James Pethokoukis

Politics and policy from inside Washington

Ron Paul’s Dumb Plan to Audit the Federal Reserve

July 31, 2009

The Federal Reserve is at least partially to blame for the economic crisis. It left interest rates too low for too long, and laxly regulated the megabanks. Given this reality, or at least this public perception, it’s not surprising that there are plenty of economists and politicos with oodles of ideas for re-imagining the central bank’s role and function. (Linking its policymaking operations more directly to the performance of market metrics such as the greenback, bond rates, and commodities would be a good start.)

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Then there is Representative Ron Paul, a Texas Republican and libertarian who would rather imagine a fantasy world without a Fed. Throughout his political career, Paul has repeatedly called for the Fed’s abolition, preferring Congress to take full control of monetary policy and eliminate fiat money in favor of a gold-backed national currency.

Since Paul can’t eliminate the Fed outright, he’s trying to emasculate it. Impinging on, and eventually ending, the central bank’s independence is the purpose of the Federal Reserve Transparency Act, Paul’s bill which would “eliminate restrictions on audits of the Federal Reserve and open Fed operations to enhanced scrutiny.”

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And what’s wrong with a little more sunshine on the Fed? Nothing, many Americans apparently think. A Rasmussen poll finds that 75 percent “favor auditing the Federal Reserve and making the results available to the public.”

Now those results aren’t a big surprise given the public’s unease with the unprecedented measures the Fed has taken to bolster the economy, including the unpopular bailout of AIG. Another recent poll found that the Fed is the most unpopular government institution, ranking behind even the Internal Revenue Service.

This unease is also reflected in the nearly 300 House members who are supporting the Paul bill. It’s a worrisome level of congressional support that may be pushing Ben Bernanke to educate the public on what the Fed really does, for example through his appearance at a recent town hall meeting at the Kansas City Fed.

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Of course, most Americans surely don’t realize that the non-policy aspects of the Fed are already audited by the GAO, nor have they watched the Fed chairman’s twice-a-year testimony, once known as the Humphrey-Hawkins testimony, in front of House and Senate committees.

But Paul’s bill would go further. An audit would create an explicit and clear congressional assessment of the Fed’s performance. “Indeed, there would be no point to this proposal, given Humphrey-Hawkins, if it were not the intention of the bill’s proponents to exert congressional control of monetary policy decisions in a way that the Humphrey-Hawkins testimony alone does not allow them to,” argues Michael Woodford, an economics professor at Columbia University.

How might more influence be exerted? Economist Anil Kashyap of the University of Chicago thinks an audit suggests the GAO and Congress could force the Fed to supply all the background information that goes into an interest-rate decision and compel all members of the FOMC to share their individual thinking on any issue in real time. “The spirit of the Paul bill seems to be that having FOMC meetings live on C-SPAN would be best way to make monetary policy. That would be a disaster.”

The effect on the economy might not be so beneficial, either. Even if the result of the Fed bill is onlymore aggressive congressional questioning and criticism, financial markets might well fear the bank would start taking congressional wishes into account when making policy.

“If the markets and foreign investors perceive it that way,” says economist Michael Feroli of JPMorgan, “it could immediately push up borrowing costs even if the audits are only a symbolic increasing of congressional oversight of monetary policy.”

More congressional authority would more likely be biased toward pushing for looser monetary policy to bring down unemployment.  If Congress were full of hard–money guys like Paul, that would be one thing. But who really wants Nancy Pelosi and Barney Frank deciding when to tighten and ease? And right now do Americans really want global investors to start questioning the Fed’s commitment to low inflation and a stable currency, right as Uncle Sam is running up record budget deficits?

The economy is only now pulling itself out of recession. Paul’s bill, if successful, could send it back the other way.

