Alexander W. Salter

"Many of the public policies that shackle the financial sector are designed to do so, because they help governments accomplish some other political objective. Engaging these political considerations, and how they impinge on banking and finance, is critical if we want to understand the history of monetary institutions, especially in the United States." ~ Alexander W. Salter

"Discretionary central banking creates bad incentives. To overcome bad incentives, we must take away the discretion. The Fed, so long as it exists, should follow a rule." ~ Alexander W. Salter

"You need to make some truly heroic assumptions in order for discretionary monetary policy to outperform rule-bound policy. Rarely do any of those assumptions hold. Never do they all hold. If we want a well-functioning central bank, the best we can do is to have rules." ~ Alexander W. Salter

"In terms of incentives, politicians can’t meddle, and central bankers can’t distribute unnecessary largesse, if monetary policy is constrained by a rule. Given that the Fed exists, and isn’t going anywhere soon, the best course of action is to ditch the 'discretion' part of 'constrained discretion.'" ~ Alexander W. Salter

"The whole point of a central bank is competently administering monetary policy. Right now, the Fed is failing at this basic task." ~ Alexander W. Salter

"Regardless of what we think of these traditions and practices, we cannot comprehend the history and development of American institutions without reference to them. To understand money, we must understand the entire institutional chain: from money to banking and finance, to law and politics, to the ultimate sources of social authority. The story of money in America is itself a chapter in the story of ordered liberty in America." ~ Alexander W. Salter

"Provided there is widespread social respect and protection for the institution of private property, we can have both markets and money, and the material bounties they create. But if we fiddle with markets and money, for example by conducting misguided political experiments, we jeopardize the very roots of our economic well-being." ~ Alexander W. Salter

"In ancient times, mankind extended the division of labor across tribes, turning enemies into friends. Later came trade across national boundaries, with similar largely peaceful effects. Now, humans are prepared to extend it still further: into the final frontier. Doux commerce is coming to the stars. NASA just made a 'giant leap for mankind.' Everyone who cares about human wealth and welfare should heartily thank them." ~ Alexander W. Salter & David R. Henderson

"Money makes possible an incredible amount of interpersonal coordination in the market. Rules of private property and contract, of various kinds, predate money. But widespread market integration and economic growth only result when there is a critical mass of people in a single commercial network linked by money." ~ Alexander W. Salter

"When it comes to the gold standard, the experts have spent too much time reading their textbooks and not enough time studying actual history. Empirical questions require empirical answers, and no amount of armchair theorizing can settle how gold stacks up to fiat money. On this, Dr. Shelton is right and the commentariat wrong." ~ Alexander W. Salter