By Thomas Brewton ——Bio and Archives--April 24, 2011
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The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates. But most Americans are not feeling the difference, in part because those benefits have been surprisingly small. The latest estimates from economists, in fact, suggest that the pace of recovery from the global financial crisis has flagged since November, when the Fed started buying $600 billion in Treasury securities to push private dollars into investments that create jobs.The Times may be correct that "most Americans are not feeling the difference," but we will suffer the consequences increasingly over the next year or so. The price of gasoline is a prominent harbinger. As noted in The Price We Must Pay and The Weak Dollar Problem, the biggest factor in the oil price jump to around $110 per barrel is the Fed-induced devaluation of the dollar. That, by any other name, is inflation. A subtext to deliberate inflation, which President Obama obviously doesn't wish to publicize, is that it destroys incentives to save. In Keynesian dogma, saving is a social sin, on the false assumption that saving for future needs and future growth subtracts from consumer spending. Keynesians, of course, neglect to note that savings are placed in financial institutions that then lend and invest those funds to power economic growth. The real aim of deliberate inflation is debilitating private business and individual consumers to such an extent that they are forced into becoming wards of the collectivized, socialist political state. New Deal economists, led by Harvard's Alvin Hansen, propounded the Keynesian doctrine that capitalism had failed, and government would henceforth be required to take over employment and economic investment. President Obama, former House Speaker Nancy Pelosi, and Senate Majority Leader Harry Reid made it abundantly clear that they aimed to create a New New Deal to finish FDR's start at destruction of private enterprise and individual initiative. Fed chairman Ben Bernanke, a worshipper of the secular religion of socialism and its Keynesian economic dogma, has happily supported their efforts.
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Thomas E. Brewton—Native of Louisiana; graduated from Louisiana State University in 1956. While there had the good fortune to study political science under Eric Voegelin and Constitutional law under Walter Berns.
Graduated from the Harvard Business School in 1958, then worked in the Wall Street financial community for thirty years. After retiring, surrounded by liberals in Scarsdale, New York, began writing op-ed pieces for local newspapers and essays for my children, aiming to counter the barbarism of liberal-socialism. From this came my website, “The View From 1776”