PRESIDENTIAL ELECTIONS AND OUR BELOVED FEDERAL RESERVE
Seriously, can anybody still believe that playing musical chairs with the party affiliation of our chief executive is going to bring about the kind of change this country really needs? Watching the predictable and carefully orchestrated “debate” between Obama and McCain is like watching an argument over how to rearrange the furniture on the Titanic. Every four years, it’s the same. The “conservative” candidate talks about the evils of “big government” and “out of control spending” while the “liberal” candidate talks about the need for social reform, new programs, etc.
A cursory look at the past several administrations shows that this is nothing but a Kabuki performance. Democrat Clinton becomes an anti-entitlement, pro-corporate, interventionist hawk in his second term. Likewise, W. Bush, who in 2000 ran on a platform of non-interventionism, a “humble foreign policy,” limited government, personal privacy, and government fiscal responsibility becomes the most interventionist, civil liberty trouncing, big spending, fiscally irresponsible president we’ve seen in many, many years (possibly ever). Both presidents lied to their constituents in order to gain power and then predictably turned their administrations into the tools of large corporations and banking/finance elite.
Meanwhile, there are forbidden issues that nobody is allowed to talk about.
Nobody talks about how our nation’s creditworthiness as measured by the value of the dollar is being utterly and unnecessarily decimated by the Fed. The Fed has theoretically been charged with stabilizing our nation’s monetary policy, yet it continues on a seemingly purposeful course to our nation’s economic destruction. The Federal Reserve is not an agency of the federal government. Although its chairman makes reports to Congress and answers questions, the Fed is not accountable to Congress. It only releases the information it wants to release. In the past year, the Fed has stopped issuing data regarding our nation’s money supply (M3). Basic supply vs. demand issue… in what world would it ever be a good thing to completely ignore the amount of money in circulation? Am I missing something here?
Nobody is talking about the absurdity of America maintaining a 130-nation permanent military empire across the globe (and that’s NOT even including Iraq). Nobody is talking about the REAL reasons that the world is far more dangerous today than it was before America became an empire rather than a republic. Nobody is allowed to say that maybe… just maybe… the bullish manner in which America has conducted itself abroad has actually incited far more anger and terrorism than it has squelched. Anyone crazy enough to suggest that American foreign policy had anything to do with 9/11 is literally booed off stage and not allowed to return.
Lucky for us, everything will be o.k. because, when we can no longer pay our enormous debts from our ill-advised attempt at overseas interventionism, the Fed will save us all by “lowering the interest rates” some more by over-buying bank bonds and printing up some new money, literally out of thin air. That’s always a good idea. Check out Germany after WWI as a great example. That worked out very well for them. In fact, after WWI, thanks to lowering interest rates to almost zero to “stimulate the economy” and printing up a whole boatload of deutschmarks to pay the salaries of a huge group of striking workers, the German deutschmark lost virtually all of its value. Of course, everybody panicked. We all know what happened next… Hitler and his Nazi friends exploited popular dissatisfaction and fear to establish the Nazi regime. I think we can all agree that was a great idea!
Imagine a real economic depression or collapse in the U.S. This is not unrealistic. It will likely happen as a result of widespread international consensus that the U.S. economy is no longer viable and that the U.S. Dollar is no longer the reserve currency of choice. Upon such an economic collapse, how quickly would we all give up our civil liberties, democratic ideals, and high minded ideals of equality and civic duty? How quickly would we all look to a charismatic (albeit fascist) leader or set of leaders for the answers to all that ails us? What would we be willing to give up? Even if the economic or some other crisis is not as bad as we are led to believe, the desired effect is the same. Economic crisis (whether real of fabricated) has historically been a great way to radically reform societies. Our nation’s War of Independence is a great example. The New Deal is a great example. Nazi Germany is a great example. Post-9/11 America is a great example.
Interestingly, in the ’60s and ’70s, former Fed chairman Alan Greenspan was (and is again now) a staunch supporter of the Gold Standard, and for good reason (“Gold and Economic Freedom” published in many forms, see Ayn Rand’s “Objectivist” newsletter in 1966 and “Capitalism: The Unknown Ideal” in 1967). In fact, it is now quite clear that Greenspan never changed his true opinion in support the Gold Standard. Why would somebody as influential as Greenspan go against his own stated opinions regarding the Gold Standard, choosing to propagate a bogus and harmful monetary policy knowing full well the negative effects on the American economy? Is it possible that he and the people he is beholden to stood to make out like bandits as a result of the drivel that he shelled out during his term?
These people are not stupid. If the desired goal was a stable and sound dollar, our monetary policy would reflect that and a different policy would be implemented. However, if you assume for a moment that the goal is not a stable and sound dollar, the Fed’s current policies of devaluation and destabilization make perfect sense. The fact is, these fairly smart bankers who make up the cartel we call the Federal Reserve are well aware of the cause and effect of what the Fed is doing. The effect is clear… a dramatic consolidation of wealth into the hands of fewer and fewer people over time. Upon review of the Fed’s policies over nearly a century, the only logical conclusion is that the desired goal is being reached.
It is important to realize that inflation as we know it today simply did not exist until the early part of the 20th Century. The Fed was created in 1913 under Wilson’s watch. FDR abrogated gold convertibility in 1933. As a result of these two sweeping “deforms” we transgressed the intention of the Founding Fathers with respect to establishment of a central bank and violated a principle of economics that had proven true for all of history up to that point – the gold standard. J.P. Morgan, whose company was instrumental in drafting the Federal Reserve Act in 1911, has had and continues to have Predictably, J.P. Morgan recently had the inside track to buying Behr Stearns with aggressive financing help of the Fed.
Could we really be so naïve? How many Americans ever even hear the word “Federal Reserve” being raised in the context of a Presidential debate? I’ll venture a guess and say… um… ZERO?
Now, I fully recognize I’m being single minded in my focus. Cleary, the Fed is not the only important issue facing Americans. However, the economy is kind of like your health… “if you don’t have your health, you don’t have anything.” Without a sound monetary and fiscal policy, together with a constitutionally limited government, this nation truly does not have anything. It all starts with the money. If that goes, we can kiss our great American Experiment goodbye.
And it looks like people are starting to recognize that. It is interesting that, at the beginning of this year, the hot button voter issues were the “war on terror”, health care, immigration, and the war in Iraq. Now, the economy has become the number one issue of concern for the American voting public. I think people are starting to rightly recognize that the economy is the rudder that steers the American political ship (“it’s the economy stupid”). Unfortunately, very few of the American electorate are aware that the economy is dragged around on a leash in large part by the Fed.
The question is, how long can we last if the current progression continues? Is a change in party from a Republican to a Democrat president going to affect the fundamental sickness in our system? I think not. Only a fundamental change in the way we view our economy and foreign policy can do that. A significant overhaul of the Federal Reserve is necessary, with a greater emphasis on Congressional accountability, auditing power, and oversight.
Over an 8 year period, it can be done. Of course, there must be a concurrent change in our interventionist foreign policy and related spending. We also must be willing to take some pain for a few years in terms of tight money. If we want any value to leave to our children, though, Fed reform is absolutely necessary.
Which candidate is proposing this? Hmm?
True, an Obama presidency would likely be less destructive to consumer attorneys than a McCain presidency. That’s not a bad thing in the short term. However, if the fundamental leak in this big American ship is not quickly patched, there won’t be a lot of value in our profession left to fight for, and there won’t be enough of us around to oppose, let’s say, National No Fault Insurance. And that issue won’t really matter, anyway.