 This is Jeff Deist and you're listening to the Human Action podcast Ladies and gentlemen welcome back once again to the Human Action podcast the weekly show where we are not afraid to tackle and read and review Important books usually in economics, but sometimes in history and political theory and all kinds of subjects and last week. We were able to cover Rothbard's America's Great Depression, which was really fun a lot of good history there and we really enjoyed going through that Book or I certainly enjoyed going through that book and so this week in somewhat the same vein. We're going through another Rothbard book the case against the Fed and much like America's Great Depression is one where he combines his Seemingly insatiable knowledge of history with also some mechanics and technical economics So the case against the Fed is a very slim volume. It's just a little bit over a hundred pages So in that sense it is a bit like what is government done to our money? But it's also I think a little bit more interesting and technical than that book so here to join us To work through this is our great friend and senior fellow mark Thornton. So hey mark. Good morning. Hey, Jeff It's great to be here. Thank you for inviting me to discuss this book with you Well, I want to just lay out a couple particulars for people First of all the case against the Fed is available on our website Mises.org just entered Case against the Fed in the search engine you can find a beautiful html format, which is even searchable I believe you can also find a PDF The book's very cheap in paperback. I believe $7 at our website So I want to first encourage that but the other thing I wanted to mention mark was that this may be really the last Substantive book length thing that Murray wrote he wrote this in the mid in 1994 or at least completed it in 94 He died then in January of 95 and he actually wrote this for the Mises Institute. We were the publisher Yes, and it's a it's a great work it's a tour de force and you get an incredibly dense amount of information in an entertaining fashion and little over a hundred pages and look what you get you get 30 40 pages which brings you up to steam in terms of money in banking So instead of taking a course in money in banking you can just read 30 or 40 pages and you get all the essentials Everything from the evolution of money to banking It's just wonderful and then also As you read through this book you get a course in American economic history Which you otherwise wouldn't have any access to? traditional American economic history texts Give you the American point of view essentially this gives you a more realistic point of view And that basically you know a lot of Americans have recently come to know that what government is doing to us now Is largely a scam? You know the bailouts the lockdowns the virus All of this stuff that's been happening to us slowly but surely more Americans are learning that this is all a scam Well, Murray Rothbard shows us that there's these scams going on throughout American history So it really brings us up, you know right to the present in the most important central point that Rothbard Raises I think throughout the text is that the Fed is not in the business of fighting inflation That's the cover story what actually is going on is the Fed is Creating inflation and as it gains power It's ability to inflate the money supply has ever increased Yeah, what's interesting is in the introduction he talks about how ridiculous it is to think that the private sector is out They're clamoring for inflation and that if left to its own devices, this would be the natural course You said you know on the contrary. Yeah, it's a complete lie You know the the whole purpose of the Fed is to be able to increase the money supply to allow banks to increase their assets without any constraint and That cover story basically is all a lie The Fed is the cartel device that allows banks to inflate Their assets at will and if they ever get in any trouble, of course the Fed is right there to bail them out Well, one thing I liked about this book in particular is that Although 1994 is quite a while ago It's it's certainly more current than all the stuff he was writing about money in the 60s for example and so the Fed's balance sheet at the time he's writing this book its liabilities is 400 some billion and that actually Maintained fairly steady up until the crash of of 08 So the balance sheet didn't rise all that much between 94 and 2007 so there's you know, there's it's the numbers are of course have exploded since both in terms of the debt side and the Fed's balance sheet, but it's interesting to read that the other thing. I really liked in the intro was he talks about Henry Gonzalez and Barney Frank who were both members of Congress prominent members of Congress in 94 and Of course when Ron Paul got back into Congress After the 96 election in 97, you know He served with both them Barney Frank was of course very friendly to Ron and always gave him His due on the banking committee and was respectful to Ron's criticisms of the Fed So I thought that was interesting, but also the fact that Henry Gonzalez a Democrat a Texas Democrat who was always very well-dressed by the way He had some really some very mild and milk toast reforms aimed at creating more transparency For voters and for for lay people with the Fed and one of them is that we ought to have a real audit not just a de facto Audit of what the Fed owns on its balance sheet at the end of the year But some some audit into his actual rate-setting functions and some transparency and visibility and at the time the maestro Alan Greenspan Said no no no the Fed is independent We can't have this sort of