On Obama and "Prolonged Detention" - GOOD FOR RACHEL MADDOW

With "change" like this, who needs continuity ...

Ron Paul on HR 1207 - AUDIT (then end) THE FED!!

In his "Texas Straight Talk" column this week, here is Rep. Ron Paul (R-TX) re: his "audit the Federal Reserve" legislation (HR 1207). I'm glad to see he seems to be kicking the rhetorical aspects of his comments on this bill up a notch (or two). It's important to tell the truth about why this bill is so significant. I put the applicable sentences in bold text.

You can go to the column directly by clicking: HERE.

Oh, and if you don't want to read it, there's a video at the bottom where you can listen to it.

I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats. Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government.

Some have begun to push back against this bill, and I am very happy to address their concerns.

The main argument seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time. The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money – the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market. The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters.



Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve.

Detractors have also argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions. On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High-level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way.

As far as the foolishness of placing complex monetary policy decisions in the hands of politicians – I couldn’t agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again.

To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They [The Federal Reserve] have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so.

However, it is the responsibility of every member of Congress to represent the interests of the people that sent them to Washington and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it is in.

Support HR 1207. Tell your representatives you support it.

Ron Paul Interviewed on MSNBC

Erin O'Brien:

Ron Paul has come to the attention of MSNBC. According to the interview linked below (televised very recently), one of the MSNBC host fellows - Joe Scarborough - even quoted Ron Paul in a recent book.

Because Ron Paul correctly predicted the mortgage crisis in 2003. Ron Paul told members of the House Banking Committee what would happen. And he was right.



I just thought you'd like to know.

Thank you for your consideration.

Yours,

Garrett

On How Awesome Is The Internet - Part 1

How awesome is the internet? It's really, really awesome. Because bad guys get to say bad things to a wide audience, but good guys can say good things in response. Often in the same place. And in real time (or approximately in real time).

What a great arrow in the quiver of truth and freedom.

Here's today's example:

At one minute after midnight this morning (May 13, 2009), Forbes.com published an article by a fellow named Thomas F. Cooley (a distinguished looking fellow - bespectacled ... bearded): T. Cooley's article (link).



In the article, T. Cooley argues that the Federal Reserve ought to be left alone. That it ought not be subjected to the audit those pesky elected representatives seek with H.R. 1207 [1], which legislation calling for a meaningful audit of the Federal Reserve (i.e., what has the Fed been doing with the trillions of dollars it has created in recent months?).

Among other things, Cooley says in conclusion:

Anything that threatens the independence of the Fed threatens the long-term viability of monetary policy. It is really important that the expanded role of the Fed in the current crisis not threaten that viability. An independent Fed can pursue policies that are politically unpopular yet in the public interest. We need central banking to be boring again, not something that keeps us on the edge of our seats.

If he wanted to say something TRUE, he should have left the first six words of the first sentence of the quote above out. Instead he says something expedient for The Establishment. Which is what the whole article is about.

Pimping for the man (the Fed).

(One of most remarkable things Cooley says, by the way, at least from the point of view of readers living in objective reality, is that: "Without independence, the political cycle would subject the central bank to political pressures that, in turn, would impart an inflationary bias to monetary policy." Assuming Mr. Cooley knows that since the Fed was created in 1913, the purchasing power of one U.S. dollar has gone down by 95%, there is PLENTY of inflationary bias to the Fed's monetary policy even with the quantum of so-called "independence" the Fed has at present.)

Happily, though, we can now (finally) get to the part of this note wherein we celebrate the awesomeness of the internet.

People are leaving comments on Cooley's article: click here for comments.

And folks are tearing Cooley's article to shreds. And noting Cooley's connections to the political-class (i.e., folks who benefit from the Fed running its business the way it currently runs its business).

Then nine minutes before 9:00 a.m. this morning, Lew Rockwell posted a note on the LRC.com blog linking to Cooley's article: Lew Rockwell blog post (link).

There were thirty-eight comments when I last checked (a couple minutes before publishing this blog post). I didn't see one comment in support of Cooley's propaganda piece. Thank goodness.





[1] H.R. 1207 was introduced in the U.S. House of Representatives by Dr. Ron Paul (R-TX). There is also a version of the bill in the U.S. Senate called the "Federal Reserve Sunshine Act of 2009" having been introduced by Senator Bernie Sanders (D-VT)). For the curious, click here to read the Wikipedia page about the bill.

On The REAL Lessons of History - Part 1

The topic today is government intervention -- bailouts.

One person talking quite a bit about bailouts these days is President Obama. Among the things he's saying is that we ought to be learning the lessons of history.

And I couldn't agree more.

And one person who is a part of history is Warren Harding, formerly President of the United States. Now Harding was a lot of things, many of them not complimentary. At least according to Wikipedia.



For example, Harding wrote his own speeches. And critics thought he oughtn't. H.L. Mencken, for one, had this to say about Harding's writing:

"He writes the worst English that I have ever encountered. It reminds me of a string of wet sponges; it reminds me of tattered washing on the line; it reminds me of stale bean soup, of college yells, of dogs barking idiotically through endless nights. It is so bad that a sort of grandeur creeps into it. It drags itself out of the dark abysm of pish, and crawls insanely up the topmost pinnacle of posh. It is rumble and bumble. It is flap and doodle. It is balder and dash."

As an aside, I find "dark abysm of pish" to be a particularly good turn of phrase.

But one other thing about Warren Harding -- which I did not see mentioned at all in the Wikipedia entry about him -- is that he was a decent economist.

Harding was President during the depression of 1920-1921.

But he did engage in government intervention in a futile and damaging attempt to "fix" things or "stimulate" the economy. He understood that such intervention would make matters worse.

But don't take my word for it.

Have a look at this important article by Tom Woods (author of the New York Times Bestseller Meltdown on the topic.

Woods includes here words straight out of Harding's mouth -- direct quotes of a man who wrote his own speeches.

Like this one:

We promise that relief which will attend the halting of waste and extravagance, and the renewal of the practice of public economy, not alone because it will relieve tax burdens but because it will be an example to stimulate thrift and economy in private life.

But I think the most important part of Tom Woods' article is this:

The very ideas of fiscal and monetary stimulus stem from a misdiagnosis of the causes of economic depressions and then apply exactly the wrong remedies. The problem is not with an inadequate level of spending, but that in the wake of a central bank-induced boom, the capital structure is out of conformity with consumer demand. The recession is the period in which this mismatch is rectified through the reallocation of capital into more appropriate channels. Fiscal and monetary stimulus only interferes with and delays this purgative process.

By the way, another brick in the wall of the lessons we ought to be learning from the Depression of 1920-1921 is the experience of Japan during that time.

According to Woods, Japan's government intervened vigorously in the depression Japan experienced during 1920-1921. With the (predictable) result that the Japanese economy was paralyzed from the early 1920s until seven years later when Japan had another terrible banking crisis.

History is there to instruct.

The U.S. experience -- a very quick and robust economic recovery after a terrible and devastating collapse -- during the 1920-1921 depression can teach us a great deal.