Is the Fed Making the Crisis Worse? - John B. Taylor January 13, 2009

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Complete video at: http://fora.tv/2008/12/15/Uncommon_Knowledge_John_Taylor

Stanford economist John B. Taylor weighs the risks of the Federal Reserve increasing the U.S. money supply to stimulate the economy. Taylor argues that the real problem lies with financial institutions' unwillingness to lend to one another. "That's not going to be fixed by creating more money," he says.

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What are the lessons we learned -- and perhaps unlearned -- that permitted the American economy, once so convulsive, to grow in such a robust and sustained way for the last quarter of a century?

Economist John Taylor discusses today's financial crisis, which he labels the most "unusual" crisis since the Great Depression. He identifies a number of factors contributing to the crisis, but locates its origins in the monetary excesses of the Fed.

In outlining what the government should and should not do in response to the crisis, he concludes that it will be tragic if we forget all we have learned over the past two and a half decades about the importance of the private sector and the free market - Hoover Institution

John B. Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University and the Bowen H. and Janice Arthur McCoy Senior Fellow at the Hoover Institution. He formerly served as the director of the Stanford Institute for Economic Policy Research, where he is now a senior fellow, and he was founding director of Stanford's Introductory Economics Center.

Taylor's academic fields of expertise are macroeconomics, monetary economics, and international economics. He is known for his research on the foundations of modern monetary theory and policy, which has been applied by central banks and financial market analysts around the world. He has an active interest in public policy.

Taylor is currently a member of the California Governor's Council of Economic Advisors, where he also previously served from 1996 to 1998. In the past, he served as senior economist on the President's Council of Economic Advisers from 1976 to 1977, as a member of the President's Council of Economic Advisers from 1989 to 1991.

Peter M. Robinson is a research fellow at the Hoover Institution, where he writes about business and politics, edits Hoover's quarterly journal, the Hoover Digest, and hosts Hoover's television program, Uncommon Knowledge.