A not uncommon reaction from central bank defenders in response to criticism is some form of an apology, arguing a lesser of two evils choice. Posing a counterfactual, they present a scenario, say the East Asian Crisis or subsequent Subprime Crisis, which it is then argued would have been much worse but for the interventions of the Federal Reserve. “Think how bad it would’ve been had the Fed not been there!” In fact, in virtually every case, one finds the Federal Reserve at or near the root cause(s) of the problem at hand. And though a complete catalog of all the Federal Reserve’s errors is...
