrian School of economics is no longer an obscure and ignored minority.
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