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George Selgin


Cato Institute, Wash., D. C., 2017, 379 pgs., index, notes, references, tables, figures, with several chapters contributed by Lawrence White, and William Lastrapes


Reviewer comments:

Professor Selgin writes from a 'libertarian' perspective and to some extent from the "Austrian School' of economic thought. He is the director of the Cato Institute's Center for Monetary and Financial Alternatives The author cites numerous scholarly reports by others detailing the real history of money and banking in the United States, which show that the FED claims that its own creation was essential to 'cure' what it asserts was a malfunctioning and disaster prone American banking system before 1913. And he cites other studies to show that since 1913 the FED has mismanaged national monetary policy to make matters worse.

I include the dates of original publication of these essays in order for the reader to understand what the author knew and did not know about the entire development of the subject since those dates.



Dr Selgin describes his purpose for writing these essays now published in one volume. They were originally written over several decades, so some may be 'dated' in tone, but all are still relevant. His contention is that many professional economists today do not really understand either what the pre-FED actual American banking system was and accomplished or what the FED has actually failed to accomplish since 1913. They simply accept the FED's own propaganda.

He writes: "Despite the Fed's spotted record, most people, economists included, continue to regard it and, more particularly, its governing and monetary policy making bodies, the Federal Reserve Board and the Federal Open Market Committee, as the best of all possible means for managing the U.S. dollar, and for indirect regulating interest rates, prices, unemployment, and countless other macro- and microeconomic variables."

He continues: "Yet the surprising truth is that most economists, including most champions of the monetary status quo (or something not far from it) are only vaguely familiar with alternative arrangements, assuming that they are aware of them at all."


Chapter 1 - A Fiscal Theory of Government's Role in Money -with Lawrence White, originally published in 1999.


Chapter 2 - Central Banks and Sources of Financial Instability - based on a lecture from 2009


Chapter 3 - Legal Restrictions, Financial Weakening, and the Lender of Last Resort - originally published in 1989


Chapter 4 - The Suppression of State Bank Notes: A Reconsideration - originally published in 2000


Chapter 5 - Monetary Reform and the Redemption of National Bank Notes, 1863 - 1913- with Lawrence White - originaslly published in 1994


Chapter 6 - New York's Bank: The National Monetary Commission and the Founding of the Fed. - originally published in 2016


Chapter 7 - The Rise and Fall of the Gold Standard in the United States - originally published in 2013


Chapter 8 - Has the Fed Been a Failure? with William Lastrapes and Lawrence White - originally published in 2012


Chapter 9 - Operation Twist-the- Truth: How the Federal Reserve Misrepresents its History and Performance - originallly published in 2014

This is a particularly devastating critique not only of the continual failures of the FED to perform its public missions but even more of its constant public relations campaigns to claim that it has been and is doing its mission. The author provides extensive direct quotations from senior FED officials that are obviously false in their claims.


Chapter 10 - Liberty Street: Bagehotian Prescriptions for a 21st-Century Money Market - Originally published in 2012


Some related references

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Selgin, George, Fractional Reserve Banking

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Conti-Brown, Peter - The Power and Independence of the Federal Reserve

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Kay, John - Other People's Money

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Kaufman, Henry - Tectonic Shifts in Financial markets

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Booth, Danielle Dimartino - FEDUP

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Foroohar, Rana- Makers and Takers

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Wallison, Peter - Hidden in Plain Sight: What Really Caused the World's Worst Financial Crisis and Why it Could Happen Again - Ecounter Books

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Melloan, George - The Great Money Binge

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von Mises, Ludwig - The Theory of Money and Credit

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Mishkin, Frederic S. - The Economics of Money, Banking &Financial Markets

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Board of Governors - The Federal Reserve Systemn Purposes and Functions

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Wessel, David - In FED We Trust

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Admati, Anat & Martin Hellwig - The Bankers' New Clothes

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Calomiris, Charles W. - Stephen H. Haber - Fragile by Design: The Political Origins of Banking Crises and Scarce Credit -

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Mehrling, Perry - The New Lombard Street: How the Fed Became the Dealer of Last Resort


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