Posted on 09/10/2009 2:52:55 AM PDT by rabscuttle385
Near the start of this year Ron Paul (R-Texas) introduced H.R. 1207, the Federal Reserve Transparency Act of 2009. The bill was referred to the House Committee on Financial Services. As of this writing, H.R. 1207 has 282 cosponsors.
A Senate equivalent, S.604, the Federal Reserve Sunshine Act of 2009, has been introduced by Bernie Sanders (I-Vt.). It has 23 cosponsors. Both bills have received a tremendous groundswell of grass-roots support. Much of the support is coming from ordinary people who have become aware of the fact that the Federal Reserve has created trillions of dollars literally out of nothing during the past calendar year in its effort to micromanage its way out of the worst economic crisis since the Great Depression.
If such a measure were passed by both houses of Congress and signed into law by President Obama, the resulting bill would allow the Government Accounting Office to conduct audits of Federal Reserve System monetary policy. The bill proposes to scrutinize the Feds dealings not just on domestic monetary policy but on dealings with foreign central banks and foreign governments.
The power elite is worried. Evidence for this can be found in a short article "The Fed's Political Problem" appearing on the website of Foreign Affairs, flagship journal for the Council on Foreign Relations (CFR). The article's author, Alan S. Blinder, is a senior-level economics professor at Princeton University who also directs Princetons Center for Economic Policy Studies. From 1994 to 1996 he served as vice chairman of the Board of Governors of the Federal Reserve System.
Blinder first argues a thesis he proposed back in 1997, that some areas of government are properly political and others are properly technocratic. He places monetary policy in the latter, where it can operate independently of political oversight. The drawback of Ron Pauls bill is that it would transfer Fed oversight to the political realm and end its independence.
Blinder describes Dr. Paul as an extreme libertarian and longtime foe of the Fed. He has, incredibly, persuaded almost two-thirds of the House of Representatives to co-sponsor a bill that would jeopardize the Feds independence. According to Blinder, the Fed gets plenty of critical evaluations of its policies and decisions. He maintains that Dr. Pauls bill could easily develop into something quite dangerous. He imagines this scenario:
Sometime in 2010, the Fed, wanting to avoid inflation, will likely begin to abandon the hyper-expansionary monetary policy it adopted during the recent crisis as a way to stave off a depression. As it does so, interest rates will start rising even as unemployment remains high. Predictably, Congress, being more closely attuned to public opinion, will be unhappy with this situation. Until now, the Feds independence has ensured that it can afford to ignore public opinion and take such necessary but unpopular economic measures. That is precisely why we want an independent monetary policy. But if the Paul bill passes, angry members of Congress could ask for a GAO audit. And, if the report is critical, they could use it to browbeat members of the Federal Open Market Committee, the Feds interest-rate-setting body, for killing the countrys economic recovery.
This misses the key argument Ron Paul has been making, which follows those of members of the Austrian school of economics (e.g., Ludwig von Mises). What Blinder euphemistically calls hyper-expansionary monetary policy actually is inflationary, if we understand inflation to be not merely rising prices but an increase in the amount of fiat currency in circulation. Mainstream economics has long preferred the public to see inflation almost exclusively in terms of visibly rising prices. If prices aren't rising, economists can maintain that inflation is low even though the money creation spigot is going full blast as it has been since the economic crisis began a year ago.
If we understand inflation as an increase in the money supply, however, we see immediately that the Fed, far from being a controller of inflation, is actually an engine of inflation. Rising prices in this case are just one possible effect of monetary inflation. The Fed is responsible for the long-term decline in purchasing power of our dollars, which have been backed literally by nothing except legal tender laws and the willingness of the public to accept them since 1971, the year President Richard Nixon severed the last ties between the dollar and gold. Fed monetary policy is the reason a hamburger costs you several dollars when your grandfather could buy one for thirty-five cents. The dollar has lost slightly over 96 percent of its value since the Federal Reserve System was created in 1913. The national debt has soared during the period since 1971 from a few hundred million to its present $11.8 trillion. Millions will be added to the debt during the brief time it takes to read this article!
The dollars value will drop considerably more should it lose its status as the worlds reserve currency. The Chinese are getting very nervous about the money-creation spigot in Washington, D.C. Perhaps these are the kinds of developments that elites such as Blinder dont want the public to know about. Clearly the elites are uncomfortable with the amount of attention the Fed has received the public being aware of the trillions having been created literally out of thin air during the past year. What will this do to the long-term purchasing power of my money? is a perfectly valid question many ordinary Americans are asking.
