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I am honored to participate in this remembrance of President Woodrow Wilson and his major role in creating the Federal Reserve System as a unique experiment in public-private partnership. The federal government was small during non-war periods in the 19th and early 20th century. Relative to GIMP, federal spending or outlays remained between 2 and 3% of GNP. That compares to about 25% today. That's a main reason that the federal government did not have a role, but it is not the only reason. Both the public and politicians understood that keeping the government far away from money creation was the best assurance against inflation that could be had. That's advice that officials repeat but ignore today.


speech at Woodrow Wilson Foundation, July 2010.