This is Jeff Deist, and you're listening to the Human Action Podcast. Ladies and gentlemen, welcome back once again to the Human Action Podcast. And we are sticking with our theme of money and banking, the Fed, that we've been talking about quite a bit lately. We recently had a show with Bob Murphy discussing this sordid phenomenon of negative interest rates. So this week we're speaking more generally about the Fed itself and about looking at some of the other perspectives. In other words, monetarists, supply ciders, Keynesians, et cetera, and how they view the Fed's machinations, how they view its balance sheet, how they view business cycles, and of course the Austrian response to that. And I thought there was nobody better for that task than our good friend, Dr. Murray Sabron, who is coming up on the end of a long teaching career at Ramapo College in New Jersey. He actually has a new book out, which he's just written in the last year, so called Why the Federal Reserve Sucks. It causes inflation, recessions, bubbles, and enriches the 1%. So Murray, let me start by saying it's a very subtle title of yours. Well, I think in this day and age, Jeff, you have to be edgy. And once you get people's attention, then you get into the details, you get into the reasoning, you get it behind the logic, the facts of the book. And the book was written on sabbatical a couple of years ago, and it would have been published last year. But as you may remember, I ran for the U.S. Senate as a Libertarian Party candidate, so we put off the final touches of the book until this year, and it came out in July. And I'm hoping that it does what other great books in the Austrian tradition have done, namely Get a Wide Audience, so we can have a real full, honest debate about the nature of the Fed, and money, and banking, and all the things that our students have been writing about for the past 100 plus years. What's interesting about the book and others in its genre is that people like yourself are writing, I wouldn't say popular or pop books, but writing books intended for a lay audience about the Fed, about central banking generally, and if we think back, Murray, it was not long ago, really, before the 08 and 2012 campaigns of Ron Paul, before obviously the crash of 08. Nobody talked about the Fed, even amongst economists, even amongst monetary economists. The Fed was this sort of backwater issue. It wasn't very sexy or exciting, and it was considered this wonkish area of econ. And now people like you are writing books for just interested laypeople, and there's plenty of them. Well, the interesting thing is the book has been purchased by some of my neighbors, and they sent me some very nice compliments about how the book explains things in the ways that they can understand it, since they're not students of monetary policy or finance. And that's refreshing to know that you're written a book that is getting people's attention and explains things so that the average person can understand it. So then that's the goal of the book, is to reach a wider audience. And in the nation of 300 million plus, if we can get 1% of the people to read it, that's 3 million people, that would be a huge, huge success to start having that conversation nationally about why do we need a Fed in the first place, what's the origin of the Fed, who benefits from the Fed, how it conducts monetary policy, why we have all these bubbles over the past several decades. And I think that's something that, as an academic, we should have that discussion, because I'm not attacking anyone individually, I'm not making any personal attacks, I'm just saying, look at this institution, it's been around for more than 100 years, and look at the economy for the past 100 years. Obviously, the economy has grown by leaps and bounds, not because of the Fed, but I would say in spite of the Fed, because business has just taken the tools at its disposal with the great women and men entrepreneurs and created great businesses that improves our lives, but the Fed has created so much pain with the inflation and the depressions that we've had. And now, of course, everyone knows about the bubbles because we've had so many people live through them in the past 20-some odd years. And it's really now up to us, those of us who have been in academia to write things so the average individual can make sense of what's been going on. Well, I have to say, as one of those lay readers, I'm starting to suspect that professional economists have actually, intentionally or not, made things more complicated than they really are, and that's what I think is so great about this book. Now, you mentioned there's a lot of history in this book, there's a lot of background. That doesn't mean it's lengthy, boring chapters or anything like that. It moves at a very brisk pace.  I want to bring up something to start here that's a little more recent, and that is what a lot of our listeners understand is QE, the program by which the Fed purchased assets from banks and gave them bank reserves in return. Because of QE and other asset purchase programs, the Fed's balance sheet. Now, we call that base money, the monetary base, which consists of bank reserves and actual currency and circulation. That monetary base was only in the $800 billion around the time of the crash in 2008. It more than quadrupled to up over $4 trillion at the peak of that asset buying spree. So because bank reserves are not lent, these are simply reserves parked at the Fed that banks use to cover other requirements and to lend to one another. Because they're not lent out, people like Paul Krugman, Murray tell us, well, it doesn't matter. So what they're saying is effectively, as long as interest rates are low at least, that we could effectively recapitalize all of our nations and solvent banks back in the way. And trust me, some of them were insolvent. Think B of A buying countrywide and all that toxic mortgage debt. That we can just recapitalize the banks and there's no adverse effect. There's no pain ever comes from this. Well, see, this is where I think the Keynesians monitors and the supply starters who I point out in the book really missed what was going on in 2006 and 2007. With very few exceptions, the non-Austrians really missed the both. And so the point that Krugman makes is valid to the extent that as long as the banks don't lend out the excess cash that's been created by the Federal Reserve, things can be pretty copacetic. But once the Fed, I'm sorry, the banks increase their lending, that's the transmission mechanism that I learned when I read Rothbard and Hayek and Mises and Haslett back in the 1970s. The banks have to lend for the new money that the Fed creates to get into the economy to raise prices. That's what I wrote my dissertation on back in the 1970s. And so we see that flow of money going into loans, commercial industrial loans, which is one of the key indicators that Rothbard talks about in his writings. And as long as that is not increasing at a rapid rate, then inflation could be held down. But as I point out in the book, one of the reasons inflation has been kept down is that a lot of these dollars that have been created have gone overseas. Plus, you've had three phenomena that have really put a damper on price increases. And I call it the CWA, China, Walmart, and Amazon. Those three institutions, if you will, China has been selling us low-price goods. Walmart has been selling low-price goods. And Amazon, because of its huge size, has been keeping the competition at bay and keeping prices down. And so that's what I observe as a student of economics and finance and an observer of the American economy, that if you recall back in the 1970s, China was irrelevant, and so were most of the other foreign countries. And all the dollars that the Fed created in the 1970s stayed in America and we got the two bouts of double-digit inflation. So now we have sort of a safety valve for the dollars being created by going overseas. And so what you have is asset bubbles, the dot-com bubble and the housing bubble. And now some people have dubbed the everything bubble where real estate is incredibly inflated. Stocks are inflated, bonds are inflated, artwork is inflated.  