Ron Paul 1/20/2010 Moves To End The Federal Reserve

3 MORE : 7. It would "put the American banking system on solid financial footing" and "customers' deposits would be safer than they are today." The argument here is that if banks didn't have a government safety net, they'd be more careful and their customers would be too. Jim Grant makes this case far more exhaustively in his wonderfully cranky book Money of the Mind: Borrowing and Lending in America from the Civil War to Michael Milken. The flip side is that lots of banks failed and lots of depositors lost most or all of their money in the pre-safety-net days. That's what made the survivors careful. The bank-failure solutions offered up by Washington—the Fed and the FDIC, mainly—have created new problems of their own. But banks are naturally unstable, because they borrow on a short-term basis from depositors and turn around and hand most of that money back out as longer-term loans. Paul nods to this in a brief discussion of the evils of fractional-reserve banking, but fails to acknowledge that fractional-reserve banking predated the Fed and is both a product of and enabler of free-market capitalism. Banning it would thus represent a pretty severe encroachment on the economic liberty he so cherishes. It would probably also be a serious economic downer.
8. It would "end the way in which our electoral cycles have been corrupted by monetary manipulation." There's no hard evidence of such corruption since Arthur Burns' tenure as Fed chairman in the 1970s, but Paul is right that the risk is always there. Then again, a Fed that was more closely controlled by Congress—which Paul advocates as an intermediate step before the Fed is completely abolished—might be even more prone to election-year shenanigans.
9. "The national wealth would no longer be hostage to the whims of a handful of appointed bureaucrats whose interests are equally divided between serving the banking cartel and serving the most powerful politicians in Washington." Instead, it would be hostage to the ups and downs of the gold-mining industry, because under a gold standard the supply of money is determined by the supply of gold. The economic argument for central banks was that wise technocrats could do a better job of managing the money supply than gold miners could. That faith may have been misplaced, and a lot of people more hard-headed than Ron Paul have been calling lately for at least a partial return of gold to the global monetary system. But returning to gold almost certainly wouldn't be the silver (gold?) bullet that Paul makes it out to be.

1. "It would bring an end to dollar depreciation." You betcha. Paul wants to replace the Fed with a return to a strict gold standard—in which dollars would be redeemable in gold. If that happened, and we stuck to it, the dollar would indeed maintain its value better than it has since the Federal Reserve was created in 1913. (More on this in item 4.)
2. "It would take away from government the means to fund its endless wars" and its "massive expansions of the welfare state that has turned us into a nation of dependents." Paul is right that governments in the U.S. and elsewhere have often printed money to pay for major wars. They've done that even without the help of central banks (as the U.S. did during both the Revolution and the Civil War), but having a central bank institutionalizes the mechanism for money-printing and thus presumably makes it easier to get away with. As for his welfare state argument, there's surely something to it, but not nearly as much as Paul seems to think. In the post World War II era, Germany has followed much more of a hard-money (that is, Ron-Paulish) line than the U.S., yet it has a much bigger welfare state. So the growth of government can be a political choice, not just the result of the machinations of central bankers.
3. It would "stop the business cycle." Really? Paul utterly fails to back this claim up in the book, because he can't. We've had recessions and depressions in the U.S. both with central banks (the Fed and its two predecessors, the First and Second Banks of the United States) and without them. It's true that Fed backers have repeatedly claimed through the decades that wise central bankers had figured out how to stop the business cycle, and repeatedly been wrong about that. There's also an argument to be made—although the evidence is mixed at best—that central banks exacerbate the business cycle. But saying that we would have no more economic ups and downs if the Fed were shut down is utopian fantasizing.
4. It would "end inflation." Correct. If we returned to a gold standard and stuck to it, there would be periods of inflation and periods of deflation, but over the long run prices would hold more or less steady. Unless we discovered that alchemy worked or the moon was made of gold, in which case we would get raging inflation. Paul also completely ignores all the economic problems that deflation, especially sharp deflation as we had in the early 1930s, can bring with it. He's apparently been too busy with his beloved Austrian economists to ever read any Irving Fisher (pdf!).
5. It would "build prosperity for all Americans." Paul does a pretty good job of explaining why the Fed's money-printing can't build prosperity, but in general this country's record of building prosperity has been about as good in the Fed era as in the pre-Fed era. Which leads me to think that monetary policy may not be the key variable in determining prosperity over time.
6. It would "end ... the corrupt collaboration between government and banks that virtually defines the operations of public policy in the post-meltdown era." He's onto something about the corrupt collaboration, of course, but he's also being either naive or disingenuous. Does he think there wasn't any corrupt collaboration between government and banks in the 19th and early 20th centuries, before there was a Fed?