Comments

The Congress at any time can revoke the charter of the Fed, they are asking for is more sunlight from it, seems fair to me.Well, what is wrong with his idea? Other than it will be a “disaster”, and is a “stupid idea”. What specifically will cause the problem? The bad policy decisions they made? The possible backdoor deals with banks? If they have nothing to hide, why are they so afraid? Don’t try to pull the “it is in the best interest of the country” lever, why should we give a the federal reserve, who, as you stated, is at least partially to blame for the economic crisis, more power? to me, when you screw up, you get less power in reality-world. But these days that bizzarro world mentality doeesn’t suprise me. Sure, Ron Paul would like to get rid of the Fed, I don’t think we can do that, but that is an apple, and his idea for more sunlight is an orange. I guess having a good chunk of Congressional support for this bill, makes the other congress-folk, and the majority of Americans that know of this “kooks” too huh? Sure…You indicated that “most Americans surely don’t realize that the non-policy aspects of the Fed are already audited by the GAO, nor have they watched the Fed chairman’s twice-a-year testimony, once known as the Humphrey-Hawkins testimony, in front of House and Senate committees.” Sure we do, and that ahem..”oversight” obviously is not enough.During the last Humphrey-Hawkins, Ron Paul told Bernanke he was happy that Bernanke “absolutely will not monetize the debt,”. However, Bernanke says the Fed’s program to buy Treasuries isn’t aimed at making it easier for the government to issue debt. Paul rightfully, calls the program inflationary and overall objects. Anyway, at Humphrey-Hawkins, Bernanke doesn’t have to answer any “sunlight” questions, as I said above, that “oversight” is not enough.You say, ““The spirit of the Paul bill seems to be that having FOMC meetings live on C-SPAN would be best way to make monetary policy. That would be a disaster.” again, enough with the fear-mongering, how?”More congressional authority would more likely be biased toward pushing for looser monetary policy to bring down unemployment. If Congress were full of hard–money guys like Paul, that would be one thing. But who really wants Nancy Pelosi and Barney Frank deciding when to tighten and ease? And right now do Americans really want global investors to start questioning the Fed’s commitment to low inflation and a stable currency, right as Uncle Sam is running up record budget deficits?”Hmm, I don’t know, sounds like heat of the moment fear-mongering to me. Congress already has the Authority; they just are not doing anything about it. The Federal Reserve is chartered by the US Government. The Congress at any time can revoke the charter of the Fed, they are asking for is more sunlight. All the funding of the operations of the Federal Reserve comes from the US.So, we should not expose a potential problem, as it may become more of a problem if we do. Ok, so I guess we just should forget the problem is there, and everything will get better on its own. Pay no attention to the man behind the curtain, comes to mind. For too long The American people have just gone along with known issues, never saying a word, trusting the government and Federal Reserve (unchecked by the people) will do the right thing. Now we are asking questions never waste a good crisis I guess…

Posted by Jay_C | Report as abusive
 

Before the FED was created, the prices were going down about 0.5% a year for a hundred years. After the FED was created, the prices were going up 3.25% a year. See http://www.lewrockwell.com/rozeff/rozeff 307.html for calculations.Who exactly is using all the fake money they produce? What are the shadow deals they are trying to hide? They heavily tax us (by printing un-backed fiat money and taking away our saving) and then refuse to tell how did they use our money for their friends gains? Sure they don’t want people to understand what exactly they are doing, just as like any thief does not want any light on his activities.

Posted by mark_s | Report as abusive
 

You have no idea the size of truck you are throwing yourself in front of by aligning yourself with this cabal. How much were you paid to write this nonsense?http://www.reboottherepublic.co m

 

I strongly disagree with this article. The Fed has a long history of lowering interest rates to please the executive branch, as it is doing currently. (Study the administrations of Coolidge, LBJ, Nixon, Reagan, Clinton, and Bush II). In fact, since its inception, the Fed has repeatedly lowered interest rates far below market levels, thereby creating recessions and depressions that have been wrongly blamed on capitalism. Furthermore, the Fed has repeatedly failed in its alleged purposes of fighting inflation and maintaining high employment. Today’s official unemployment rate is nearly 10%, and the true unemployment rate is close to 20%. In addition, since 1913, the dollar has lost 95% of its value, whereas in the 100 or so years before the Fed’s inception, the dollar lost very little of its value. We all know, however, that the Fed’s true purpose is not to stave off unemployment or inflation but to allow the most powerful banks to inflate and speculate wildly without having to pay the consequences. In this dishonest purpose, the Fed has worked quite well. We need sound money and no Fed! Fed supporters (the puppets of the big bankers) are fighting a losing battle.

