Operation Twist-the-Truth: How the Federal Reserve Misrepresents Its History and Performance

45 Pages Posted: 5 Mar 2014

See all articles by George Selgin

George Selgin

The Cato Institute; University of Georgia

Date Written: March 3, 2014


At its hundredth anniversary, the Federal Reserve System’s powers are greater than ever, its asset holdings make it far larger, by assets, than any of the world’s profit-oriented financial firms, and it commands worldwide prestige. But what has this prestige got to do with the Fed’s actual record? “No major institution in the U.S.,” Milton Friedman observed some years ago, “has so poor a record of performance over so long a period, yet so high a public reputation.” That assessment is no less valid today, thanks to the Fed's success in fostering the public’s favorable opinion of it through its official publications, exhibits, and webpages aimed at the general public, as well as by means of public lectures and testimony of its representatives. Here I survey the ways in which such publications and testimony contribute to the Fed's undeserved reputation by misrepresenting both its history and its record.

Keywords: Federal Reserve, Propaganda, Reputation

JEL Classification: E50, E58

Suggested Citation

Selgin, George, Operation Twist-the-Truth: How the Federal Reserve Misrepresents Its History and Performance (March 3, 2014). Cato Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2403907 or http://dx.doi.org/10.2139/ssrn.2403907

George Selgin (Contact Author)

The Cato Institute ( email )

1000 Massachusetts Ave. NW
Washington, DC 20001
United States

HOME PAGE: http://www.cato.org/centers/center-monetary-financial-alternatives

University of Georgia ( email )

Athens, GA 30602-6254
United States
706-542-2734 (Phone)
706-542-3376 (Fax)

HOME PAGE: http://https://www.terry.uga.edu/directory/economics/george-a-selgin.html

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