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To: rabscuttle385

No, government is the cause and Ron Paul is part of that government. Always trying to blame others and never admitting that government is the real problem.


7 posted on 10/21/2011 10:22:38 AM PDT by mulligan
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To: mulligan

The Fed is part of the government.


8 posted on 10/21/2011 10:25:03 AM PDT by rabscuttle385 (Live Free or Die)
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To: mulligan
"..Ron Paul is part of that government."

Ron paul is one of a very few who actually stand up to the "establishment" when questioning the Fed and others.

He votes against the establishment so often, his nickname on Capitol Hill is "Dr. No".

28 posted on 10/21/2011 2:40:33 PM PDT by Designer (Nit-pickin' and chagrinin')
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To: mulligan; rabscuttle385
Ron Paul: Blame the Fed for the Financial Crisis

You can always count on Johnny-One-Note "End the Fed, the root of all evil" Ron Paul to provide a stupid cover to Obama and the Democrats.

The Federal Reserve, like most other central banks (e.g., Bank of Canada, Bank of England, Bank of Japan, Reserve Bank of Australia, Swiss National Bank, European Central Bank / ECB) are set up as [and supposed to be] independent of political influence and should not be subject to political blame-shifting finger-pointing.

The Fed didn't create FHA. The Fed didn't create Fannie Mae and its later spinoff Freddie Mac, to provide mortgage financing for FHA loans (in effect, creating original MBS market). The Fed didn't create HUD. The Fed didn't create Community Reinvestment Act (CRA) which mandated that banks must make unqualified loans to unqualified applicants if they intended to stay in business. The Fed didn't threaten the banks to make even more egregious loans under Clinton administration's (Janet Reno's DOJ and Andrew Cuomo's HUD) onerous enforcement of "minority community ownership" under additional CRA mandates. The Fed also didn't make the Bush administration's appeals for "ownership society."

The Fed might control short-term interest rates and (under then-Chairman Alan Greenspan) did correctly lower them during nascent recession after 2000 markets crash, and even further after 9/11 attacks and crash to prevent deeper recession, but ST Fed rates do not necessarily affect long term mortgage rates (though they often move in the same direction, yet not necessarily with the same velocity) and any downward move in rates is commonly described as "pushing on a string" because lower rates in and of themselves cannot be a primary cause of spending, though it may help spur buying decisions of any assets or wares - which is exactly its desired effect in recessions or slowing economy. If low interest rates were the primary cause of the bubble in one asset class (in this case, real estate) they would also create bubbles in other asset classes which didn't happen - for example, the rates weren't the primary reason for Internut bubble and stock market crash. To blame the Fed for doing what the Fed is supposed to do is silly and not worthy of any presidential candidate.

In addition to having nothing to do with the practically inevitable - in absence of reforming and downsizing Fannie and Freddie and sunsetting CRA - mortgage financing meltdown caused by the government laws, mandates, regulations, numerous agencies and especially GSEs (Government Sponsored Enterprises Fannie Mae and Freddie Mac) who went all out to facilitate the "ownership society" while having guarantees of playing with the taxpayers money, the Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson had to take truly exceptional and measures (TARP, TALF and other loan facility programmes) to provide necessary liquidity and forestall the run on the banks and other financial institutions to prevent collapse of the U.S. and probably worldwide financial system as we know it.

Extraordinary times call for extraordinary measures and the Fed and Treasury delivered while Congress dithered and financial system and the banks - and along with it, many companies who thought their "cash or equivalent" were safe, pensions and individual money market and savings accounts - were burning.

Even if Republican politicians can't understand this or do understand but feel that they have to pander to the "no bailout" pundits (who can't bring themselves admit they were wrong about so-called "bailout" because government apparently shouldn't do anything, even when it's something government is eminently responsible for like stability / security / safety of functioning financial and banking system) the attack on the Fed and Bernanke is politically naive.

If it is the Fed that is to blame for the financial crisis, then that leaves Barney Frank, Chris Dodd, Jamie Gorelick, Franklin Raines, Jim Johnson, Andrew Cuomo, Barack Obama, Bill Clinton, Jimmy Carter, Franklin D. Roosevelt and many other political "actors," off the hook for being a part of creating this slow-motion disaster-in-waiting that culminated in one of the worst world-wide financial crises.

Which means that Obama's and Democrats' mouthpieces can claim any bump in the economy is due to one of their many "stimulus" programmes while any problems, including stubborn unemployment, was due to "disastrous" decisions and actions of the Fed, and the Stupid Party would look just as dumbfounded as it usually does when Dems use their own statements to turn tables on them. As usual, misguided Republicans are their own worst enemies.

"We often give our enemies the means of our own destruction" - Aesop

If they can't say anything good about the Fed helping to save U.S. financial system from the run on the banks and the vicious deflation cycle, they'd better keep silent or evasive on the subject.

See more on this in my post Opponent Is Obama, Not Bernanke - FR post #15 / IBD, 2011 October 18

38 posted on 10/21/2011 8:49:16 PM PDT by CutePuppy (If you don't ask the right questions you may not get the right answers)
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