This piece was co-authored by Max Rangeley, an editor at The Cobden Centre.

For the most part, tax, regulatory, fiscal, and labor policies differentiate from country to country. This makes it difficult to point to any one of these specific areas to explain the current global economic slowdown that we have been experiencing for the past few years.

There is, however, one sector that ties the entire world economy together: the global monetary system.

For decades, central banks have been artificially targeting interest rates and controlling the money supply with decisions made by some of the smartest PhDs the world has had to offer. These economic planners have based their decisions on different rules, economic indicators, and theories. The mentality behind their system is a top-down approach that depends on experts and elites, not free markets and people.

When economic times are good, central bankers pat themselves on the back. They give themselves flattering and gratuitous pet names like “Gentle Giant” and “Maestro.” But when times are bad, they give excuses, place blame, and banter on about how there really isn’t much central banks can do to fix the problem.

Given the important role of interest rates and money supply in an economy, we believe that it’s fair to examine how central banks are faring at managing economies.

The Federal Reserve has a dual mandate of price stability and maximum employment. Since the founding of the Federal Reserve, the dollar has lost 97 percent of its value and unemployment has been higher than during the pre-Federal Reserve era. Volatility increased globally after the breakdown of the Bretton Woods system as monetary policy became more discretionary.

In his speech at Milton Friedman’s ninetieth birthday, Ben Bernanke himself said that the Fed was responsible for the Great Depression; history will show that central banks both created the global credit bubble that caused our current predicament and then proceeded to prolong the agony for the global economy by engaging in further and more radical price fixing in credit markets.

To be fair to central bankers, they never stood a chance.

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Read the full article at Rare.

Terry Schilling is the executive director of American Principles Project.