by Sennholz
[Introduction and the Great Society Economic Debate]: Hans Sennholz introduces the economic landscape of 1966, contrasting the views of Harry Truman, Lyndon B. Johnson, and Walter Heller regarding interest rates and inflation. He critiques the 'stop-and-go' Keynesian economics of the Great Society, arguing that government spending and monetary depreciation are the true roots of economic instability rather than the symptoms politicians attempt to treat. [The Makings Of The Boom]: Sennholz defines inflation as an expansion of the money supply rather than merely rising prices, accusing the Federal Reserve of fueling an artificial boom through massive credit injections. He explains the mechanics of how central bank credit expansion lowers interest rates, leading to malinvestments and an eventual recession once production costs rise and capital resources are exhausted. [The Zigzag Course Of 1966]: This section details the volatile monetary policy of 1966, where the Federal Reserve alternated between stability, inflation, and sharp deflation. Sennholz tracks the immediate negative reactions of the stock market and housing industry to these shifts, arguing that the central bank's attempts to simultaneously lower prices and interest rates resulted in a confused 'zigzag' course. [The Johnson Program and Future Outlook]: Sennholz predicts continued inflation and eventual depression as the Great Society's labor legislation and tax burdens stifle the private sector. He warns that the administration's ultimate response to the failure of its monetary policies will be the imposition of wage and price controls and rationing, which he views as a transition toward unadulterated socialism. [Cracker Barrel]: A brief concluding reflection by Jack Mopfitt on the importance of the word 'No' and the necessity of moral courage, referencing the negative phrasing of the Ten Commandments.
Hans Sennholz introduces the economic landscape of 1966, contrasting the views of Harry Truman, Lyndon B. Johnson, and Walter Heller regarding interest rates and inflation. He critiques the 'stop-and-go' Keynesian economics of the Great Society, arguing that government spending and monetary depreciation are the true roots of economic instability rather than the symptoms politicians attempt to treat.
Read full textSennholz defines inflation as an expansion of the money supply rather than merely rising prices, accusing the Federal Reserve of fueling an artificial boom through massive credit injections. He explains the mechanics of how central bank credit expansion lowers interest rates, leading to malinvestments and an eventual recession once production costs rise and capital resources are exhausted.
Read full textThis section details the volatile monetary policy of 1966, where the Federal Reserve alternated between stability, inflation, and sharp deflation. Sennholz tracks the immediate negative reactions of the stock market and housing industry to these shifts, arguing that the central bank's attempts to simultaneously lower prices and interest rates resulted in a confused 'zigzag' course.
Read full textSennholz predicts continued inflation and eventual depression as the Great Society's labor legislation and tax burdens stifle the private sector. He warns that the administration's ultimate response to the failure of its monetary policies will be the imposition of wage and price controls and rationing, which he views as a transition toward unadulterated socialism.
Read full textA brief concluding reflection by Jack Mopfitt on the importance of the word 'No' and the necessity of moral courage, referencing the negative phrasing of the Ten Commandments.
Read full text