So the question is, when will prices start to increase? And that's I think the $64,000 question that economists and others are trying to figure out. Well, thank you, China, Walmart and Amazon. Well, we should all send them a thank you note. Right, but the point is that central banks exert inflationary pressure on an economy while the natural progress of a healthy economy with increased productivity exerts deflationary pressures. Well, I'm glad you brought that up because I really became an Austrian economist back in the 1950s when I was a youngster, when color TVs first hit the market and I said to myself, our family couldn't afford to buy a color TV because they were very expensive back in the mid-1950s. I said, why would anyone buy a brand new product? We would wait till they start mass producing them and prices would come down. And so I already had instinctively the notion that prices will come down as productivity increases. And so that's exactly what's happened with TVs, computers and other high-tech items because that's the wonders of the free market and free enterprise is that it allows products that were only available to very wealthy people or wealthy people to be available to the masses. We saw this in automobiles. We saw this in air conditioning. We've seen it in so many products in my lifetime that, again, having the experience of longevity at this point, I tell students this and I think they get the message that lower prices, deflation, natural deflation is the natural order of things while inflation and higher prices, which the Fed wants. I mean, this is the mind-boggling thing about the Fed. It wants to have a 2% increase in the CPI where that is in the literature is beyond me. That was never in the literature anywhere until the Fed decided, well, we should have 2% inflation because that's going to grease the economy and make economic growth more doable. And this is the voodoo economics of the Federal Reserve is they take an idea and they make it into public policy, which has no basis in theory or experience because as a consumer, as you as Jeff as a consumer and all the people listening, I don't know anyone who goes into a store and is disappointed that prices are not 2% higher than they were a year ago. I mean, this is how crazy the Fed's policy is of trying to manage the money supply and interest rates and to try to give us 2% inflation. And of course, we should note to our listeners that this really is a Fed policy, an express policy of 2% inflation as a target of you. And this is something that the Fed ginned up on its own. This does not derive from the Federal Reserve Act or the congressional intent back in the 1910s or anywhere else. It's just something they came up with. Well, this is the thing about economists. I think they have too much time on their hands and they should be doing something to explain how the economy works to the general public, which of course they don't do. They just tell us how wonderfully a job they do by manipulating interest rates. And by the way, in the book, I went through the testimony of Bernanke and Greenspan while the dot-com bubble and the housing bubble were underway and in his testimony to the Congress in a semi-annual testimony, Bernanke says explicitly, we manipulate interest rates. I was floored when I read that because what CEO would be allowed to get away with quote, manipulating prices in his company or his industry? And so this is another example how the Fed is basically a law of unto itself in terms of the economy where they manipulate the most important price in the economy. That's the interest rate. But it is interesting that people are waking up to this. In other words, I think most Americans even today, as we're apparently getting more socialist, most Americans would object if we had some central planning board that sat around in Washington and decided how many fords were going to be produced next year and at what price they were going to be sold and where they were going to be distributed and what numbers and how much an auto worker would be paid. Most of us would say, no, no, no, the market can do that. But somehow when it comes to money, if you start saying, well, the Fed represents a gigantic central planning, Politburo of sorts, people don't necessarily go along. Well, this is the interesting thing. I was on Joe Piscopo's radio show several weeks ago and I made this point that this is monetary socialism and he let out a loud scream and we didn't pursue it because we didn't have that much time. But again, this is something that people don't understand that the Fed is a central planning institution and it tries to have good outcomes, low unemployment, low inflation, I'm sorry, low unemployment, low inflation and a robust economy. And it can achieve that on a sustainable basis because they don't have enough knowledge. This is what Hayek called the fatal conceit. They don't have the knowledge to do that because that's not the way the world works. And in my book, I take Murray Rothbard's little flow chart that he had in the case for 100% gold dollar and I put it on a page that describes how a free market economy works and I start all my courses with that to show students this is how the economy works and this is how finance is related to this and why we need a good financial system in order to have smooth operations between production and consumption and labor. And I think students really appreciate it because it distills the economy for them in a way that's easy to understand without having to have an econometric model. Well, I want to get back to this topic of deflation. I'm paraphrasing Jim Grant, the famous James Grant of Grant's Interestate Observer and he basically says that deflation represents the process of us getting richer and you mentioned your family when you were little those big huge wooden TV consoles probably cost $1,000 back in the 50s or something and so deflation is a particular boogeyman of almost all economists and all monetary theorists. Why is this? Why can't we not understand it? Well, I'm glad you brought that up because I think that this is the legacy of the Great Depression because in the early years of the Great Depression as you know the stock market declined 