Posted on 06/06/2009 9:00:28 PM PDT by sickoflibs
Money and Politics By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA and other intelligence operations are under control of the Congress. They are accountable: a Congressional committee supervises these operations, controls their budgets, and is informed of their covert activities. It is true that the committee hearings and activities are closed to the public; but at least the people's representatives in Congress insure some accountability for these secret agencies.
It is little known, however, that there is a federal agency that tops the others in secrecy by a country mile. The Federal Reserve System is accountable to no one; it has no budget; it is subject to no audit; and no Congressional committee knows of, or can truly supervise, its operations. The Federal Reserve, virtually in total control of the nation's vital monetary system, is accountable to nobody — and this strange situation, if acknowledged at all, is invariably trumpeted as a virtue.
Thus, when the first Democratic president in over a decade was inaugurated in 1993, the maverick and venerable Democratic Chairman of the House Banking Committee, Texan Henry B. Gonzalez, optimistically introduced some of his favorite projects for opening up the Fed to public scrutiny. His proposals seemed mild; he did not call for full-fledged Congressional control of the Fed's budget. The Gonzalez bill required full independent audits of the Fed's operations; videotaping the meetings of the Fed's policy-making committee; and releasing detailed minutes of the policy meetings within a week, rather than the Fed being allowed, as it is now, to issue vague summaries of its decisions six weeks later. In addition, the presidents of the twelve regional Federal Reserve Banks would be chosen by the president of the United States rather than, as they are now, by the commercial banks of the respective regions.
It was to be expected that Fed Chairman Alan Greenspan would strongly resist any such proposals. After all, it is in the nature of bureaucrats to resist any encroachment on their unbridled power. Seemingly more surprising was the rejection of the Gonzalez plan by President Clinton, whose power, after all, would be enhanced by the measure. The Gonzalez reforms, the President declared, "run the risk of undermining market confidence in the Fed."
On the face of it, this presidential reaction, though traditional among chief executives, is rather puzzling. After all, doesn't a democracy depend upon the right of the people to know what is going on in the government for which they must vote? Wouldn't knowledge and full disclosure strengthen the faith of the American public in their monetary authorities? Why should public knowledge "undermine market confidence"? Why does "market confidence" depend on assuring far less public scrutiny than is accorded keepers of military secrets that might benefit foreign enemies? What is going on here?
The standard reply of the Fed and its partisans is that any such measures, however marginal, would encroach on the Fed's "independence from politics," which is invoked as a kind of self-evident absolute. The monetary system is highly important, it is claimed, and therefore the Fed must enjoy absolute independence.
"Independent of politics" has a nice, neat ring to it, and has been a staple of proposals for bureaucratic intervention and power ever since the Progressive Era. Sweeping the streets; control of seaports; regulation of industry; providing social security; these and many other functions of government are held to be "too important" to be subject to the vagaries of political whims. But it is one thing to say that private, or market, activities should be free of government control, and "independent of politics" in that sense. But these are government agencies and operations we are talking about, and to say that government should be "independent of politics" conveys very different implications. For government, unlike private industry on the market, is not accountable either to stockholders or consumers. Government can only be accountable to the public and to its representatives in the legislature; and if government becomes "independent of politics" it can only mean that that sphere of government becomes an absolute self-perpetuating oligarchy, accountable to no one and never subject to the public's ability to change its personnel or to "throw the rascals out." If no person or group, whether stockholders or voters, can displace a ruling elite, then such an elite becomes more suitable for a dictatorship than for an allegedly democratic country. And yet it is curious how many self-proclaimed champions of "democracy," whether domestic or global, rush to defend the alleged ideal of the total independence of the Federal Reserve.
Representative Barney Frank (D., Mass.), a co-sponsor of the Gonzalez bill, points out that "if you take the principles that people are talking about nowadays," such as "reforming government and opening up government — the Fed violates it more than any other branch of government." On what basis, then, should the vaunted "principle" of an independent Fed be maintained?
