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f you were going to spend $2bn to improve the world, where would you put it? Forty-odd years ago, Ewing Marion Kauffman, a self-made billionaire from Missouri, was faced with just that choice. He took a rather unusual decision. Instead of using his self-made billions to battle homelessness or help the poor, he decided to chase the Great American dream. More specifically, he founded an institute, which takes his name, in Kansas City, to promote entrepreneurs and the entrepreneurial ideal. These days the Kauffman Foundation is one of the largest private foundations in America, topped only by groups such as the Ford Foundation or the giant Bill and Melinda Gates charity.
When I first encountered the Kauffman Foundation – which is barely known outside the US – I must admit I found the whole endeavour a little odd, if not ironic. After all, the usual image of entrepreneurs is that they go forth and boldly strike out on their own, without any paternalistic aid. And America, perhaps more than anywhere else, is supposed to epitomise the entrepreneurial dream; indeed, it is one thing that makes it so attractive.
Daily Archives: April 22, 2011
Oil: We’re Being Had Again
No matter how many of his Fed presidents claim they are not to blame for the high price of oil, the real problem starts with Ben Bernanke. The fact is that when you flood the market with far too much liquidity and at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it’s still true today.
Richard Fisher, president of the Dallas Federal Reserve, spoke in Germany in late March. Reuters quoted him as saying, “We are seeing speculative activity that may be exacerbating price rises in commodities such as oil.” He added that he was seeing the signs of the same speculative trading that fueled the first financial meltdown reappearing.
Here Fisher is in good company. Kansas City Fed President Thomas Hoening, who has been a vocal critic of the current Fed policy of zero interest and high liquidity, has suggested that markets don’t function correctly under those circumstances. And David Stockman, Ronald Reagan’s Budget Director, recently wrote a scathing article for MarketWatch, titled “Federal Reserve’s Path of Destruction,” in which he criticizes current Fed policy even more pointedly. Stockman wrote, “This destruction is, namely, the exploitation of middle class savers; the current severe food and energy squeeze on lower income households … and the next round of bursting bubbles building up among the risk asset classes.”