Fumbling at the Fed

Here's my and Russ's GMU Econ colleague Larry White discussion the Fed yesterday on C-SPAN.  Larry's appearance starts around the 47-minute mark.

I'm reading now – for the first time, I'm chagrined to admit – Vera Smith's 1936 book The Rationale of Central Banking and the Free Banking Alternative.  It's outstanding.  Here's a quotation from pages 4-5 of Smith that is especially relevant in light of Larry's remarks:

Neither do we find that the authorities responsible for introducing central banks into countries previously without them have any clear idea of the benefits to be obtained therefrom….

An examination of the reasons for the eventual decision in favour of a central banking as opposed to a free banking system reveals in most countries a combination of political motives and historical accident which played a much more important part than any well-considered economic principle.