The Free Market is Dead

How the Federal Reserve killed all semblance of capitalism.

(Image courtesy of Pexels.com)

Introduction

Unfettered markets have not been a reality in the past century. Or two centuries. Or even longer. We can go all the way back to the Panic of 1792 to see the US government helping out when things got really bad.

• Federal and local minimum wages
• Rent controls in certain cities
• The WPA, created under the New Deal
• Propping up the dairy industry by buying cheese
• Saving banks during the S&L Crisis
• Bailouts during the Great Recession

But there has always been restraint from the regulators, with the goal to minimize the solution necessary to prevent catastrophe. Unfortunately, the Federal Reserve has now gone stark raving mad with printing money, and the stock market has completely broken its tether to the economy at large.

Before we get into the current predicament, let’s review how we got here.

A History of Catastrophe

Prior to the Great Recession, the Federal Reserve’s biggest tool was manipulating the Federal Funds Rate, which is the interest rate for overnight transactions between banks. When a…