What are the prospects for H.R. 1207 and S. 604? Even if these bills pass and a compromise bill reaches President Barack Obamas desk, it is difficult to imagine him even considering signing it. The effort to bring more of the Feds activities into the light of day may receive a new ally in the Senate late next year, however, as Ron Pauls son Rand Paul has announced his candidacy for one of Kentuckys two slots and raised $815,000 as of this writing. Like father, like son: Rand Paul is also highly critical of the lack of transparency that characterizes crucial decisions made by the Federal Reserve and has vowed, if elected to the Senate, to work to shed light on this secretive organization." He reminds us of the trillions the Fed has created out of thin air and adds, The American people have a right to know to whom this money was given. For all its talk of transparency the current administration has done nothing to tear the shroud off the Fed.
“The New American” is a John Birch Society publication.
A puff piece for Cindy Sheehan’s favorite “republican”, regarding a bill pushed by Barney Frank and declared socialist Bernie Sanders. What could possibly go wrong.
>>>The New American is a John Birch Society publication.
Just in the last couple of weeks I’ve noticed various Bircher memes posted, mostly by new signups. I wondered if Kos was having another contest trying to put FR in a bad light with troll posts. But maybe instead the hoods are finally just coming off revealing who is what.
In the old days the Birchers attacked men such as Ike, accusing him of being a communist. The modern version seem to likewise spend most of their time attacking and undermining republicans. Essentially serving as a fifth column for the Obama’s of the world.
Bill Buckley had it exactly correct. Conservatism didn’t have a chance until the old Birchers were tossed aside into the trash where they belonged. History may need to repeat itself.
If the CFR (open globalists) oppose it, it must be good
Yes, because the neoconservatives did SUCH a great job! </s>
‘Bill Buckley had it exactly correct. Conservatism didnt have a chance until the old Birchers were tossed aside into the trash where they belonged. History may need to repeat itself.’
Obviously we live in different worlds.
Fascism, Globalist, Big Brother is on the march and your implying some how that Buckley is right?
A Republican and a Conservative are not the same.
The Republicans have been the problem, not ‘Birchers’.
Open Borders, Billions for Aids to Africa, giving hundreds of Millions to the PA, Bailing out Corporations, TARP, Amnesty, DHS, etc.
Yeah, keep it up.
“If the CFR (open globalists) oppose it, it must be good”
Agreed!!!
Of course Dr. Paul is highly esteemed therein.
Take a look at this list and see who might be disgruntled by a Fed audit.
http://www.stopthenorthamericanunion.com/CFRMembers2008.html
Buckley morphed himself into a neo-conservative and proved it when he stood solidly behind Jimmie Kahtah and endorsed the giveaway of the Panama Canal which is now manned by the Chicoms.
It was at that time that I canceled my subscription to NR and stopped listening to Buckley debates where syntax was as garbled as a New Deal Democrat.
You haven't been very observant then. New Republic articles have been posted here by readers on a regular basis whenever the article's content was germane to a current topic.
And sponsored by every single last republican in the U.S. House and by some of the most conservative people in the U.S. Senate like Jim DeMint and Tom Coburn.
The majority of this bill's co-sponsors are republicans.
On yeah, we could trust Buckley.
http://www.modernhistoryproject.org/mhp/EntityDisplay.php?Entity=BuckleyWF2
I could care less about the John Birch Society, one way or the other, they are out of power, and quite likely to remain that way in the future. Does that mean that the truth revealed in this article should be disregarded all together/
Central bankers have created every single recession/depression that has ever happened in the world. The banks are directly responsible for creating bubbles in our economy through their manipulations of the price of currency, then causing these same bubbles to burst through manipulation in the opposite direction, trying to control inflation by removing the excess of fiat currency that they had injected into the economy.
My advise to anyone as concerned as I am over current events in our country, convert your US dollars to precious metals: gold, brass, and lead.
I’d forgotten about one of those associations by the great orator.
Makes me wonder about Limbaugh. Buckley was his hero.
I do believe Rush is having some revelations.
If Rush would consider just one action on Buckley’s part: the Panama Canal fiasco which should be enough to rethink Buckley’s phony conservatism.
Yep. Sometimes we overlook the obvious.
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