No unimatrix is full of it as she cannot point to anything save for some old, anonymous writings as proof of Ron Paul's alleged racism.

How about a video actually saying something racist? Maybe an article actually written by him. Nope...nothing. Nothing like Harry Reid's racist writings that we can actually attribute to Harry Reid, or Rush Limbaugh, who spouts ridiculous racist statements all the time.

Saying that a newsletter published by Ron Paul is proof of his racism is like saying that the owner of Clear Channel is racist because their talk show hosts spout racist garbage. It's a silly childlike argument that really doesn't warrent any kind of serious response.

The bottom line is the the Federal Reserve is a private institution with no accountability and it needs to be abolished. There's nothing "infinitely complex" or even remotely complex about it.

With all due respect, Walks_in_Storms, there is a good deal more to the point Unimatrix is making than a mere allegation of past racism. Not that Ron Paul, being a politician, is by any means alone, but he is inordinately fond of grandstanding -- even in an occupation known to attract such people. Further, the articles in question and his quite open support of them in the bad old days before he nudged his message much closer to the middle of the political spectrum indicate that he has demonstrated a willingness to take outrageous and frankly repugnant positions if those are the positions that will persuade the audience immediately in front of him. To me, at least, this demonstrates a fundamental lack of integrity.

He also claims that the articles in question were published without his authorization at a time when he was busy practicing medicine. To assert that a politician whose career lives or dies based on public perception allowed articles of this nature to be published and broadly distributed in his newsletter with his name in the masthead but without his approval, tacit or otherwise, does great damage -- at least in my opinion -- to his credibility. It is also evidence that he is careless...a quality that I would argue carries over into his analysis of issues and his proposed solutions to them.

I also find his analysis to be simplistic and unpersuasive. I realize, of course, that others disagree. But in my view he is a mile wide and an inch deep. Of course, he is not alone among politicians who lack integrity, credibility and depth...Ronald Reagan and George W. Bush would top a very, very long list of politicians who exemplify such qualities (nor do I believe that the list would include only Republicans by any means).

But there are a few commenters on this site who believe that his every utterance is pure genius and who therefore post some clip of him nearly every day (and sometimes several times a day). By itself, that is merely tiresome...I watch one of the clips every now and again...and then almost invariably kick myself for doing so because the clips are nearly always the same...Ron providing 8th grade-level explanations and proposed solutions to problems that are infinitely more complex than he suggests...so goes another five minutes I will never get back.

But of course, there are dozens of members of Congress who tower over Ron Paul in terms of their achievements, their intellects and their honesty. I can only imagine how silly this site would be if even half of the regular participants posted a video clip every time the member of Congress they most admire opened his mouth (and, anticipating the response to that line, yes there are quite a few admirable members of Congress...I'm not saying they are necessarily in the majority but they do exist).

In short, Unimatrix is merely identifying one symptom of the disease...but it is illustrative of the whole...

Not sure what the comments about racism have to do with reform related to a Centralized Banking System. I think everyone in our legislative branch should study up on the start of the Federal Reserve. Although the need for a central bank has been argued since the inception of this country, I tend to agree with the stance of Thomas Jefferson in opposing the creation of an organization: "I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

Thomas Jefferson to John Taylor May 28, 1816, in Appleby and Ball (1999) p 209); also Bergh, ed. Writings 15:23

Can't think of one good reason why we need group of elite bankers meeting in secret rooms to handle our nations money supply.

It sounds like his ultimate goal it to privatize it. A big chunk of this mess is due to banks, who commit lots of fraud (AIG anyone?) and yet, they aren't getting into any trouble.
And why are we also not blaming congress? Congress has oversight on them.
I'm not sure what I think of this at all. Many of Ron Pauls ideas are detrimental to women and I feel, poor people. So I am inclined to dislike this idea until I get an alternative person agreeing with this, then I'll re-think it.

I dare unimatrix0 to try and find some other evidence, such as, something that Ron Paul ACTUALLY DID WRITE like Harry Reid's admissions about President Obama (“ready to embrace a black presidential candidate, especially one such as Obama – a 'light-skinned' African American 'with no Negro dialect, unless he wanted to have one").

Or maybe unimatrix can point to some legislation or activities that proves Ron Paul is a racist.

She can't. She can post a picture of a white supremecist who probably works for the Fed like Hal Turner, standing next to Ron Paul. Dude, anyone can stand next to Ron Paul and snap a picture and post it online. Give us a break with that please.

Ron Paul is a Moron

Good luck with that .