Tyler, Too: The Troubling Myth of Interest-Rate Cuts

Forward, January, 2002 by Tyler, Gus

Tyler, Gus Forward 01-04-2002 TYLER, TOO: The Troubling Myth of Interest-Rate Cuts On December 11 the Federal Reserve Board, under Alan Greenspan's direction, met again. It was the 11th time this year. And once more it cut the interest rate, this time down to 1.75%. It was the 11th time this year. Why has the Fed been cutting the interest rate? Because it believes that when the rate is cut, the economy will be revived.

But why has it cut the rate 11 times in a row? Because the first 10 interest-rate cuts did not do what they were supposed to do. Indeed, from the time the process began to the present the unemployment rate in the United States has doubled and the economy has moved from a "slowdown" to a formal "recession." So, in effect, the doctor prescribed...

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