tinkering and so even these modest reforms were were shot down and failed in Congress Yes, 1994 is now the good old days in terms of the Fed and its power and its balance sheet things seemed much more manageable and more disposable back then and you know people were actually talking about reforms and transparency At the Fed trying to bring back power to the people so to speak and less power less authority Less independence for the Federal Reserve, and I think that if we had achieved some of those mild reforms We might not have gotten into the position We are today with a Fed that is just totally out of control Totally monetizing the debt And all these bailout packages basically, you know where the Fed is infallible and all powerful Well, I was struck that it wasn't all that long ago that the left in this country Viewed the Fed with some trepidation as an instrument or a tool of the rich and that seems to have disappeared Yes, it has and you know modern monetary theory, of course is is new on the scene and it's been embraced by the left so that Basically they can carry out all of their agenda in terms of the Green New Deal welfare for all basic income Right on down the list because you don't there's no constraint on the budget anymore And so the left can do whatever it wants The government borrows the money and the Fed monetizes it and so it's like magic. The left has discovered this tool first put forth on by the right and Hopefully they don't get the power to actually do that, but it's de facto in existence already I always thought that the Fed and central banking would be a great crossover Populist issue where left and right could find some commonality, but and when I say left I shouldn't speak too glibly right the left isn't monolithic and there are people on the left Critics like know me Prince for example who's not all together convinced that the Fed is working in the interest of little guy But there's also I think deep hypocrisy like for instance the congressional black caucus has been exceedingly Pro-fed because ostensibly this helps, you know first-time Buyers and low-income people get into homes and so this was their big song around 07 And what we saw was that a lot of black folks bought homes and then lost them In the crash so I you know, there's it's kind of a mixed bag, but What's great about this book? I think as you mentioned is you get this really in a hundred odd short pages as this walkthrough this tour to force of And it starts out with a nice little Hungarian treatment of the origins of money how it arises as commodity how it solves barter But also how it allows us to calculate as he points out imagine if at the end of the month You spent you know ten chickens and four goats and two grains of wheat or two bushels of wheat and you've got You know five pearls and seven years of corn. So how would you ever calculate without a a? University or at least widely accepted medium Well, there's always hope for that populist crossover movement to reestablish itself. It's come up through time In the 19th century and in the 20th century, you know people on the left and the populist movements Of the past have come to look at monetary reform is really very important So I think that's has a potential to reemerge Again, and I think it's very important That stuff that you mentioned about menger and the evolution and emergence of money on the marketplace And solving the problems of barter all of those things are have to be exposed to the general public because Right now the general public doesn't really have a firm grasp on terms of what is money What it does for us, uh, they just have a very glib view Of money and why do I have so little of it and why do others have so much of it? Well, that's a separate and distinct problem But once people understand the basics of money and what it does in the problems It can cause in terms of rising prices in terms of the business cycle In terms of economic destruction Unemployment bankruptcy and so forth, which is sprinkled throughout the text basically that these are problems that are caused by problems with money Uh, then you really have the potential for the reemergence Of this populist monetary reform movement to be reestablished in the past, of course, uh in the leading up to The establishment of the fed of course the arguments the public arguments were manufactured and artificial Um on behalf of the large new york city banks. So we have to take that back well in the middle of this book he gets into a Brief discussion of monetarism and the quantity theory of money, especially at page 25 and he brings up Of course, uh, someone you've studied in depth the french economist richard cantillon And uh discusses the lack of neutrality of money. And so rothbard it which is typical I think manages to to bring up the moral component of all this Absolutely, uh, richard cantillon and the his essay Dating back to 1730 very similar to rothbard Condense precise treatment of issues that other people had not really studied or even had a firm grasp of and You know issues like The naive quantity theory of money are dealt with by cantillon and rothbard in a very straightforward fashion, uh, they both exposed the fallacies of the mechanical view Of the quantity theory of money and what's really going on and the real disturbances that we otherwise can't see And that's really important is economics allows us to understand Those things that we cannot see And in particular here rothbard brings up the cantillon effects In that if you expand the money supply You change relative income change relative prices and therefore you change relative incomes Somebody is being enriched In the process of expanding the money supply Particularly the government