Tuesday, July 3, 2012

This Is Herman Cain 3

In my latest reading of This Is Herman Cain, Herman Cain talked about how he saved Godfather's Pizza from bankruptcy as President of Godfather's (essentially, he highlighted to the public what Godfather's was known for----it's quality----rather than trying to be like Domino's, which was known more for its delivery), how he and a friend bought Godfather's from Pillsbury (with the help of loans), and how Herman Cain challenged President Bill Clinton in a forum about Clinton's health care plan and the cost that Cain felt it would impose on restaurant owners.

What I want to highlight in this post, though, is Cain's discussion of the Federal Reserve.  Cain is unapologetic about the fact that he worked for the Federal Reserve, and he does not agree with the Republican Presidential candidates who want to abolish it (though he says that he does not care if it's audited).  Cain supports the Federal Reserve because he believes that it regulates the money supply, and he does not think that the money supply in the U.S. and the world would self-regulate without the Federal Reserve.  At the same time, Cain believes that the Federal Reserve should be reformed because it over-extends itself----as (for example) it seeks to manage unemployment.  Cain states on page 84 that "you cannot manage unemployment, price stability, and our currency with one arrow, and they had multiple targets but only one arrow."

I can't say that I entirely understand Cain's argument, but he does appear to challenge an idea that is promulgated by such figures as Ron Paul: that the Federal Reserve causes inflation by printing a lot of money, and that the money supply will be restricted (and thus inflation will be low) without the Federal Reserve (or so I understand Paul's position).  Cain's point seems to be that the Federal Reserve controls the money supply, and that all bets are off were it not to exist.  Ron Paul probably believes that other things are necessary to control inflation besides the Federal Reserve, such as the gold standard.  I'll be reading his book, End the Fed, sometime in the future, so that will provide me with more of an opportunity to learn about his perspective.

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