Posted by joe | Report as abusive
 

HR 1207 is an audit, plain and simple. It does not call for any changes in policy nor a “congressional takeover”. The Fed controls our economy/money supply and it has just about destroyed it. A dollar was once worth a dollar the year before the central bank came to be, now they have reduced its worth to a whopping 4 cents in comparison. How could anyone with half a brain not want an audit?

Posted by Laura | Report as abusive
 

You are assuming way too much, my friend. You are right; the fed is at fault for our recession. Surely you have read the actual bill (only like 2-3 pages) and comprehend the definition of “audit”. The bill simply removes the veil of secrecy behind the actions of a group of people who are heady with power and control over the American People’s money. The bill requires nothing but a GAO audit, it gives congress no control over the fed, the fed is still free to lend trillions of dollars to foreign central banks if it wants, but it does so in public.I can’t beleive you include that this bill’s purpose is to control monetary policy at the fed… once again, read the bill, it just says, let us see what you are doing. If congress tries to push policy decisions on the fed then it is only the fed’s fault for: A. not being able to run a legitimate business in public view, B. not having the courage to stand up to political pressure. We already know the fed is corrupt…The bottom line is: we simply must not let them lend out hundreds of trillions of dollars behind out backs. The fed already caused the current crisis… I’m not about to let them start another.

Posted by Virgil Kane | Report as abusive
 

I do agree with you, however, that Pelosi, Frank, (th rest of the usualy suspects) having say doesn’t sit well with me either, but for some reason I think that is a small price to pay for the current horrors that are already (and have been) going on at the Fed. And, anyway, we shouldn’t be able to “pick and choose” when to do the right thing.

Posted by Jay_C | Report as abusive
 

“The bottom line is: we simply must not let them lend out hundreds of trillions of dollars behind out backs. The fed already caused the current crisis… I’m not about to let them start another.”Amen the that!

Posted by Jay_C | Report as abusive
 

So the criminal cartel is feeling the heat and hire this guy to run a smear.What else is new?

Posted by gogo | Report as abusive
 

Here is your response, Mr. Pethokoukis. Straight from Dr. Paul himself: http://www.youtube.com/watch?v=aWxvtNLBb VE&eurl=http%3A%2F%2Fwww%2Edailypaul%2Ec om%2F&feature=player_embedded

Posted by Freedom for all | Report as abusive
 

You and other Fed apologists argue that the Fed rips off foreigners by paying them in counterfeit money, and it prints money to pay for the military which is used to simply take what belongs to foreigners by force. Americans in general benefit from this looting. Ending the Fed means ending such benefits.Make no mistake: Ron Paul and his supporters clearly understand. And they choose freedom anyway. Why? Because they are paying for all the costs of imperialism and yet they receive a tiny fraction of the benefits. Most of the benefits are reaped by the decision makers who tell the public nothing but lies to gain support.