and those in the banks and those who get the money first And everybody else's disadvantages. They lose relative wealth and income In that process they're impoverished because they can't buy as much Of goods and services with their incomes that they used to be able to do So again economic theory on the part of rothbard and cantillon and others Exposes what we otherwise can't see and allows us to understand Things that we can't see Well and the morality of course Is intertwined with property rights themselves a lot of this is hidden As you mentioned and and so when relative incomes and relative purchasing power Are changed by either a government or central bank Rapidly or perhaps unnaturally increasing the money supply What what happens is a form of of enrichment And and theft But we tend to not think about it or understand it that way we tend to view all these central banks are sort of technical You know making technical changes and things not moral changes. Yes, that's right and um one of the things Here is that's really important for everybody to understand and rothbard really drives at home here As well as cantillon did is that the amount of money in the economy is sufficient to Basically do all transactions. You don't have to increase the supply of money to for us to be A bigger economy or more prosperous Any supply of money will do the task And so, you know, it's embedded in most people's thinking That the Fed is there to Increase the money supply at a regulated rate, you know, so it's doing a technical service When actuality is that It's robbing some people and enriching other people and that's really the moral aspect of this Issue is that it hurts the economy overall But in terms of who wins and who loses There's definite people who win and there's definite people who lose In the process of expanding the money supply And rothbard points out very Clearly that any quantity of money The existing quantity of money will do and that if it, you know, over time you will get increases in the supply of money As the purchasing power of money increases It will increase the incentives for people to go out and dig up more money, basically And so there's a natural increase in the money supply That grows very slowly, but any supply of money will actually do the trick in terms of the functioning of the economy So it's not the supply per se. It's a rapid increase or decrease in the supply Yes, I mean the the thing about money and its purchasing power Is that it's relatively stable and early on in human history Human society Used and developed a lot of different things to serve as money things like salt and shells and you know animals crops dates walnuts and and so on but over time The properties of money that were most marketable led human society to things like gold and silver and copper, which were homogeneous Which were highly valued relative to size. So they were easily transportable And so those properties of gold and silver and copper Won out in the world marketplace essentially And of course eventually people learned to coin money so that you had individual Homogenous units of money And so, you know through most of human history thousands of years bc On up into the middle ages basically money was a commodity It became coined a couple thousand bc And it basically allowed the flourishing of human society and You could view government money And central banks as a parasite on that beautiful flourishing of human society So in the middle of this book he gets into his treatment of deposit banking Which we might also refer to or he does refer to as money warehousing and this idea that When you deposit money that ought to create a bailment contract much like when you pawn something at the pawn shop as opposed to a debtor creditor Relationship which is how you know if you go get a checking account at b of a tomorrow. That's how it actually works. So How did we get so off track here and are you a hundred percent in agreement with his criticisms of fractional reserve? I know this is a can of worms I but it's and it's beyond perhaps the scope of this book But I think it plays a key role in this book. Well as you you know go through time You know money is a valuable commodity obviously and so people want to protect that money And the best way that they could protect that money was to deposit it in a money warehouse The safe of a goldsmith or the vault of a bank There you could safely store Your money And then of course we learned over time that we could use certificates of various sorts To transfer money from one owner to another from one bank to another From one country to another so we they developed banknotes to represent your deposits In banks there were bills of exchange that people could do international trade Which is of course very important to the flourishing of humanity and so that Large amounts of money could be easily transferred over long distances And those were incredibly important to the development of international trade You know at a fundamental level When you go to fractional reserve banking where the bank doesn't necessarily hold all of Your gold In equality with the amount of paper certificates that it issues. It's you know banknotes and things of that nature That's when you get into a lot of trouble First of all you're expanding the money supply so it induces all the problems we've already discussed But of course it also opens up the opportunity not really an opportunity but the possibility of banks failing of them Of depositors trying to access their money at one time Whether it's based on the fragility of the bank itself Or events in the real world such as war and people want to actually have their money on their person And then we find out that