It is instructive to examine who the defenders of this alleged principle may be, and the tactics they are using. Presumably one political agency the Fed particularly wants to be independent from is the U.S. Treasury. And yet Frank Newman, President Clinton's Under Secretary of the Treasury for Domestic Finance, in rejecting the Gonzalez reform, states: "The Fed is independent and that's one of the underlying concepts." In addition, a revealing little point is made by the New York Times, in noting the Fed's reaction to the Gonzalez bill: "The Fed is already working behind the scenes to organize battalions of bankers to howl about efforts to politicize the central bank" (New York Times, October 12, 1993). True enough. But why should these "battalions of bankers" be so eager and willing to mobilize in behalf of the Fed's absolute control of the monetary and banking system? Why should bankers be so ready to defend a federal agency which controls and regulates them, and virtually determines the operations of the banking system? Shouldn't private banks want to have some sort of check, some curb, upon their lord and master? Why should a regulated and controlled industry be so much in love with the unchecked power of their own federal controller?
Let us consider any other private industry. Wouldn't it be just a tad suspicious if, say, the insurance industry demanded unchecked power for their state regulators, or the trucking industry total power for the ICC, or the drug companies were clamoring for total and secret power to the Food and Drug Administration? So shouldn't we be very suspicious of the oddly cozy relationship between the banks and the Federal Reserve? What's going on here? Our task in this volume is to open up the Fed to the scrutiny it is unfortunately not getting in the public arena.
Absolute power and lack of accountability by the Fed are generally defended on one ground alone: that any change would weaken the Federal Reserve's allegedly inflexible commitment to wage a seemingly permanent "fight against inflation." This is the Johnny-one-note of the Fed's defense of its unbridled power. The Gonzalez reforms, Fed officials warn, might be seen by financial markets "as weakening the Fed's ability to fight inflation" (New York Times, October 8, 1993). In subsequent Congressional testimony, Chairman Alan Greenspan elaborated this point. Politicians, and presumably the public, are eternally tempted to expand the money supply and thereby aggravate (price) inflation. Thus to Greenspan: ....
rest of article at :The Case Against the Fed
“our present trivial problems”
“all of them readily addressable by simple limited reforms”
I don’t know a single intelligent conservative or liberal who believes that our problems are trivial.
I don’t know a single informed, discerning intelligent conservative who believes that our problems are all readily addressable by simple limited reforms.
What do you make of the many conservatives, independents, libertarians, constitutionalists and (even some Obama voters I know) who are clearing sporting good store shelves of weapons & ammo in common self-defense and sporting calibers?
And survivalist nutjobs are ignorant knuckledragging morons, not to put too fine a point on it. Nothing remotely conservative about them.
Once there was a man named Ronald Reagan, who knew that freedom and capitalism would always win in the end because they are the only thing that actually works. And all the delusions of the left are too pathetic to last.
Now instead, knuckledragging doom-mongers pretend to be "conservative" as they run around screaming that the sky is falling, because their 401ks are worth the same amount they were 5 years ago. And oh no, their houses maybe only what they were worth 8 years ago. The horror, the horror.
It is all utter nonsense. Worry about Iran and proliferation. Worry about the political relevance of the republican party. Worry about the state of public school education.
But pretending that the world is ending because there is an economic recession or a milquetoast Chicago pol won one election, is too cowardly to be tolerated in something trying to pass itself off as a man.
A mighty world empire vastly stronger than us has invaded the country and burned the capitol to the ground. Contemporary attitude of an actual American man? Writes "Oh say does that star spangled..." you know the rest.
Tragic domestic conflict has gone beyond politics and killed over a half million men in years of endless war between brother and brother. Contemporary attitude of an actual American man? Sing out "mine eyes have seen the glory of the coming of the Lord..." you know the rest.
Half the American fleet lies destroyed in a matter of hours, as triumphant enemies spanning the globe are destroying every potential ally in sight. The army is smaller than Romania's. Contemporary attitude of an actual American man? Sing "praise the Lord and pass the... " you know the rest.
A hostile tyrant responsible for as much spilled human blood as any in history is given nuclear weapons by traitorous spies, then provokes his proxies to attack American allies. When those are defeated much larger ones, newly lost with incompetence bordering on treason to a hideous ideology, attack as well and rout American forces. Attitude of a contemporary American man? "The real issues are whether the power of Western civilization, as God has permitted it to flower in our beloved lands, shall defy and defeat Communism; whether the rule of men who shoot their prisoners, enslave their citizens, and deride the dignity of man, shall displace the rule of those to whom the individual and his individual rights are sacred...." you may not know the rest, but Matt Ridgeway didn't run away screaming.
An unhinged madman with nuclear weapons on brand new advanced missiles, 30 minutes flight time from every American city, takes off his shoe in a diplomatic gathering and bangs the table screaming "we will bury you!" Actual attitude of a contemporary American man around that time? "America will bear any burden, pay any price, support any friend, fight any foe, to ensure the survival..." you know the rest.
Domestic defeatists insist on leaving allies to slaughter at the hands of implacable enemies after a decade of war, the stock market crashes, inflation runs out of control, crime is soaring, minor countries fall all across the world, a pathetic excuse for a president sits and does nothing as American diplomats are held hostage, then bungles a rescue. Attitude of a contemporary American man? "I believe we shall rise to the challenge. I believe that communism is another sad, bizarre chapter in human history whose last pages even now are being written. I believe this because the source of our strength in the quest for human freedom is not material, but spiritual. And because it knows no limitation, it must terrify and ultimately triumph over those who would enslave their fellow man. For in the words of Isaiah: "He giveth power to the faint; and to them that have no might He increased strength . . . But they that wait upon the Lord shall renew their strength; they shall mount up with wings as eagles"...
Unprincipled socialist trimmer narrowly wins election in the middle of a financial crisis, plus a recession. Contemporary attitude of hysterical doom mongers playing at being men? "Run for your lives, it's the end of the world!"
Which of these things is not like the others? Which isn't the act of a *man* ?
If the financial crisis were a battle, you would make a great General Custer.
BTW, I've read many of your posts concerning economics and they are very good. I think your take is with people having the tendency to over react with your focus on the survivalists' mindset (overreaction) causing an accelerated impact upon the economy.
Regardless, our federal goobermint is doing the wrong things now to strengthen our economy.
Government isn't the solution, it's the problem.
We will not see a bottom until after this time next summer if we are lucky.
The CDS, CDO & their derivatives false economy has led to this global problem with a global credit bubble bursting like never seen before. The chickens are coming home to roost now and the foxes are hiding, waiting, and hungry.
What is coming at the bottom hasn't been seen since 1929.
Actually, although Obama is the worst, the results of the last 5 presidential elections have pretty much s*cked.
Well said, Jason!
Hear, hear!
Jason - I rarely bother to post, but this was a wonderful response.
I follow you and a few others here daily, and I appreciate your insightful comments.
I’m saddened that so few here ever come to your defense.
But take heart that there are some people out there who are listening.
Perhaps more than you know.
Perhaps because from post 1, with whomever he argues, Jason acts like an pompous, condescending ass. The same people who would applaud Jason's rude and supercilious behavior, would also likely hail the arrogant behavior of "The One". Fortunately there aren't many of those type of people on FR.
You can count me among them.
He also argues straight out of the Statists-R-Us playbook and talking points memo. It’s as if he’s never heard of the Constitution, the Founding Fathers and small, LIMITED government. For sure he’s never READ the Constitution or he’d be aware that 90+% of what FedGov does is NOT ALLOWED by the Constitution, INCLUDING the Central Bank system.
“because their 401ks are worth the same amount they were 5 years ago”
How is the civil service pension plan holding up?
Most normal people (ie. no lunches at the Harrow club, no bananas in the tailpipe etc) do get concerned when their savings are down by 50%, unemployment is at least double the norm (but not in DC!), debt levels are high, and inflation is on the horizon.
But I pledge to stop all the negative thinking about the fraud, racketeering, theft, deception and men hidden behind curtains (etc) emanating from the upper branches of government and start thinking positively and focusing on all the things that you say I should be worried about.
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