Editor:

This morning I listened to our president present a program to implement extensive government financial and economic regulations. This to address the effects of the economic tsunami in which we find our country. Unfortunately, he was disingenuous in his oratorically impressive presentation because he along with many in his administration are not addressing that which caused what his mis-guided actions are attempting to correct.

The cause of our economic tsunami is the same as that which caused the 1929 Stock Market Crash and Great Depression and subsequently every recession, stock market bubble, housing bubble, etc. It is what caused President Nixon to take the country off the Gold Standard in 1971 and the subsequent hyper-inflationary period. The cause which our government has never really addressed and which continues to disingenuously ignore, is the Federal Reserve Board’s mismanagement of the money supply.

Economics, by definition, the study of production, distribution and consumption of goods and services, must by its nature also involve the study of money. As the substitution for barter, money provides the means for all that the study of economics involves to occur. In fact, where barter is not used, it is the basic required ingredient (catalyst, if you will) for all else that occurs. Milton Friedman, best known for his monetary theory, sent to me in correspondence I had with him in the 1990s graphs providing empirical evidence that there was an approximate two-year delay between a change in the money supply and its attendant affect on the economy. He also has stated:

“I have long believed that the best thing you could do would be to abolish the Federal Reserve and replace it with a computer. We are not going to do that and therefore I am afraid we will continue to have to look forward to a situation in which you do have attempted micro-management on the basis of absolutely imperfect indicators, whether monetary aggregates, the interest rate spread, or whatever. … “in essence, a computer could determine the economy’s monetary base and consistently increase it by, say 3 percent annually, week after week, month after month, hopefully year after year. … Money is too important to be left to central bankers. … We do not need a central bank to have money. We had money before we had a central bank. … Banks could issue their own currencies exchangeable for something of value – perhaps gold.”

As long as the government attempts to address the effect rather than the cause by making our government larger and more intrusive on our liberties, our country will continue to experience extreme peaks and valleys in our economy and a burgeoning government bureaucracy that will become more and more intrusive in our lives. I feel sorry for what this will do to our children and grandchildren.

Ben Cerruti, Brentwood