From Chair of the Board of Governors of the Federal Reserve System Janet Yellen:
Some degree of inequality in income and wealth, of course, would occur even with completely equal opportunity because variations in effort, skill, and luck will produce variations in outcomes. Indeed, some variation in outcomes arguably contributes to economic growth because it creates incentives to work hard, get an education, save, invest, and undertake risk.
Under laissez faire capitalism, there is no “arguably” about it: the prospect of getting rich, keeping one’s wealth, and keeping it in a store of stable monetary value propels economic growth, far more so than any other system. On the other hand, making central bankers the commissars of our overtaxed, over regulated, welfare-state economy destroys incentives to work hard, plunges college graduates into debt for degrees of little economic value, drives interest rates so low that nobody saves, turns investment markets into casinos, and makes speculation and financial engineering the predominant forms of risk undertaking. Ms. Yellen specified four sources of opportunity: resources available for children, affordable higher education, business ownership, and inheritances, but omitted what is arguably the most important source of opportunity in our state-directed economy: cronies in government. Three nuggets of advice for Ms. Yellen and all the other Washington masters and mistresses of the universe: shut up, get out of our way, and leave us alone.