the bank doesn't actually have enough gold or silver in order to Meet all of these requirements for withdrawals From the economy and so this is a whole different problem of bank collapse Basically where the bank collapses it can't meet its requests for their deposits And as a consequence it causes chaos between the bank and all of its depositors And all of their businesses You know I mentioned earlier that rothbard always brings history into things and I think the historical treatment He gives us here not only of the bank of england and central banking more generally but also specifically the us fed It is so important because we tend to Believe these sanitized versions of how institutions come into being when in fact there's often Really some sort of low and mean Impulses behind their creation and we certainly find that here I mean he starts out mark with the bank of england late 1600s. I mean that's a long time ago and what struck me is Even back then his description of the purpose of central banks Rings so true today. Let me just read it for people real quickly. This is actually at page 58 of the book He says he was talking about the bank of england. So we're talking, you know hundreds of years ago the central bank Has always had two major roles One to help finance the government's deficit and two to cartilize The private commercial banks in the country so as to help remove The two great market limits on their expansion of credit. That's that sounds absolutely true today Oh, absolutely. There's no question about it. Um, the bank of england 1694 Basically england had gone through a period of civil unrest and civil war You know in terms of trying to consolidate their power And tax the people And at that point they were basically the the government itself was bankrupt And yet it had a lot of wishes it wanted to do it wanted to suppress the french It wanted to expand the empire Note the time here, you know before the american revolution The english were were doing a lot of things all over the world and they needed money to do it So a scottish promoter came to them with the idea of you know, you give me A monopoly on the issue of bank notes and you guarantee that you deposit all of your revenues with my bank and i'll Issue notes sufficient enough to cover your debt and to increase your expenditures to go to war with france, which it did Less than a decade later and you know, you had the war of spanish succession, which was war throughout europe basically For a period of more than 10 years And so that's that's really what it all boils down to is that the A central bank in general can Cover the debts Of the government and it also simultaneously Eventually at least provides for a cartelizing device For the banking system because of course the central bank is fragile And the banks below it are going to be also fragile So they all have to be managed in a cartel so that no one Bank is going out on its own And so there's uh, you know certain limitations that apply here boy That's a whole another topic isn't it war finance and central banks. I'm not sure we could have broad scale World wars without them. No absolutely not mesis, you know the ultimate medalist basically Said that with a real gold standard it handcuffs the government's hands to do outrageous things And it could be war. That's the most, you know obvious Event that is precipitated here, but it could be anything It could be any type of reckless spending on the part of the government and all of a sudden You know if people see this recklessness Uh, they what do they do? Well, they would draw their their money from banks basically And they they want to get their money out of the country so to speak And so the gold standard as mesis showed was the ultimate check On government folly Yeah, that's sad and tragic to think of no question about it. I mean the two two horrific world wars in the 20th century There's also the century of central banking, but but if we if enough people recognize this That itself could precipitate changes which would check These kind of policies so you know this warfare and this globalism and all that can be stopped That's the that's really the the overall key is that we can Bring this to an end Murray says that it's just a matter of will Once we have the will we have the way So to speak to change all this to bring it back down to a manageable level That not only prevents all this government warfare and so forth, but it also Brings stability to society it allows us to clean up all The other problems that have developed over time in terms of poverty in terms of Income distribution that we face today These things can be solved and and it basically boils down to one word which is will and will is based on knowledge Well, I certainly hope so I hope we have that will maybe we might need it As things are stand, um, we don't have it yet, but we can have it. That's the key And uh, once we realize that we can have it and that it's based on knowledge You know, this is what makes rothbart's case against the fed so powerful and has so much potential Even though it was written more than 25 years ago. It's very very incredibly relevant today Well part of that case and part of that knowledge is based on the truly sordid background of the creation of the fed itself And rothbart spends spends a good part of this book sort of mid to late in the book talking about the history of the fed itself Talking about the bank of the united states established by hamilton He goes through, you know, wall street fat cats basically wanted a central bank in the late 1800s He goes through a discussion the morgan railroad empire the rockefeller oil empires how these two seemingly adversarial Families got together the