In a world of Democrats, there will be time for them to make profits.

Now's not that time.

And Republicans.

I've abandoned free market principles to save the free market system.

You need a voice of liberty.

Look no further.

You've found it.

Tom Woods.

Beware, citizen.

You are now departing from the world of allowable opinion.

The Tom Woods Show.

Welcome, everybody.

It's Monday, September 22nd, 2014. And today we're talking about the Taylor Rule. Some of you may know about the Taylor Rule, but I bet a bunch of you don't. But whether you do or you don't, you're going to find this conversation educational and useful. Without stealing the thunder of my guest, I'll just tell you that the Taylor Rule was introduced some time ago by a professor.

We'll get all the details in a second.

The idea of it is that this is the proper guide for monetary policy.

This is a guide for what the Federal Reserve should do when making monetary policy. It should go by this guide. This

equation is a guide telling it what to do in terms of interest rates. And the claim is that if

only the Fed had followed the Taylor rule, we wouldn't have had the housing boom and subsequent

bust.

And there are a lot of free market economists out there, at least mildly free market, who are big fans of the Taylor Rule.

And I say, this is what we need more of. It's a good rule for the Fed to follow.

Well, I bet you're already smelling a rat here, and if so, it means you are a loyal listener of this show.

...