89% unemployment went to 25% and we had price collapses throughout the economy. So economists associate a Great Depression with deflation or deflation with a Great Depression so they will do anything to avoid deflation because they think that is going to bring down the economy and this is one of the points that we're going to be looking at at a symposium moderating October 17th and Misi's own Joe Salerno will be on the panel with a colleague of mine who worked at the Fed for many years and we'll be discussing about the lessons of the Great Depression and deflation versus the Federal Reserve's attempt to keep propping up prices. So again, the Great Depression to me in reading financial history and monetary history and economic history is one of the most important events of America that really changed the character of our government changed the nature of our government and changed policymakers' view regarding how the market should behave without their interference. They think that they're doing God's work if you will by manipulating interest rates and this is why the Great Depression is something that should be studied in every discipline because it has affected somebody in so many areas of our society whether it's employment, whether it's management whether it's government financing and so on and so forth. So I think the symposium that we're having October 17th and it'll be streamed live so hopefully everyone around the world will be able to watch it and it should be a very good provocative discussion about the Great Depression and Bernanke considered himself a great student of the Great Depression and he famously said to Milton Friedman on his 90th or 95th birthday that we're never going to allow deflation to happen again well that was the bad deflation because when you have a deflation like you had from 29 to 32 that can only take place after you had a bubble and so they didn't understand that it was the bubble that caused the deflation it wasn't the natural order of the free market. Well Maury we will put a link to that event to sign up or to watch it on our site with this podcast but it's interesting you talk about the history of the Depression which is so unknown in this country even amongst econ PhDs they go through their PhD programs without learning virtually anything about the history of economics but the one thing they do know about the Great Depression these 28 year old Ivy League economists at the Fed the one thing they do know is wrong which is that the Fed didn't do enough. Well this is why Rothbard's America's Great Depression which I again read early on in the 1970s when I first became introduced to Austrian economics was such an eye-opener because I was a history major and one of the things you learn when you study American history is that Hoover was a laissez-faire president he sat at his hands while the world was crumbling around him and Rothbard presents the evidence the historical facts the historical data to show that Hoover was one of the great interventionists of all time great not in the sense of good great in the sense of expansive that he in his 1932 the Republican nomination for reelection he said we could have done nothing but instead we used the arsenal of the federal government to attack the economy to make it better and he totally failed he humiliated in defeat by Roosevelt who we all know ran on a very fiscal conservative platform of balanced budgets lower spending and restoring the gold standard and of course he went 180 degrees when he got elected and so this is why history, economics and finance and philosophy are important subjects students can learn and then they can concentrate in some discipline that will give them a good career track but as far as a liberal arts background I think it's history, economics, finance and philosophy is something that the Mises Institute does extraordinarily well at the Mises University and if I had to do a curriculum for undergraduates across the country that's what I would suggest that if we really want to have students understand America, the economy ideas that have impact on the way our economy is structured our political system, we have to learn this stuff and that's why I developed the Financial History of the United States course because I incorporate a lot of the Austrian material and next week we're going over the Panic of 1819 and guess what the students are going to be reading, Rothbard's the Panic of 1819. Well I want to talk about economics today and most of us on the Austrian side of things think that the profession is enthralled to Keynesianism. Now sometimes Keynesianism and Keynes are two different things, sometimes his followers support things that perhaps he would not have supported but give us your take basically on this demand side Keynesian mania and how Keynesians view the Fed and bubbles. Yeah this is fascinating because again in the flow chart that Rothbard put together that I reproduced basically in my book, in order for us to be consumers we first have to be producers and the Keynesians have it just the opposite they think consumption drives the economy, when it's production that drives the economy as I explained to my students I can't be a consumer unless I first get a paycheck and what I produce is lectures for the Anisfield School of Business at Randall College in finance and financial history and so they have things upside down in terms of how the economy works and this is what's driven economic policy since World War II with the Full Employment Act of 1946 I think it was which put the federal government in the driver seat of trying to make sure we don't have another great depression and we have low unemployment and low inflation and a robust economy and they have failed miserably because of the demand side management of the economy when instead they don't appreciate free markets and free enterprise they don't believe the economy can work on its own in other words laissez-faire they really have this mental block that an economy is self-regulating and self-perpetuating they think that if you don't have the smart people on board in Washington or in Moscow or London or Paris that the economy will fall apart into a depression and this is one of the things that I address in the book not directly but sort of tangentially by pointing out the Federal Reserve is basically the demand side management of the economy that they're trying to prop up spending by flooding the economy with money keeping rates down so we buy houses we buy cars we go into debt and of course the debt is what's what's the 800 pound gorilla in this US economy. So how do Keynesians view bubbles and cycles? Well the interesting thing is when I did my research there were a few Keynesians that said that there was a bubble Dean Baker a Keynesian economist came up with the idea from his analysis that there was a bubble Krugman didn't think there was a bubble Bernanke didn't think there was a bubble in fact most Fed economists didn't think it was a bubble I cite two studies done by Fed economists who said that there was no dot-com bubble and there was no housing bubble they were spectacularly developed because they were using econometrics to figure out that housing prices were doing okay that