panic of 07 which is sometimes used as a justification for you know needing a central bank So all of these things as as usual and as you would expect if you've read rothbart's Other histories his progressive era You know, he he throws in A lot of deep understanding that that helps us I think as people most of our audience are probably people who are predisposed to Look at scants at central banking even conceptually But I think a lot of this historical background is important to give us the ammunition against people who say well This was all designed for stability and help us Yeah, and people say oh, that's just a conspiracy theory, but rothbart, you know goes into intimate details About how this is all woven together the power Of these large corporations and these large banks. I mean, it's great that we have them, right? I mean it's it's uh It's great that we have uh corporations that can make steel at such a low price Uh and facilitate international trade and all this stuff, but ultimately a lot of these power brokers Use their positions and their allies to seek out artificial power outside of the marketplace and uh, ultimately They wanted a central bank to Manage the the cartel amongst all the various combatants And there's about 20 odd pages of these intimate details And obviously you don't have to Know and memorize All of these details. It's just there so that you Know that there really was an historical struggles for government power in the establishment of Of the central bank and uh, so that's why it's important that it's not just a conspiracy theory That's somebody made up. These are intimate details. It would take it would take me probably 10 years If I tried to reconstruct What Rothbard knew and what he wrote about this period Roughly, of course, it's an ongoing battle, but after the 1896 election And then the uh the passage of the gold act which they they wanted a gold standard system They didn't want silver and then there was a long process probably, um Well more than a decade long process of trying to achieve The federal reserve act that you know ultimately came about And it's a power struggle you you can see the intimate details of what went on there, but basically It was a long-standing effort of propaganda on the american public where you know these power brokers use third parties You know business organizations type of things to The american people through so-called research at the university of chicago and You know business owners associations throughout the country and then feeding newspapers stories and arguments that why central banking was needed And you know why the current system was inadequate And then really they just had to wait for power in washington dc to write legislation in their direction and then of course the panic of 1907 Would further enhance their efforts by being an example of what happens if we don't have a central bank Of course in addition all this history You get rothbard laying out and helping us understand mechanically What central banks do and i think this is this is just so important for people Especially if you have friends or family members who really don't understand the fed or don't have much knowledge of it at all I mean this book's a great place to steer him because throughout the book. He actually has examples of t accounts where we've got Assets on one side and equity plus liabilities on the other side Now I think at page 140 in particular. He lays out sort of the two-step process of monetary expansion whereby first the fed acts to expand The holdings of central of commercial banks, excuse me, and then The step two those commercial banks turn around and expand The the amount of money and credit of sliding around in the system So I think this is one of the great benefits of this bookmark is it really gives people simple and clear very rothbardian Explications of how this whole process works and almost a mechanical sense Yeah, and you get different levels of analysis that some people will you know Use the logical exposition that rothbard puts forward Other people will Look at the t accounts the accounting Level is the best way of understanding things and then other people will look at rothbard's historical examples as the best way to understand this whole process by which The money supply can be manipulated and expanded and directed By the central bank and of course nowadays We're in this great monetization of the government debt where the the treasury issues debt The fed buys the debt from banks And that gives banks fewer assets but More money to be able to lend out and so you get in a multiple expansion Of the money supply based on what the fed is triggering Within the banks in your very hometown some in some cases, but more likely it originates in the big new york city banks basically and The process is all laid out. It's easy to understand And you know when I used to teach money in banking And I'd go through the whole course and students would inevitably come into my office near the final exam and say You know, we've been reading this stuff. We've been trying to understand it We just don't get it. There just seems to be something wrong And I would have them sit down and I say well the one thing I didn't mention Throughout the course is that basically this is all a scam And they would look at me like I was going to explain it But I said you guys know you've seen it and you just couldn't absorb the fact that You're being scammed everybody's being scammed and that was it. They would just stand up and leave Knowing that that was the missing piece Well, they might go back to their dorm and call their parents and say what am I getting here at auburn? I'm finally I finally got a professor. Tell me what's