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Capitalism vs. Central Banking

This letter of mine is published in the March 6th edition of the Washington Times:

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