Main Street Memories, Yet Again

George Selgin(I penned this summary version of my writings on the Fed ’s Great‐​Depression era attempts at Main Street lending in the hope that a respectable newspaper would publish it. Alas, those newspapers turned it down, as did some more dubious outlets.As my piece ’s content seems as pertinent than ever, and it at least has the virtue of being shorter than the others I’ve written on this topic, rather than consign it to the trash, I offer it here in the hope that someAlt ‐​Mreaders may see merit in it. My previous posts on the topic arehere andhere.)The U.S. economy is reeling from what may be its worst crisis ever. Firms are shutting down left and right. To stay open, the survivors —small ones especially—need credit, and plenty of it. Ordinary bankers can’t or won’t help them, so the Fed is riding to the rescue: for the first time ever, it will lend to all sorts of ordinary businesses.Today ’s news? Nope. The date was June, 1934, during the Great Depression. The Fed’s current business lending plan,first announced on March 23rd and now poised to start lending very soon, is actually its second try at business lending. Alas, that first attempt went badly, and a look at what went wrong suggests that history may soon be repeating itself.Unlike the Fed ’s new effort, which rests on its “Section 13(3)” lending authority, its Great Depression effort rested ona now ‐​defunct Federal Reserve Act provision known as Section 13...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs