Jon Stewart to Alan Greenspan: Why Do We Need the Fed?

JBS | September 21, 2007
Dennis Behreandt

For most of the last many years that he served as Chairman of the Federal Reserve, the public heard very little from Alan Greenspan. His public utterances were usually short and devoid of content that might cause unintended consequences in the financial markets. Clearly, freed from the his role at the Fed as one of the most powerful men in the world, Greenspan no longer feels the same inhibitions. With the release of his new book, the former Fed Chair is even making the rounds on a publicity campaign. In one recent appearance he sat down with the Jon Stewart, host of Comedy Central's spoof news broadcast, The Daily Show.

The irreverent Stewart suffers none of the nervous ticks that prevent the cowardly cadre of so-called real "journalists" that staff America's news rooms from asking important questions during interviews. For instance, while talking with Greenspan, Stewart brought up the idea that America, supposedly, has a free market economy. "So, why do we have a Fed?" Stuart asked. "Wouldn't the market take care of interest rates and all that? Why would we have someone adjusting the rates if we are a free market society?" Greenspan's answer: "You didn't need a central bank when you were on a gold standard." Bingo! Somebody give that man a cookie! It's worth watching the rest of Stewart's interview with Greenspan, but this is really the most important admission a central banker has ever made. A truly free market would be based on a standard of value that can not easily be manipulated for political or other purposes. Since the move away from the gold standard and the creation of the Fed, that is exactly what has happened with the dollar. As Greenspan admits in the interview, we no longer have a free market where the currency is concerned, we have regulation. We also have severe inflation through the "miracle" of fractional reserve banking and the inflationary monetary policies that the Fed has followed ever since it's creation. For more on that, see economist Murray Rothbard's The Mystery of Banking or get a copy of The Creature from Jekyll Island. Or, just wait around for a few days or weeks here at the beginning of the 21st century. The consequences of the massively inflationary policies the Fed has followed for the last few years are sure to come home to roost sooner or later.