Posted by Sean | Report as abusive
 

This article is very deceptive, to start off:”Paul has repeatedly called for the Fed’s abolition, preferring Congress to take full control of monetary policy and eliminate fiat money in favor of a gold-backed national currency.”Dr Paul has NEVER asked for the Congress to take over monetary policy, Kucinich did. As a matter of fact, Dr. Paul and austrian economists say monetary policy should delegated neither to a central bank nor the government. We believe in the free markets, not some bureaucrats dictating interest rates – be it the Fed or Congress or the White House. Money must exist and be created in the free market.What’s wrong with gold standard? Government can’t steal our money by devaluation anymore? oh, honey too bad once we get back on the gold standard you have to go back to work instead of stealing money by inflation.”Bernanke is clearly not operating in the shadows from some undisclosed location.”Really? That’s news to me.”Even if the result of the Fed bill is only more aggressive congressional questioning and criticism, financial markets might well fear the bank would start taking congressional wishes into account when making policy.”I think the market already fears what the Fed will do anytime the FOMC gets together. The bank already takes in consideration congressional wishes – why do you think when Congress appropriates money and the Treasury issues bonds the Fed buys them outright? Because if they didn’t then they’d have problems with the Congress. This statement of your is illogical.”If the markets and foreign investors perceive it that way,” says economist Michael Feroli of JPMorgan”Oh, I see – you found the JP Morgan “economists” to ask about this. They’re part of the Federal Reserve, bubba! It’s like asking the wolf what he thinks about installing a new security system around the sheep farm. Give me a break!”it could immediately push up borrowing costs even if the audits are only a symbolic increasing of congressional oversight of monetary policy.”Really? What would cause the mysterious increase in rates?”More congressional authority would more likely be biased toward pushing for looser monetary policy to bring down unemployment. And right now do Americans really want global investors to start questioning the Fed’s commitment to low inflation and a stable currency, right as Uncle Sam is running up record budget deficits?”Well, Uncle Sam runs record deficits because he has the gun pointed at the Fed asking them to monetize government debt or else …So right here you just proved that the Fed IS in fact very much dependent on Congress.

Posted by Raymond | Report as abusive
 

hey, mr. enabler of corruption. you are the one who needs to be educated on what the fed really does. watch a documentary available on video.google.com called “money masters.” that’s m-a-s-t-e-r-s. you know, the ones you are submissively serving at the moment.

Posted by troy | Report as abusive
 

Ignorance is not an option when the Fed is controling trillions of dollars. He who trusts secrets to a servant makes him his master. Where secrecy or mystery begins, vice or roguery is not far off.

Posted by ajustafactor | Report as abusive
 

we all know where this author gets his directive from based on this article. How in the world can the American people give an agency that is not part of our government and who’s members we know nothing about control our nations money supply. They print our money out of thin air and then charge us interest on it????????? I can that madness others call it “independence”

Posted by David | Report as abusive
 

I disagree with this article.I’d like to point one thing that was TOTALLY incorrect that stood out like a sore thumb…Ron Paul (and the Austrian School of Economics) does not believe monetary policy should be delegated to the Federal Reserve or Congress.Propagandist-style write-ups such as this one are great fuel for our fire.Keep it up. :)

Posted by J. Christopher Stearns | Report as abusive
 

Although I did read the blog entry in its entirety, it was hard to take any of it seriously after the second paragraph. In it was was an inescapeable falsehood, namely that Ron Paul would ever write a bill that would give Congress authority over monetary policy. If you cannot understand this main point, than your arguement holds no validity whatever.

Posted by Andrew | Report as abusive
 

Everyone needs to pump their brakes and read my blog to get the totality of my views

Posted by James Pethokoukis | Report as abusive
 

Mr. Bernanke is getting very nervous that the American people want to look behind the curtain. He tried to appease us earlier this week by answering questions during a “town hall meeting” aired on PBS. Most viewers saw through the doublespeak and lies.Americans certainly have a right to know the financial details of the cabal that has been mismanaging the nation’s money supply for decades. It’s time to open the books and reveal the dirty details that Mr. Bernanke would rather we not see.

Posted by S. Englert | Report as abusive
 

James Pethokoukis —-> Your career as a nefarious bank cartel stooge shall be short lived. Find another career path, perhaps journalism – not propagandism.CONGRESS:To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.Best of luck stooge.