up. So that's That's uh, I'm sure auburn doesn't want you telling him that but office hours are office hours. So So I want to wrap up this discussion With what absolutely blows me away. The most interesting part of this book by far to me is the just five or six brief pages at the end Typical murray Rothbard. It's called what can be done? And here he actually lays out a mechanical blueprint again It's all about will political will but a mechanical blueprint for how we could actually unravel how we could end the fed And I just thought that you know if anybody can just take the time to read this And understand what he's talking about they'll find it absolutely fascinating Yes, it's um, it's simple. It's very businesslike He's cancelling assets and liabilities between the fed and the central government And he's saying okay, what assets are left in this bankruptcy or this liquidation Of the fed and he looks at basically how much gold does the Fed and treasury Possess and then what are their liabilities in terms of the amount of money or bank notes that have been issued into the economy And then he just Revalues the amount of gold So that every owner possessor of the liabilities the bank notes the money Gets a share Of that gold supply those gold hordes At the fed and the the treasury issues gold coins To redeem the amount of notes that are coming in from the economy to clear the federal reserve from the economy And uh, you know, there's a lot of minor issues. There are a lot of side issues But it's basically a straightforward liquidation Or bankruptcy. I go through a similar process in my skyscraper curse book Of how to liquidate the fed in more up-to-date Terms, but it's actually very simple. You know where most people Think well, that's impossible to liquidate. We just have to continue to inflate our way Until the whole things comes crashing down But no, there's a very logical straightforward way Of addressing this monster in washington dc and in new york city So there is a solution basically and it's very simple the consequences may be very difficult But the process of liquidation is not well for our listeners I want to just work through a few of these numbers real quickly So unlike most countries our fed does not own gold per se what it holds on its balance Sheet is called a gold certificate account. So since 1934 and the gold reserve act Transfer the actual ownership and possession of physical precious metals to the treasury Although it's it's actually supposedly housed with the u.s. Mint. So When rothbard writes this book in 94 that gold certificate account is valued at 11 billion dollars On the balance sheet and that 11 billion is still the same today That's because in 1973 Statutorily gold was set at 42 and 22 cents an ounce. So About 260 million ounces are held Again supposedly by the treasury and and at 42 an ounce that comes out to about 11 billion dollars So the 260 million ounces is still the same today the 11 billion on the fed's balance sheet is still the same today But of course what's changed radically mark And rothbard talks about letting gold float to its actual market price to help The fed unwind its liabilities was when when rothbard writes the book In june of 94 golds about 387 dollars an ounce today It's about 1800 an ounce But boy, oh boy, you know talk about all the tea in china Is there enough gold there 260 million ounces To unwind all of this it seems like the numbers have just gotten so enormous that it's almost unthinkable It seems that way, but it is doable And who knows I mean The price of gold in a couple years could be $10,000 You know as All of this inflation monetary inflation Works its way through the system We could see much higher Prices for real things like commodities And much lower prices for for other assets such as stocks and bonds And so it's a fluid market, but at any one particular point in time You can do the math the price of gold has risen considerably over $1,400 An ounce since that time And but unfortunately the national debt has Increased significantly over time. So the the numbers actually Gold would have to be revalued at a much higher price than the current market price Whether the market does that or whether the liquidation Officials do that is just a matter of what actually would happen at the time I suspect that you know Rothbard would just say Take the national debt clear it of its Assets that are canceling with the federal government and then basically Revalue the government's gold at whatever price is necessary To basically cancel out all of the bank notes And this is what happens in a regular bankruptcy court Is that you take the assets of the bankrupt entity And you put them out into the economy at a prorated basis So if a company goes bankrupt and it has four creditors who have equal shares Then you take whatever assets The company has after and you just basically give Each creditor One quarter of those assets Right and Ron Paul suggested this during his two presidential campaigns the point that murray rothbard makes here Which is that any treasury debt held by the fed itself Should just be immediately canceled and right now that stands at about five trillion of the 27 trillion So you do have a almost immediate mechanism right there Just cancel the debt that we supposedly owe to ourselves But I I think it's important to point out that The u.s. Government's debt is a different thing than the fed unwinding itself and it's in its liabilities I mean we're talking about two different things. Yes, that's right, but the magnitudes are very similar You know the debt has increased, but the money supply Has also increased so they're not the same thing, but they're roughly Parallel in their magnitudes. Um, you