However, the neo-Keynesian, centralized banking system under which Washington conducts its macroeconomic financial business is fatally flawed based on what you have said: that booms which turn into extraordinary busts lead to populist outcomes and the rise of populist leaders which have unpredictable negative long-term consequences.

Neo-Keynesian centralized banking produces bubbles, which tear at the fabric of a country’s economy, and in the face of globalized world markets, at the fabric of the global economy. If banking is decentralized, there tends to be more “chaos” in the markets, but “chaos” here is merely a negatively shaded term for “creative destruction” – which is Smith’s “invisible hand”. When someone fails at business, he fails and is forced to restructure his methods and try again. When someone succeeds, he reaps the rewards.

Neo-Keynesian economics contradicts this, as it puts the power in the hands of a centralized government-backed institution (The Federal Reserve), who can conduct macroeconomic policy in the interest of the Federal government. The drawback here is that the Federal government’s interests and the interests of the country are not always one and the same. This is the essence of the argument against the Fed, currently, that the Fed is conducting an agenda that is not in the best interest of all Americans in the long-term.

http://www.amazon.com/Yankee-Leviathan-Origins-Authority-1859-1877/dp/0521398177/ref=sr_1_9?ie=UTF8&s=books&qid=1253761875&sr=8-9