if there was a housing bubble it would be localized Bernanke said that in his testimony that housing prices rising in a particular region is not symptomatic of a systemic problem in the US economy and so the Keynesians because prices were going up and housing demand was going up they said this is listen this is what economic policy does it makes a quote a robust economy when they don't understand or appreciate the underlying austrian insights that once you lower interest rates by the Fed or any central monetary authority you're going to get an unsustainable economy and that's what the bubbles were that we saw back to back and now we've seen the third one unfold before our eyes well give us your take on monetarist Milton Friedman et al and their view of the Fed and bubbles well again using some of Friedman's more popular work he basically wanted to keep prices stable now I was introduced to Friedman when I was a college student reading his column in news week and as a college student who wasn't majoring in economics that sort of made sense to me stable prices are better than rising prices and then I sort of became involved with the Austrian school and they were talking about prices slowly falling as productivity increases and that made a lot more sense to me because that was my initial reaction to prices back in the 1950s when color TV came out and so the monitor's goal is to just keep pumping money in to keep prices stable and the monetarist have the strange view that interest rates don't matter which is a very bizarre view about about capital and money and I think the monetarist probably have the weakest view of capital that I've seen that they have no concept of how capital drives the economy it's all about monetary aggregates and keeping prices stable so it's a very macro view of the economy on the other hand monetarists are good on some of the micro issues like rent control and the draft and things like that when it comes to money I think was it Friedman I think worth basically said there are some economists that concentrate on the areas that they're worst knowledgeable about and that's a good example of Friedman and money and supply starters as well I mean the supply starters were specifically wrong in 2006 and 2007 when they said there's no bubble in the economy everything is great because the economy is robust and so again the monetarist and the supply starters were terribly wrong while a few Keynesians got it right back in 2005 and 2006 but of course a lot of people view monetarists and supply starters as quote-unquote free market schools and so it's free market with a giant asterisk except in money well this is the litmus test I think you hit it around the head Jeff if you believe in free markets then why isn't money supplied by the free market in other words here's a valuable commodity a valuable asset just like any other commodity or asset in the economy that should be provided by entrepreneurs and this is where I think separates the Austrians from the traditional conventional view of the money is that most economists are monetary socialists there's no other way to describe it they believe money should be a responsibility of government and this is something that we have to battle lock, stock and barrel because they are taking the country down a path that doesn't end very well and when I started to learn this so many decades ago and I was writing about this in the late 70s early 80s when I was a staff economist for the American Institute of Economic Research in Great Barrington and we were very close to a total meltdown as the dollar was collapsing in world financial markets I said what is it going to take for us to really have the big collapse like they had in Germany that were seeing now in Venezuela, Argentina and other countries and the answer that I came up with that makes sense to me is as long as the dollar is accepted around the world as the world's reserve currency I think we can muddle along the question is when will the dollar no longer be demanded around the world that's when I think it's checkmate so I think the foreign exchange value of the dollar is the key as to whether we have a total implosion of our financial system that is based upon fiat money and of course a lot of that worldwide support for the dollar is imposed at least implicitly by force right it's not that the rest of the world thinks that our fiscal houses in order or that our monetary policy is sparkling and stellar it's that we're the 800 pound gorilla and we have a vast military so there's sort of an implied threat of force that keeps the dollar as the world's reserve currency well interesting enough next week is the 70th anniversary of the communist takeover of China and one of the books I read when I was doing my dissertation was the history of the Chinese hyperinflation of the late 40s that's why China was a communist because the peasants were getting wiped out their savings were getting wiped out by the hyperinflation and Mao came along saying we're going to end the hyperinflation so you could have a decent living standard and he took over China but it was hyperinflation that led to the communist revolution as it was the hyperinflation in Germany in the 1920s that eventually led to Hitler in Germany and of course you had hyperinflation in Russia which helped get the communist in power in 1917 so we have examples of how military destruction leads to horrible political outcomes in three major countries around the world Russia China and Germany so again whether we will enter that realm is something that of course we don't want to see because it would be horrible to have wheeled barrels full of money having to go to the store but these are the lessons of history that I learned over the past several decades that I've been writing about and hopefully I'll continue to write about it as my career ends as an academic, a full-time academic and I'll have more time to write more articles from my blog and get on the radio and express these opinions about why we don't need to have a central authority manipulating interest rates and money and credit. But you know when I hear you talk about history and hyperinflations and bad political outcomes it makes me think that history is far more important than economics. Well this is why I attracted me to be a history major again growing up in the 1950s being a son of Holocaust survivors who came to America 70 years ago and when I was an infant and I started reading about Germany and hyperinflation and all the events leading up to Hitler's takeover in 1933 I said if we don't learn history we are really doomed to repeat it as Santiago said and so that's why I want students to learn history. I mean it's good that they're learning business disciplines and being business students but they really need to know history because that explains a lot that's what's going on here today and in fact at the end of October I'll be giving the annual receding memorial lecture that will incorporate a lot of the things we talked about today and my prognostications for the next 70 years since it's 70 years and so I came to America with my older brother and parents I want to talk about what America is going to look like over the next 70 years