Posted by james | Report as abusive
 

No, Mr. Pethokoukis, we neither have to pump our brakes or read the totality of your views. You aired your flawed opinion on auditing the Federal Reserve, now we are feeding those words back to you in spades. Chew, swallow, excrete; chew, swallow, excrete; chew, swallow, excrete.When you get tired of the routine, or we get tired of educating you, maybe you will find it valuable to educate yourself on the Constitution, the Federal Reserve and the nation’s monetary policy before you put fingers to keyboard.Once again: chew, swallow, excrete.

 

James, You have one friend in this world besides the Goldman Sachs alumni. The Federal Reserve has hired a lobbyist to prevent the audit. “Linda Robertson currently handles government, community and public affairs at Johns Hopkins University in Baltimore, and headed the Washington lobbying office of Enron Corp..”Representative Alan Grayson: “Which Foreigners Got the Fed’s $500,000,000,000?” Bernanke: “I Don’t Know.”http://www.youtube.com/watch?v=n0N YBTkE1yQIgnorance is bad enough but here is Bernanke evading a US Senator when he asked where $2T dollars went. http://www.youtube.com/watch?v=OC5uQx1W8 7I&feature=related

Posted by Bob Jackson | Report as abusive
 

So, Mr. Pethokoukis, in the interest of a little non-threatening-to-the-established-power -structure sunshine, tell us please how much Goldman-Sachs paid you to write this screed?H.R. 1207 passing the house would be the first good thing related to the FED that has happened since its inception in 1913. Central banking is anathema to human prosperity (except those that run/are connected with the central bank) and is the root-cause of many, if not all, of the problems endemic to our society. It alters the structure of production, allows Congress to reward the politically connected and fundamentally destroys the value of the currency it issues at the expense of the very people it is advertised to protect.Debt and inflation are not the path to economic nirvana, only hard work, thrift and the accurate deployment of saved resources through a market-generated rate of interest can achieve that.Don’t buy it? Read Mises, Rothbard, Hoppe, Hazlitt, Bastiat, Hayek or whomever’s writing style best fits your attention span and be convinced otherwise. Personally, for me, that person is Rothbard.We are living in the aftermath of the Monetarist’s utopian fantasy of a world with competitively devalued fiat currencies with philosopher-kings attempting to out compete each other and it hasn’t worked. Freidman was wrong. Keynes has always been wrong and no amount of money printing will staunch the bleeding. H.R. 1207 is the necessary first step in destroying the myth of central banking and a return to a rational economic system based on voluntary transactions between consenting actors.Ta,

Posted by Tom L | Report as abusive
 

As stated by James Pethokoukis: “Then there is Representative Ron Paul, a Texas Republican and libertarian who would rather IMAGINE A FANTASY WORLD WITHOUT A FED.”Well as I remember it in the pages of history there was actually a world that wasn’t fantasy that existed before the Federal Reserve, the current central bank of the U.S. In fact there was a good 80 year or so span b/t it and the second central bank titled The Bank of the United States, where for the most part our economy and value of the dollar did just fine. I also would like to point out our time of greatest economic sorrow(the great depression of the late 20′and early 30′s)before this current one that looks to become the greatest, has occurred under the private Federal Reserve central banking system. Beyond that though, why should anyone want the power to print money to be put in private hands so that, they may in turn, charge us interest to use that money? I pose this question to you because in Article 1 Section 8 of the U.S. Constitution it delegates the power to create money to congress as well as mandating it be connected to gold & silver for the expressed reason of not incurring public debt or inflation. This is what this what what the Fed and other central banks actually cause, massive debt and inflation. In fact the Constitution says that anyone involved in inflation of the currency, which is to devalue it, is guilty of treason and should be put to death. So with all of this in mind, I have come to one of two reason for why you would argue for such a thing. One is that you are a dolt, or two is that you have some personally vested interest w/ the Fed which would cause you many problems financially and legally. I think it is the latter. Oh by the way, an audit of the Fed would lead to it’s abolishment due to the documented proof of its atrocities that would be found; as well as many indictments of all who are involved, which is why the Fed and everyone fighting against it’s audit are doing so.

