- The Washington Times - Friday, March 6, 2009

Asserting that capitalism corrupts, Daniel Gallington claims that “the economic power of the private sector, especially if unsupervised, is unable to prevent itself from exploiting whatever ways are found to take lots of easy money out of our economy in the short term, especially if our government allows it. And that is what happened” (“Lesson from Marx,” Commentary, Wednesday).

I offer a very different thesis: At the root of the problem is the power of the Federal Reserve to put lots of easy money into our economy - new money that creates asset bubbles and inflation and warps private-sector decision-making by distorting prices. And that is what happened.

Capitalism doesn’t corrupt - central banking does.


Chairman, Department of Economics

George Mason University

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