if we don't get our house in order right now. You were born in the US or no? No I was born in West Germany right after World War II my parents were in Poland they're the only ones in their families to survive the Holocaust they decided to leave Poland in 1946 and my mother was pregnant with me and I was born in December of 1946 and then they decided to come to America because my father's first cousin came to America earlier who also obviously survived the Holocaust and my father had a great aunt who raised his mother in America then she went back to Poland after the turn of the century got married there and never came back to America and perished during the war so I was born in West Germany I don't remember it I was two years old two and a half years old when we came to America but again growing up without grandparents aunts or uncles or cousins it gives me a deep appreciation of peace let's put it that way and that's why I became a hardcore libertarian in the early 70s when I started reading Rothbard and the other libertarians about the importance of peace and sound money and individual liberty and all the things that make life worth living of having the domestic tranquility and peace and commerce with the rest of the world so I try to incorporate that in my previous political campaigns in New Jersey but the people here in New Jersey are so enamored with the republicans and democrats or at least the republicans that are sort of very establishment types they don't want to hear they rejected the message of liberty and so I figured the best route for me to make the ideas more valuable if you will or more attendable to people is to write essays which the local papers were publishing my letters to the editor and op-eds and the editor really likes what I have to say he paid me I think sort of a compliment he says for an academic you really write well so that was refreshing when you get a professional editor to give you that sort of kudos he doesn't edit any of my work and then he publishes I didn't know all of that back story but I got to say in person you come across like a 45 year old guy you just come across like a very young guy so take that for what it's worth well the thing is my father taught me a very important thing study and work at something that you love to do and be a professional because he worked in the sheet metal shop he helped build an airport before it was called Kennedy Airport Idlewild Airport and then he bought his own cab and was a cab driver for two decades so he saw a lot as a cab driver in New York City and he wanted his sons to become professionals that's what I think the dream of every immigrant after World War II was to have their children become professionals and live the American dream well speaking of professionals you know there's an interesting point that you make in your book that we talk about a lot here at the Mises Institute that I'd like you to elaborate on which is how the Fed drives inequality the Fed helps the rich get richer so give us your explanation of this phenomenon well it's very simple in fact I quote Stanley Druckenmiller a multi-billionaire hedge fund manager who has a fantastic track record and he was quoted on CNBC saying we the one percenters love the Fed because it drives up asset prices stocks bonds artwork real estate and so they understand it whose father ironically was a great supporter of the gold standard congressman Howard Buffett and Buffett turned to the dark side becoming a full-fledged Keynesian supporter of the Fed which of course has made it possible for him to become a multi-multi-multi-billionaire so again if the people on the left are concerned about inequality they would be talking about the Fed like the Austrians have been talking about the Fed for so many decades but for some reason they have a blind spot also toward the Fed I don't know if it's just ignorance or they're just intimidated by criticizing an institution that is considered necessary for the US economy but all the hedge fund managers who are super wealthy understand that the Fed drives asset prices and that's not too hard to understand because as more money is created people have the resources to bid off the prices of various assets so this is economics 101 or just common sense that if you have an institution where wealthy people are first in line to get the money like they are on Wall Street because the banks have the excess cash so they can make loans to Wall Street and then people can buy in margin and driving down interest rates increases asset values so the insiders the financial insiders the really smart financial people know that the Fed is indispensable for them to become billionaires and multi-billionaires I mean and if we had a free market economy you wouldn't have disparity of wealth that's my take on reading economics and finance that asset prices going through the roof are the result of Fed creation of money so what do you think of some of these proposals around the Fed there are people out there who maybe agree with us more or less they think the Fed is largely maligned and not benign but they also think that politically or just pragmatically getting rid of the Fed is a non-starter having pure market money or competition in money is a non-starter so they tried out some of these ideas surrounding a rules-based Fed that if we can just tinker with things there's the Taylor rule named after John Taylor out at Stanford there's NGDP targeting which is cheer led by among others Scott Sumner at George Mason University do you have any thoughts or any opinions about some of these Fed rule proposals yeah this is just another example of how they think they are smarter than the market regarding interest rates and again Hayek really nailed it with this is the fatal conceit of allowing instead of allowing markets to determine prices which is interesting all these people consider themselves free market economists they don't want a free market in interest rates which I think is really a tremendous blind spot by people who tout themselves as great defenders of free enterprise and free markets but the most important price in the economy they're willing to hand over to a central authority to manipulate and so again when I read all these proposals I'm scratching my head and I'm saying why is there such a disconnect between their support for the free enterprise system of fluctuating prices for goods and services when it comes to interest rates they think there has to be some special rule that the Fed can utilize to give us good outcomes and it's been a total failure and having been a Fed watcher now for what five decades it's getting worse and worse and worse because they the volatility in the financial markets is really stunning if you look at the ups and downs in the stock market and the bond market in the currency markets you never had this 60 years ago prices were pretty stable they weren't as volatile as they are today I mean the prices to go up 1-2% on a daily basis in the financial markets is just an example of the failure of the Fed to give us a framework in which people can plan without having to worry about what interest rates are going to be over the next 5-10 years because who knows what interest rates are