A Short Stack of Lies and Half-Truths from the Wall Street Journal

Lawson for Congress ^ | October 31, 2008 | B.J. Lawson

[Palin4President]

I’m grateful that Dr. Tom DiLorenzo, professor of economics at Loyola College, took the time to write a rebuttal to an inexplicably ignorant hit-piece recently published in the Wall Street Journal entitled “A Short Banking History of the United States.”

The author of this article, Mr. John Steele Gordon, makes a number of spurious claims in an attempt to discredit the economic philosophy of sound money controlled by the people, and defend Alexander Hamilton’s loyalty to banking interests in the drive to create a private central bank to own our money supply.

Beneath all of Mr. Gordon’s flowery rhetoric, however, is a profound ignorance of a root problem in our money and banking system: fractional reserve lending. As I noted in an article last August, this ignorance in the mainstream media is nothing new, and par for the course:

http://blog.lawsonforcongress.com/2007/08/29/what-cnn-doesnt-understand-fractional-reserve-banking/

What’s wrong with fractional reserve lending? This article from June outlines the details:

http://blog.lawsonforcongress.com/2008/06/04/whats-the-problem-with-banks/

Once you understand the root of the problem, namely that banks are given a monopoly on the ability to create money out of nothing based solely out of someone’s promise to pay it back with interest, the tragic absurdity of our current situation becomes clear:

http://blog.lawsonforcongress.com/2008/07/11/may-you-live-in-interesting-times/

I’m especially grateful, though, for Dr. DiLorenzo’s rebuttal that puts Mr. Gordon’s revisionist history in the proper context:

The system of financial regulatory dictatorship that Gordon praises, and which is about to be forced down the throats of the American public, has been tried before in other countries. During one of its own periodic financial crises, Italian government officials complained bitterly, as Gordon does, of regulation that has been “disorganic” and “case by case, as the need arises.” The Italian regime altered its regulatory system so that it could pursue “certain fixed objectives,” just as Gordon argues for a “unified and coherent regulatory system.” This highly centralized or even dictatorial regulatory system, the Italians argued, would supposedly “introduce order in the economic field” and achieve the goal of “unity of aim” with regard to government regulation of industry.

All of the words in quotation marks in the preceding paragraph, except for the last ones, are the words of Benito Mussolini. The “unity of aim” phrase was from Mussolini apologist/propagandist Fausto Pitigliani. There is, after all, a very keen similarity between Hamiltonian mercantilism — or an economy directed and controlled by government, supposedly “in the public interest” but in reality for the benefit of a privileged few — and the economic fascism of Italy (and Germany) of the 1920s and ’30s.

I encourage you to read the rest of Dr. DiLorenzo’s article, and to evaluate the credentials of those who praise our Federal Reserve and banking system carefully — including my opponent. As with many corporate interests in Washington, the fox has been left guarding the henhouse.

Once you’ve read the explanations of how banking works, you’ll really enjoy the below cartoon (from Sinfest) that beautifully explains the bailout in action:

Ladies and gentlemen, we’ve been jacked.

[KeyLargo]

Let me know when you have the Reader’s Digest verions of your analysis.

Too much stuff.

I’m getting ready to be a serf of the Obama nation and want to keep my brain level at the Sunday funnies level and nothing more complex than that.

[SeeSharp]

Without the bailout: 
1. You don't pay your mortgage
2. The mortgage company forecloses
3. You get evicted
4. You start saving and rebuilding your credit

With the bailout:
1. You don't pay your mortgage
2. The mortgage company forecloses
3. You get evicted
4. The government pays the mortgage company
5. You pay higher taxes
6. Prices rise
4. You have less to save and take longer to recover

[Misschuck]

I’m getting ready to be a serf of the Obama nation and want to keep my brain level at the Sunday funnies level and nothing more complex than that.

LOL and thanks for that. My stomach is in an uproar. I was hoping the weekend would help but I need to work on my McCain/Palin call list. In between being zoned out in front of the tube.

[raygunfan]

ping for later....i just got the money masters tpes off ebay...ties it alltogether

[SecAmndmt]

Great post.