 

“Throughout his political career, Paul has repeatedly called for the Fed’s abolition, preferring Congress to take full control of monetary policy and eliminate fiat money in favor of a gold-backed national currency.”Not entirely true; his end goal seems to be removing the hand of government from the money issue permanently, other than enforcing contract and fraud laws. Inflation would come with a national gold standard as well, and Paul and the other Mises crowd knows this; they want free-market commodity based money. Folks might not agree with that idea, but to paint the Austrians as folks who have anything more than a practical attitude towards gold, i.e. they think that it would left to the freemarket gold would become the currency but they don’t want to enforce it through law, is misleading.And frankly it’s a fantasy to believe that you can purport to believe in the free market, but think that a central bank with a monopoly to print money can do a better job than the market. It’s this logical inconsistency that’s been put forward by so called free-marketers, including purported libertarians, that’s been the most confusing. Frankly it’s much more naive and utopian to believe in the neutrality and actual independence of the Fed; considering the incestuous relationships that exist between the corporate and political world. It’s also naive to think of the Fed as anything more than the domain of the Wizard of Oz.

Posted by ABC | Report as abusive
 

“The economy is only now pulling itself out of recession. Paul’s bill, if successful, could send it back the other way.”Sounds to me like you and the like-minded at the Fed are trying to blame Ron Paul and this bill for the economic turmoil that is sure to come. Scapegoat, anyone?

Posted by Audi | Report as abusive
 

“The economy is only now pulling itself out of recession. Paul’s bill, if successful, could send it back the other way.”Let’s take a leaf out of our government’s book and say if you’re doing nothing wrong, then you have nothing to hide. The American people are ticked and they want to know where their money is going. Paul’s “dumb” bill would force them to disclose that information, nothing more.

Posted by B.I. | Report as abusive
 

The congress and Fed have already extended $25 trillion worth of credit in the past two years. How much of a looser monetary policy could you have?

 

James Pethokoukis, With your comment about the Fed Rev Bank audit would send us backwards, Is Proof that God loves idiots as well ! I can see by your age you got a lot of learning to do, please reframe from making comments about issues until you have the full story.

Posted by Billy | Report as abusive
 

You are bought and paid for Mr. Pashowskiishki!An organization create by what…9 votes in the empty house of congress that december night, 1913, is not a legitamate organization!96% drop in the value of the dollar and you say…we need them? What a keynsian shmuck!

Posted by Jason | Report as abusive
 

prices fall over time without fiat money and credit creation—good for savers and equity holders, bad for banks and debt instruments.prices rise with fiat money creation and credit creation—bad for savers and equity holder, good for banks and debt instruments.Whose side are you on?

Posted by butlmat | Report as abusive
 

James,I truly hope you take the comments to heart and follow the path that they lead you. Learn the truth and do this country and the world a service by reporting the same.Should you choose to remain a Fed protagonist, may they line your pockets well. You will need every God forsaken FRN, as the price of survival in the hell they are delivering remains unknown. May God bless you.

 

If Ron Paul manages to kill the bank, the cost of money (interest rates) might again be established by market forces rather than by the interests of bankers and government. Egads!

Posted by Schvenzlerman | Report as abusive
 

“And right now do Americans really want global investors to start questioning the Fed’s commitment to low inflation and a stable currency, right as Uncle Sam is running up record budget deficits?”…are you crazy? the Fed’s commitment to low inflation and a stable currency?

Posted by morgan s. | Report as abusive
 

Not only should the Federal Reserve be audited, it should be ABOLISHED.It creates money out of thin air. It just creates it out of thin air because it has been granted legal charter. And then every dollar the government spends has to first be borrowed from the Fed. You can’t ever pay off the debt if every dollar you make payments with was borrowed at interest in the first place!!!Smaller, de-centralized banks offering interest rates in-line with their actual, in house reserves would surely be preferable to this Rockefeller/Morgan/Warburg brainchild of soft-tyranny.Get back on the gold standard, go to bi-metallic standard, back the money with cotton like the Confederacy did.. I don’t really care. But end the damn Fed.