going to be over the 5-10 years they could be permanently low which would be an incredible achievement but they could be spiking like they did in the 1970s so again how do you plan for the future if you're an entrepreneur and you're trying to figure out what your cost of capital would be well ladies and gentlemen I want to recommend to you again why the Federal Reserve sucks it causes inflation, recessions, bubbles and enriches the 1% this is the new book from our guest Murray Saber it's available at our website mises.org and our bookstore it's also available via Amazon Murray I got to thank you you're coming up on the end of a 35-year career at Ramapo College I think even more importantly more impressively you have married to your wife Florence for 50 years which is really something that I should warm all of our hearts I'll be seeing you this weekend in New York at an event and I want to thank you for your time today well thanks Jeff I appreciate it and all the great work that you do I think without the Mises we would be really in deep trouble you're reaching hundreds of thousands of millions of people in the United States and around the world and that's why I've been a supporter of the Institute since it was first created by Lou Rockwell well thanks so much Murray


Concerted by the DuPont Company. The Knight William Bendick stars in a heartwarming drama of a soldier with a problem. Bernadine, I love you. I'm the cavalcade of America, sponsored by the DuPont Company. Maker of better things for better living through chemistry. Better things that include DuPont Nylon, DuPont Cellophane, DuPont Classic. Tonight we bring you an original story, one that's full of humor and warmth. It's the story of a paratrooper who had a problem, and of how the Red Cross helped him out. We think it illustrates unusually well one of the human little odd jobs which the Red Cross does for the fighters in the line and for the lonesome servicemen behind the line. Warm as a handclasp and sentimental as young love is our play. Bernadine, I love you, starring William Bendick as Private Irving Breckenridge on the DuPont Cavalcade. I'm a paratrooper. Paratroopers are a tough, hard-boiled lot, believe me. They have to be that part of their equipment, just as much as their boats and guns and parachutes. But in second squad of my platoon is a boy who doesn't seem to be that way at all. Tough, yes, when it comes to fighting. But this boy Irving Breckenridge has something about him, a friendliness that makes him seem sometimes soft.  And yet he's the best fighting man in the outfit. I'm Irving's Lieutenant. The first time I really noticed Irving was one day when we were circling over a field in North Africa. The boys were lined up waiting for my signal to jump. It was a bad-cost wind that could make trouble for us. Suddenly, the wind started rushing in the open door. I could feel the tension rising.  The men started shifting anxiety. Hey Lieutenant, somebody wants to let the window open. There's a little dress right in the back of my neck. That broke the tension. A minute later we jumped. I think it was easier for all of us, because of Irving. Well, that was Irving in North Africa. Two nights later we made that first terrible jump into Sicily. We fought three days all around the clock. The men, it was quiet. We were resting in a barn. Where's the rest of the guys? Where's Boobo? Boobo's dead. The medic just told me. Where's Bernie? Bernie's dead. Yeah? Man, it sure does rain around here. Anybody see George? You ain't seeing George no more.  As long as I'm breathing, I might as well get some sweet noise. They got George, huh? I sat at the night. George was all right, he was. That's the friend I had in the whole army. Gonna miss that boy. Look, will that chill that thing nobody fears left? Irving, you sure do play mighty footing. How'd you ever learn that, pony? Well, he's too big, so I can't sweep a gal over by dancing. My hands are too big, so I can't trim a romantic thing on a guitar. My mouth's too big, too, but just right for blowing a harmonica. So I done it. Hey, how about show us that picture of your wife, Irving? No, sir. She's so pretty, one of you wolves is able to follow me back home. How do you like that, sir? She's staying right where she belongs, in my pocket. Look at that rain. Dog gone, it sure does rain around here. Blue his way, clear up the Italian boot. No matter how tough it got, he was as good-natured and comfortable to be with as a safe and odd dog. Being his lieutenant, I wasn't as familiar with him as the men were until the night in England. I was writing a letter in my barracks when he knocked and came in. Good evening, Breckenridge. It's on your mind. Well, I'd been wanting to ask you a favor, sir, an out-and-out favor. Sit down. I'm in a quandary, lieutenant. About what?  She's so beautiful that I wake up at night sometimes. I can't believe it. She's just... Yeah, I heard. Watch your trouble. Well, I want to write her a letter. You see, George got killed in Sicily and George used to write my letters for me. Oh? Yeah, you see, I can't write, can't spell nothing. You can't write? Well, my fingers are as big as rake handles and my writing ain't... Well, it's like some old chicken wrote it. So when George, he died, well, sir, it went in my hand writing. Does she think you were writing a letter she got? Oh, yeah, she did. She's a very high-class gal. Her father, he owns the big service station down home, and George, he had a high-class hand writing. Yeah, well, I'll write about it for you. She'll notice the difference. Oh, no, sir, you're writing much pretty much like George, isn't she? Anyway, I could tell her I sprained my finger so that my writing changed a little. So, could I dictate a letter to you? I brought a paper and paper. Yeah, all right. Give it here. What's her name? Start off, uh, Dear Bernadine. Dear Bernadine. What's her name? Well, is that all? Don't you want to say, my dear Bernadine, or something more? Like, darling, or...? Well, that was the way George always started us, so we'd better keep it that way. All right. What next? Well, dear Bernadine, as I was telling you before, I'm now in Mary, England, and it sure isn't nothing like home. They say the people here talk the same language as us, but I can tell you it's strictly baloney. They all sound like they had coals in their heads, which may be the case with the climate they got, which is not for the ride home apart. How much is that, sir? About half a page. Well, finish up like this. In case you've been wondering, I'm still healthy as a hog and still getting a big bang out of all this foreign travel. As they say, it's broadening. Well, take care of yourself and don't let anyone give you no wooden nickels. You're truly Irving. Hello? Well, sure, I guess that's all. Well, look, you want to tell her you love her? Oh, no, I couldn't say that. Why not? You do love her, don't you? Oh, sure, but I can't say nothing so personal.  