know the money supply is not 27 trillion dollars But it's increased significantly Just as the national debt is increased Significantly in the fact that we're the central bank the federal reserve is monetizing the debt now Means that that parallelism Has continued and that it will continue until the political regime is changed and the political will of the american public has changed Well, if you want to conceptualize maybe the unease you're feeling with what the fed is doing If you go to the st. Louis fed's website, they call their it's called fred You can track the fed's balance sheet. Basically, it's liabilities When again when rothbard writes this book it's in the 400 billions and up until the crash of 0708 It only rises up to the 600 billions. It's about 700 billion I think it you know seven and then after the crash of 08 it spikes up to over 4 trillion dollars so, you know many multiples and and It finally begins to taper off a little bit Uh in in recent years and gets down below 4 trillion But then with covet and all the shutdowns of last year It's it's again spiked up to over 7 trillion dollars in less than a year So when you look at all that mark and you think about the the money and credit creation on it's just It's it's hard. I think for average lay people to conceptualize. No, there's no question about it You know the fed has done a wonderful job in Covering itself with the illusion of being great and You know the numbers are so enormous that an average individual just Is so out of touch with those kind of numbers I think they're out of touch with the idea that We're going to pass a bill that's going to increase spending by 1.9 Trillion dollars and we're going to you know Increase the national debt by 1.9 trillion dollars on just one vote of the congress those numbers are beyond The average person's understanding, but you know, we're a big country so numbers are naturally big and But it all it all comes down back down to the basics of what Rothbard has discussed Throughout the case against the fed The you know over 25 years the numbers have changed, but the principles are the same You know it wasn't that long ago that fed officials including Janet Yellen did at least give lips Or is the idea of someday normalizing the fed's balance sheet Which is which is another way of saying getting it back to pre-crisis levels So while there are people like Stephanie Kelton and Paul Krugman who were saying for the most part not entirely But for the most part debt and deficits don't matter It seems today we have a new class of economists a monetary economist who is effectively saying that the fed's balance sheet doesn't matter Yeah, things have changed 25 years ago when Rothbard wrote this There were Battles within the federal reserve itself. There were hardcore monetary people running regional Actual hawks. Yeah actual hawks Who not not literal hawks. They were humans, but hawkish on on the fed's balance sheet But now it's basically all ultra doves Uh in terms of monetary policy Janet Yellen is the ultimate dove She doesn't see anything wrong with the fed She thinks that you know the fed can do everything now. She's at treasury. So things are a little different, but uh, basically Uh, the fed has become nothing but a a dovish inflationist monster And the mainstream of economics has Changed in that same basic direction Where they think that The the national debt doesn't matter The fed balance sheet doesn't matter. They see it as a tool of good They see it as a tool of solving problems And they don't they don't want any constraints On the fed or the treasury to do to carry out these operations. Basically, they seem willingly unaware Of the problems that Rothbard discusses in this book There's just basically no problem with with all these operations. They think they think it's normal Basically, and that there's no downside To it and they of course, they have to talk a good Game and so Yellen will always talk as well as You know people at the federal reserve. They'll always talk as if things will Come back to normal in the near future, but right now we're obligated to do this on the behalf of the american people Well, you know what else has become normal is former fed shares getting filthy rich After they leave and this applied to allen greenspan and applied to membranaki And we now find out it's also applied to janet yellen who from citadel LLC alone made over 800 000 dollars in speaking fees They're one of the hedge funds that came along and sort of helped recapitalize Um the the the hedge fund that lost so much shorting Game stop stock. So, you know, it really is an unholy story Nobody tells it better than rothbard. Nobody tells it faster or more succinctly. I think So the book is the case against the fed You can find it at mesis.org for free in both html and pdf formats You can buy it for a measly seven bucks And I really suggest you give this book a read if you want to understand money If you want to understand a little bit history And and you want to have a sense of just how bizarre and extraordinary things really are because You know 1994 sounds quaint Right about now, especially when we look at the numbers. So all that said mark dorton. I want to thank you so much for your time Thank you. Jeff ladies and gentlemen. I want you to stick with our podcast every week. Keep reading these books Keep informing yourself And we'll be back next weekend with patrick newman talking about his new and upcoming book on the history Of crony capitalism in early america. So stay tuned The human action podcast is available on itunes soundcloud stitcher spotify google play And on mesis.org Subscribe to get new episodes every week and find more content like this on mesis.org