In a July 19 Wall Street Journal article titled “Why No Outrage?”, James Grant quoted Mary Lease, a 19^th century Populist who urged farmers to “raise less corn and more hell.” Grant notes that financial behavior that would have been met with outrage in the 19^th century is now met with near-silence from a too-tolerant populace. For decades after the Civil War, monetary reform was a chief political issue, one around which whole political parties formed. Why is it hardly mentioned today? Grant suggests that the lack of outrage may be because the old 19^th century Populists actually won:

“This is their financial system. They had demanded paper money, federally insured bank deposits and a heavy governmental hand in the distribution of credit, and now they have them. The Populist Party might have lost the elections in the hard times of the 1890s. But it won the future. . . . They got their government-controlled money (the Federal Reserve opened for business in 1914), and their government-directed credit [Fannie Mae and Freddie Mac]. In 1971, they got their pure paper dollar. So today, the Fed can print all the dollars it deems expedient and the unwell federal mortgage giants, Fannie Mae and Freddie Mac, combine [to] dominate the business of mortgage origination . . . .”

Mr. Grant may have answered his own question, in another way than he intended. Most people, evidently including Mr. Grant, actually think that the Federal Reserve is a federal agency; and that paper dollars are issued by the government; and that Fannie Mae and Freddie Mac are federal mortgage giants.

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