All right, then I'll put it in and you don't have to say it to me at all. Oh, no, no, sir, don't put it in place. You see, she's liable to fight out someday that I dictated these letters and she's going to get awfully stood up because I love you with a stranger listening. I don't know you well enough to tell it. I'll save the real stuff for that old hammock on the front porch. Now, what you're going to know, this will be the toughest, biggest job in the history of this division. I can't tell you when we're taking off, but we're beginning today a period of hard training for that job. All furloughs are canceled. Your first exercise will be a 40 mile march with a full pack over Hillary country. All right, check your pack. The boat does rain around here. Don't bend over, Harry. It's hard to walk on that way. I ain't bending over. I just got shorter. My feet fell off a mile back. Hey, where's Ivy? Hey, Ivy, how about blowing us a song, huh? Yeah, come on, Earl. Blow that thing, freckin' rich. Johnny comes watching home. Come on. Hey. I ain't got it in me. It's a matter of problem. I ain't right away out of your way. You're sick. I'm sick, all right. I never stopped you before. Go on, play. Hey, hello, will you? I'm blue. I just commenced over. I apologize, Lieutenant. Yeah, what for? For not having you write my letters anymore. I didn't want you to feel that I was dissatisfied with the way you did, and I come to thank you for everything. That's all right. Why are you just stationary? I, uh... I'm not writing any more letters. All right, what happened? Well... Sir, do you know anything about that red cross father that's got his office over at e-backs? Yeah, he seems nice enough. Look, if you want to get anything off your chest, I'll be glad to help you if I can. I kind of think I'd better go over and see him. I might as well just go ahead and see him. And Breckenridge. Uh, yes, sir. Whatever it is, whatever it is, I wish you'd get your mind off of it. Even I can pretty sloppy lately.  You seem a million miles away. Oh, yes, sir. I'll go and see the man. You're all right, sir. I'm getting terribly forgetful. There's nothing I can do, Breckenridge, if you won't tell me the whole story. The red cross is pretty good, but it can't read your mind. I just couldn't stand it if you're told anybody does. All right, now alert, fellow. In civilian life, I was the head of a settlement house. Oh, is that so? Yeah. So I didn't have to come 3,000 miles across the ocean to get there. Now what is it? Well, like I said, she's very beautiful. Well, I'm just a plain old kind of a fellow myself, so I kind of worry, you know. Pretty gal like that, don't like to sit home for two years doing nothing. The thing is that I've been writing her every other day all the time I've been going, but I ain't got a letter from her and it's over five months now, sir. Nothing at all? Not a female, not an airmail, nothing. Well, maybe she's sick. If she was, I don't see why she wouldn't write and say so. How long have you married, Breckenridge? Well, we got hitched about two weeks before I left. That's why I worry. She never had much of a chance to know what she drew. She loves you, though. She married me. The thing is, we're going into a big push in a couple of days tonight. Well, I can't get my mind on my work. You can't go jumping out of the airplane to be thinking about something else. You can't do it for very long before you ain't thinking of nothing at all. And forever. All right. We'll go to work on it then. Well, how are you going about it? Well, the Red Cross and the States will send somebody to a house, talk it over, find out what the situation is. The lieutenant ain't going to know about this. Is he running the mess?  All right, because I dictated something. Well, a lot of letters and I'm going to look mighty silly if they find out she's been lighting somebody's cigars with them. Well, I don't think she's been doing that at all. You really don't? No, she probably got lazy, that's all. Put off writing. You know, may forget over mistakes how much a son needs a letter. You go back to your work and forget about it. I'll have some news for you as fast as I can and I'll lay your bed. It's good news. Oh, man, you do encourage me. You really do.  Look at that picture. Ain't that the prettiest guy you ever saw? Hey, she's a knockout. Peaches and cream, huh? Yeah. And I sure do hope she creates... You're listening to William Bendix, his private Irving Breckenridge in Bernadine, I Love You, on the Cable Cade of America, sponsored by the DuPont Company of Wilmington, Delaware. Irving Breckenridge, a paratrooper, getting ready for a dangerous jump into enemy territory, has asked the Red Cross to find out why his wife has not written to him in five months. As our play continues, the instructor is briefing his men in preparation for their jump into Germany. All right now, everybody. The German for what is the route to Cologne is... Repeat it now. That's pretty good. All right, I'm going to call on you now. See you. Are you over there, Breckenridge? Come on, get up, I need you. Oh, yes, sir. What's the German way of saying what is the route to Cologne? Uh... Go ahead, German. Be calm. Be calm. Um, I'm sorry, sir. I don't guess I know. Well, look, boy, you better learn it. Your life may depend on knowing those words. You realize that? Oh, yes, sir. I'll learn it. All right. Take five, everybody. Maybe you're tired. Breckenridge? Yes, sir. The Red Cross fellow wants to see you. He's over there with the door. Oh, thanks, sir. Thanks. Before you go, I was just checking everybody's gear while you're entrenching, too. My... Oh. Well, I guess I must have misplaced it, sir. Yeah. Now, look here. You want to pull yourself together, or aren't you? Oh, I am, sir. Yes, sir. I'm just... Breckenridge? Oh, yes, I was just going over to you. Did you hear anything? No, but they sent word the Red Cross is working on it in the state. So, you buck up now and everything will be ironed out before you know it. Just leave it to me and forget about it now. Oh, okay. I just like to know. Even if she was sick, I'm sure she's right. Is that the trouble, Breckenridge? Oh, yes, sir. She ain't ruled for five, but nearly six months now. I meant to tell you. Well, I guess you know why she didn't write, don't you? No, sir, I don't. Ten to one of those letters you keep sending her. How do you figure that? She doesn't know whether or not you love her. Well, she's got to know. Don't be so sure. You wrote her letters. You might just as well write your Aunt Minnie. You might think you're just trying to let her down easy. How could she think you think like that? Why don't you send her a letter and straight out say, Bernardine, I love you. All right. I can't. If I was writing it myself, I could do it, but I can't dictate a thing like that. It's too personal. All right, then. Dictate it to the Red Cross. She won't get mad if she finds out she's dictated it to this gentleman. The Red Cross is, well, it's personal. That's right. I've written letters for quite a few men. I don't know. I couldn't. He ain't a real friend, you know? Anyway, his handwriting's different from yours. I can't go switching on different kinds of handwriting every week, you know? All right, then. Dictate it to him and he'll tell it to me and I'll write it.  