Central banks have too much authority over the economy. While their apparent aim is to stabilize and stimulate it, their actions have led to many problems. Without appealing to authority (especially not the authority of Milton Friedman, who was a monetarist and subscribed to the same Keynesian theories of government central banking and quantitative easing, just without the trickled down “stimulus packages”), I’m minded to quote certain philosophers on the difference between intention and result. The common proverb “the road to hell is paved with good intentions” comes to mind. Others include “one of the great mistakes is to judge policies and programs by their intentions rather than their results” and “concentrated power is not rendered harmless by the good intentions of those who create it (http://www.azquotes.com/quote/351907), both quotes from Milton Friedman and as Thomas Paine put it, “the greatest tyrannies are always perpetrated in the name of the noblest causes”. The problems haven’t come from the lack of action, but in fact from too much intervention in the market. Central banks lower the prime rate during recessions in order to incentivize borrowing and spending in the economy and increase them during expansions to discourage overspending. Higher interest rates also aim to combat natural inflation by keeping spending low. Moderate booms and busts are natural in an economy, when credit is sustainable, prices are low and debts are actually paid back but when central banks artificially lower interest rates below the market demand, they create “bubbles” by artificially growing the economy as more and more people borrow and spend recklessly. They build up a burden of debt for themselves, as there is less incentive to spend wisely and actually save for a positive long-term investment that can help them pay back their liabilities. The certain people who do in fact want loans for great investments like education and programs that will land them jobs they love, are burdened with high prices that the lenders and buyers are. It’s a tragedy that the North American youth find scapegoats for their most important problem, due to the lack of education at the high school level. This was evident before the housing crash of 2008 in the United States and it was one of the major reasons that the crash happened. Interest rates were lowered so that people could afford to mortgage and rich investors rented houses at artificially high mortgage rates because there was demand for it. The crash left many people homeless, as they had to default on mortgages. The economy collapsed and American companies suffered. Private banks that loaned money at low interest rates, caused by the central bank certainly suffered. Some went bankrupt, while others were bailed out by the government and were labeled “too big to fail”. In response to the crash, the automobile industry also got subsidies and bailouts because workers were losing jobs. In the end, it didn’t impact the ultra-rich and the politically connected as much. The people who got the short end of the stick were ordinary, hard working, upper-middle class, middle-class and lower class Americans who lost their jobs, houses, investments and businesses. That being said, the whole global economy was impacted by the crash because the United States is heavily involved in it. When looking at financial crashes, it’s important to look at the actions of respective central banks leading up to them. A country like the U.S. with more central bank influence has seen many more financial crashes than a country like Canada, despite both countries having similar amounts of regulation on the economy. The late 1800s saw many bank rushes where a lot of people would withdraw money at once. While the United States established the Federal Reserve, Canada’s private sector dealt with this problem much better. Since without the central bank, private banks could print their own currencies backed by assets, a private consortium of banks named The Canadian Bankers Association, established a fund to arrange takeovers of failing banks with notes. In a highly competitive and concentrated field, note holders and depositors had to ensure that they wouldn’t make losses that would impact the whole economy. In response to the fund, banks regulated each other to prevent unnecessarily high-risk activity.
In recent years however, central banks have become increasingly powerful. Negative interest rates are even being implemented to stimulate economies. They punish saving and encourage poor spending habits. It’s a recipe for disaster. With the excessive abuse of Keynesian economic policy on the rise in most governments worldwide, central banks constantly print more money to cover for deficits caused by overspending. This type of artificial inflation hurts the poorest members of society the most. The cost of living goes up due to higher prices and while a $3 increase on apples might not worry the rich, necessities are harder to buy for lower income families. Especially for the United States which has the highest debt in the world, a monetary collapse is very much possible. The two back to back bailouts under Bush and Obama after the 2008 collapse through quantitative easing and loans from the Federal Reserve have certainly contributed to this. Countries all over the world are experiencing this problem and the global economy is being punished.
The status quo is alive and well, but change takes time and action. Activists are rallying around the central banks of their country and demand for more transparency and less market intervention. Civil disobedience and peaceful protests have been most prevalent near the Federal Reserve of the United States. A fine example of activism about this issue was seen in to former Congressman Ron Paul running for president. Auditing the central bank was one of his objectives. The central bank is a part of the government (while it is a private bank with it’s own interests given a monopoly on currency), so activists can rally around their respective parliament buildings and call for bills to be passed in favour of those changes. Parliamentarians aren’t the most trustworthy or competent of people, but calling, lobbying and demanding for them to introduce or vote on new bills that limit central banks’ powers are possibilities (while not ones that have shown to work over time). All those things aside, the best thing to do is to raise awareness. Posting about it on the internet, specifically on SteemIt, writing for The Junior Economist or sending them to a more pro-market newspaper is a start, but talking face to face with people about the importance of this issue and its impacts is more effective. Conversations about the central bank are virtually nonresistant nowadays. Everyone has busy lifestyles and not enough people pay attention to what’s going on. A Stats Canada study in 2014 showed that only 15% of women and 22% of men could correctly answer five key financial literacy questions on a survey related to interest, inflation and risk diversification. The mainstream media doesn’t talk about this because it’s the status quo and it benefits the special interests that they serve. CBC and MSNBC are government subsidized, with Rachel Maddow practically shedding tears as Hillary Clinton was being investigated by the FBI, and The Sun in Canada have quite a large number of blatant conservatives and Harper mouthpieces. In the U.S., Green Party candidate Jill Stein has called for quantitative easing to pay for student loans, calling it a “magic trick you don’t need to know about”. It’s not clear whether she’s uninformed about how the same generation is going to be left with the burden of debt when they finally get jobs, or whether the third and fourth parties are as reckless as the Republicans and Democrats.
Getting fellow citizens informed is very important because many don’t realize how much this impacts everyone. It’s easy to solely blame the Chinese investors on our housing bubble, who’s attraction to Canadian houses, are that they are an asset to hide their money in. Let’s look at who’s been helping them out with low interest rates for mortgagers and the low value of the Canadian dollar for them to hog it all up. Who does this hurt in the long run? Certainly not the Chinese investors who have no idea what to do with their money that is intended for their future children. Again, the low dollar hurts middle class retired elders whose retirement might be “adjusted to cover inflation”, but who don’t make a lot of new income and far from the same amount they made while they worked.
A fringe number of people having knowledge of the issue isn’t enough and why opening up minds is the first step. The more voices that are heard, the more seriously this subject will be taken. SteemIt is a powerful method to spread ideas and I'm glad I found out about it through 
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