Posted by richard w. g. | Report as abusive
 

Jimmy — Do yourself a favor and subscribe to Grant’s Interest Rate Observer. Read the past 5 essays by Mr. Grant and report back if you still believe that sunshine on the Fed is bad. http://www.grantspub.comthx.

Posted by Charlie Cross | Report as abusive
 

So many say that the Fed already gets audited so there is no need for this bill.Well, here is Bernanke evading a US Senator when he asked where $2T dollars went. http://www.youtube.com/watch?v=OC5uQx1W8 7I&feature=relatedI don’t know your definition of an audit, but in my definition “I don’t know” does not constitute a revealing of anything. (Audits are meant to reveal things.)How does a crook say “up yours”? Answer: Trust me.

Posted by Alex | Report as abusive
 

How much did they pay you to run this piece? You aren’t a real journalist, you are a spin tool. I’ll put you on my ‘no accountability list’.

 

Let’s not forget that our beloved nation is a representative republic, at least on paper. We are at the mercy of the international bankers and in reality congress has no genuine oversight. They who control our money control our country. Congressman Paul is absolutely correct in his assessment of the Fed.

Posted by Jose | Report as abusive
 

What we’re talking about here is a battle of ideas between the “Keynesians” and the “Austrian” economists with the fate of our country at stake. All great nations have failed because they destructed their own currency. Here’s an article I wrote for my local newspaper. It’s in the middle of the page under “Another Way”:http://online.dailyamerican.com/pdf  /09/07/16/07-16-09/a040716091.pdfThe ideas presented aren’t mine. They are ones I was taught in college economics by my then professor Lawrence W. Reed though. He is now president of the Foundation for Economic Education (www.fee.org).In times like these an explanation is what is needed more than anything. Be sure to check out the websites listed at the end of the article.You can then forward the article to whomever you like. Hopefully you will be inspired to look into Austrian Economics and stand up for it too.

Posted by Kent | Report as abusive
 

This article is about as misleading as the name of the bank it’s about.

Posted by redstallion0 | Report as abusive
 

Wow, this whole section of comments is the most uneducated sack of crap I’ve ever read. You boys better tool up and go learn monetary policy and economics, because all the negative comments I just read are completely mislead and, well, false. Ron Paul is ok, I guess, for a senile old man, but he doesn’t understand the first thing about monetary policy, and you are all morons for jumping on his anti-fed bandwagon. If you all think that the Fed is primarily culpable for the collapse, you better go take a look in your mirror while you’re at it and realize that you shouldn’t have been smoking pot when you took out that mortgage you couldn’t afford. Congress would have exacerbated the collapse and you all know it. We need the Fed, and without them we would be sent back to the dark ages, especially if guys like Paul were in charge of setting interest rates. Can you imagine how long it would take Congress to raise or lower interest rates, after passing action through the senate and then the house? We can’t even get health care right for God’s sake! The economy would be back and forth between being overheated and stagnant all the time if we were without any Fed moderation! Congress and it’s giant level of numbskulls don’t know the first thing about interpreting economic data, and you want them in charge? Please.

Oh, and all this talk about Austrian economics is scary. Reverting to Austrian economic thought is a step in the wrong direction. It’s philosophical, not scientific, and bases itself in too many assumptions without controlling for economic variables. Just wanted to let you fools know. And Keynesian economics is what got us out of the great depression, and there is HISTORICAL EVIDENCE of this.

Btw, gold is the same thing as paper money. It can be traded in for goods and services only because we trust it can. The difference between the two? There is a fixed supply of gold, it’s heavy and it’s hardly liquid enough to trade in for other monies. There’s a reason we don’t use it as our primary currency.

Lesson learned babies. Go back to your cave with your uninformed leader.

Posted by raybansonmyface | Report as abusive
 

READ YOUR HISTORY BOOKS!!!!

Posted by raybansonmyface | Report as abusive
 

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