Yeah, but that way he's really spreading it around, sir. I'll just carry on till I hear from her. I'll get you where just as soon as it comes. Meanwhile, just forget it. Leave it to me. I'll try, sir. Why don't you limber up on that harmonic and play as a good tune? Oh, no, sir. My mouth's willing, but if you went in with a magnifying glass, you couldn't find a good tune left in my heart. The old man was in his office. Yeah? Okay. Power shoot, Breckenridge? Well, just it is it, that's it. You tired of living? Oh. Oh, I'm terribly sorry, sir. I'll repack it. I guess I wasn't... Oh, I guess you weren't. If you'd jumped for this shoot, you'd have been dead. I don't think I'm looking out of secret if I tell you we're flying for Germany in a few hours. How long do you think you're going to last with a job like this? All right. I can't help it, sir. I got a letter this morning. Yeah. That's all. What'd you say? She wants a divorce. I can't hold myself together, sir. Well, come on. No, I don't know what I'm fighting for if I can't come back to her. I swear, she's just everything I ever had in the world. Well, go into the orderly room. There's somebody there waiting for you. Ready? Yes, sir. Please, sir. I don't want to leave the house. I'll be all right. I just... Go ahead, then. Yes, sir. Oh, it's you, sir. Yeah. Sit down, Breckenridge. I guess the Red Cross better forget about old Breckenridge, sir. I just got a letter this morning. I know. I got a report on it. I look here, boy.  Now, forget about this. I'm also bad at forgetting a thing like that, too, but I'm trying. I'm trying. Try it so hard. I can't think of nothing else. Why don't you give me a chance? Just leave it all to us, because we haven't given up. We've got somebody at her house talking the thing over with it. All right. Don't get talking. It's going to do much good, sir. Well, I was known as a woman. No, she's just got sick and tired of hanging around waiting her. How do I know? Maybe she didn't do much hanging around at all. No, wait a minute. Oh, that's all right. That's all of good she was. And maybe it don't matter what she does with herself or what I do with myself. Just let her... Now, stay out of it. That's all right. Just wait a minute. You're busy out here. But all she's done since she left is sit around waiting for you. She doesn't understand the meaning of the war. All right. I guess she doesn't. We're trying to explain two things to her. Now, when you get up there tomorrow night, you're going to think about your business and leave everything else to me. You got that? Oh, sure. Try it, sir. I'll be jumping with these second battalions. So if I get any news, I'll try to find you. Okay, sir. I'm much obliged to you, but... I'm afraid old Breckenridge is going to be the biggest failure the Red Cross ever had. We were flying over France toward Germany. There was no moon, big shoulders of clouds, dark, dark night. It was two o'clock with the radium face of my watch. I looked down the length of the plane. The two rows of men on either side of the plane were asleep. They were so bundled up front and back they looked like dwarfs. One of them moved. I looked closer. It was Breckenridge, the only one in the plane awake. I walked over to him, embracing myself on the overhead cable that runs the length of the plane. You still got your mind on her, Breckenridge? I can't help it. Don't worry about me, sir. I can't worry about you anymore. You're on your own now. Snap out of it. All right. Right side on your feet. Right side. All right now, hook up to the cable. Snap it out. Look, I'm over. Careful. Careful now. Call out my number. What's wrong? Okay. I'm 11 okay. I'm okay. I'm okay. I'm okay. I'm okay. I'm okay. I'm okay. I'm okay. I'm okay. Irving was in the middle of the line so I couldn't see you. We're getting Germany now, so think, think. All right. Open the door, Murray. All right, sir. Okay. Step up. You're thinking now. You're thinking. Step up. The lead man with both sides in the open doorway. I started my watch and looked out but it was dark out there. Bitch dark. I grabbed the leg of the lead man. All right. Go. Go. Thanks. Go. Thanks. Wait a minute, sir. Wait. He hasn't got his line hooked up, sir. Who? Rigger and Richard. Oh, you hooked that line.  Yes. All right now. Go. Thanks. All right here, sir. All right. Take three men and crawl out there behind us here. Don will be coming up in a few minutes. See what you can see. I'd like to go alone, sir. Who's that? Breckenridge. I'd be much obliged if I could go alone. Are you aiming at me? Can I end it all? No, sir. Go along with your drive for that. You know it used to be.  Target coming over, sir. And we're so, we're so slow that they're jumping right on the top of us. All right, Harry. Get moving. All right. Let's go, Orman. Boy, it sure does rain around. Wait a minute. Lieutenant, can we wait just one minute? You better stay behind Breckenridge. Get somebody to take a place, Harry. I'm the best scout in this outfit, sir. You're no good to me, boy. I want a man to go out there and try to get back with some information. I'll get back, sir. I'll rip you out of my mind. I'm trying, sir. I don't know. You better get somebody else, Harry. There's a Lieutenant, sir. Oh, Lieutenant. So the Red Cross jumps into the second battalion now, huh? I'm looking for... Oh, here he is. I got a message from the state for you, Irving. Me? Yeah. Here it is. It's too dark for you to read, but it's from our office and it's about your wife. My wife? Yeah. She says it's all a misunderstanding. Send you her love. And there are letters on the way. Misunder... How could you misunderstand me? I don't get it. It's just like I said. You wrote her all those letters, but she didn't know where she stood. Well... Yeah. Well, let me know. All right. Team up with Harry now and get going. Yes, sir. Just let me... Can I send a message back? What do you want to say? Hurry up. Well, just say... Dear Bernadine, I guess that's enough. Just say... Dear Bernadine, I love you. Dear Bernadine, I love you. Yeah. I guess she won't mind if it's only the Red Cross. Irving, let's go. Yeah, okay, Harry. Go on, let's go. Thanks a lot. Say Harry. Harry, you know something? What? It sure does rain around here.  Your portrayal of Private Breckenridge has reminded us all again what a welcome responsibility it should be to all of us to support the Red Cross with our generous contribution. This week on the DuPont Cavalcade, we bring you the story of how simple space and poetic imaginations stirred seven sturdy brothers to persevere until they had encompassed the last and one of the richest of America's natural frontiers. Our play next week is called The Seven Iron Men. For these seven men who bore the name of Merritt, with the men who discovered a mountain of virtually pure iron, up in northern Minnesota's Nassabi Mountain Range, Walter Brennan and Richard Hawke will be on hand as our stars. Be with us next week to hear these two fine actors in The Seven Iron Men. The music for tonight's Cavalcade was composed and conducted by Robert Armester. Our play was written by Arthur Miller and was based on materials supplied by the American Red Cross. This is Gain Whitman inviting you to listen next week to The Seven Iron Men starring Walter Brennan and Richard Hawke on The Cavalcade of America brought to you by the DuPont Company of Wilmington, Delaware.