Category Archives: Economics

Babs Boxer Will Do Anything For Re-Election: Even Cosponsor S.604!

Activism, Currency and Monetary Policy, Economics, Election '10, Government Transparency, Inflation, Monetary Issues, Politics

Back in July, I sent letters to Barbara Boxer and Dianne Feinstein urging them to support or even cosponsor S.604, the Audit-The-Fed bill. I received the typical mealy-mouthed responses (posted below after the fold), and like a bad blogger I never actually mentioned the responses here. How mealy-mouthed was Boxer’s response? Well, THIS was the most substantive thing she said:

I believe that all citizens should become involved in the legislative process by letting their voices be heard, and I appreciate the time and effort that you took to share your thoughts with me. One of the most important aspects of my job is keeping informed about the views of my constituents, and I welcome your comments so that I may continue to represent California to the best of my ability. Should I have the opportunity to consider legislation on this or similar issues, I will keep your views in mind.

Great… You thank me for sharing my thoughts. I feel empowered!

What you don’t say is anything whatsoever regarding your opinion on the legislation (at least Feinstein gave me *something*). So how do I interpret your letter?

‘I’m gonna put my finger up in the air and see which way the wind blows, because I have a vulnerable seat in 2010 and I don’t want to piss anyone off. If I see any benefit to myself, I might at some point take a position on this legislation.’

So, today, when I was reading United Liberty, I was reminded of S.604, and decided to check to see if there were any surprises. And to my astonishment, there was! Barbara Boxer actually co-sponsored S.604!!

Do I think she’s really all that interested in an audit of the Federal Reserve? Not from the email response I received. But hey, she knows a populist wave when she sees one, and she’s gonna ride this one to Nov 2010.

There are a lot of forces assembling behind the Audit the Fed movement. Those forces are having traction. Enough traction, in fact, to get a California Democratic Senator to fall into line. It may be a political calculation, but if someone like Boxer has to make that calculation, it proves that there’s actually some real mojo here. Congratulations are due to Ron Paul, because without his tireless work in the House, we wouldn’t be this close to a serious review of what goes on at the Fed.
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Brad Warbiany
https://thelibertypapers.org/

Quote Of The Day

Economics, Fiscal Policy, Government Waste, Quote of the Day

From the WSJ:

The bottom line is this: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.

Government taking your money and spending it is less likely to help GDP than government taking LESS of your money and letting you spend the difference yourself.

Not that this is a new idea, of course… But it’s good to see some academic support.

Brad Warbiany
https://thelibertypapers.org/

End The Fed, Save America

Book Reviews, Currency and Monetary Policy, Economics, Theory and Ideas

It seems improbable that monetary policy could become a “sexy” political topic, but Ron Paul has done it. It started during his 2008 Presidential campaign when he continually talked about the Federal Reserve when asked about the economy, continued through his oft-entertaining interrogations of Fed Chairman Ben Bernanke, and most recently has culminated his sponsorship of H.R. 1207, a bill to conduct a General Accounting Office audit of the entire Federal Reserve System. It’s all pretty amazing actually; who would have ever thought that people would be getting excited over the Federal Reserve Board ?

In his new book End the Fed, though, Paul provides a clear, concise explanation for why we all need to be worried about the fiat paper money system that we’ve lived under for decades. As Paul says, the system itself is unsustainable over the long term, and Federal Reserve itself has contributed to economic instability in the 96 years since it’s founding.

This isn’t a detailed economic treatise, it’s a call to political action, and Paul does an excellent job of making his case for the argument that we need to bring an end to the monetary system that is, slowly but surely and inevitably, destroying us and destroying freedom. Instead, he argues that we need to return to the days of the Gold Standard, which doesn’t even need a central bank to function properly. You may disagree with the end scenario that Paul proposes, but it’s hard to disagree with his assertion that liberty in money is as necessary for a free society as liberty in thought or property.

Paul’s most important insight in this book, though, comes in his concise demonstration of how the “magical printing press” monetary system that we have today makes possible the leviathan state that is threatening to bankrupt us. Without a central bank with the ability to create money at will and in secret, it’s highly unlikely that the welfare-warfare state would be able to exist. Without free money, the state would be forced to either raise taxes or borrow money to finance it’s ventures and adventures and it’s unlikely that either taxpayers or bondholders the kind of unlimited spending that fiat money makes possible.

What this means is this — you’ll never have a truly limited government as long as you have a central bank with the power to create “money” at will.

That’s why it’s important to End the Fed, and that’s why this book is one that everyone should read.

Doug Mataconis
http://www.belowthebeltway.com

The Daily Show Illustrates the Shortsightedness of Government

Dumbasses and Authoritarians, Economics, Fiscal Policy, Government Incompetence, Government Waste, Humor, Media, Multimedia, Politics, The Welfare State, Theory and Ideas
The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Arizona State Capitol Building for Sale
www.thedailyshow.com
Daily Show
Full Episodes		 Political Humor Ron Paul Interview

The above video clip from The Daily Show, while very humorous, illustrates a fundamental problem of government: shortsightedness.

In this example, the State of Arizona is offering to sell the state capitol for $735 million and rent it back from the new owners.

“What happens next year when you have to pay rent?” asks Daily Show correspondent Jason Jones.

Sen. Lopez responds that the state government is more concerned about this year…they will deal with the next year’s budget (and subsequent budget) shortfalls when the time comes.

If this doesn’t illustrate the shortsightedness of government (at all levels), I don’t know what does. Our government officials do not look far beyond the immediate future (i.e. the next election). They don’t worry about the insolvency of Social Security, Medicare, Medicaid, the long term financial difficulties of the bailouts etc, they will worry about those problems (which they created and will also blame on the free market, big business, or lack of regulation) when they can no longer pretend the problem doesn’t exist. If they are lucky, the other party will be in power by that time and the American public will turn its anger against that party by voting them out.

What the American public needs to understand is that whether the blue team or the red team controls the levers of power, this shortsighted mentality is standard operating procedure for both. They are not interested in solving long term problems but trying to appear as though they are.

Politicians will not be accountable for their deceitful actions until we, the people, hold them accountable.

…I won’t hold my breath.

Stephen Littau
http://fpffressminds.blogspot.com/

Why You Should Support Auditing The Fed

Currency and Monetary Policy, Economics, Government Transparency, Hubris, Inflation, Monetary Issues

The Fed is tasked with the dual goals of price stability and restraining inflation. Folks like myself would suggest it hasn’t done a very good job of either, but that’s not crucial to the question of whether we should be able to determine how they’re attempting to fulfill their mission.

Particularly irksome when we’re talking about an audit is the fact that they’ve just admitted to engaging in gold swaps, influencing the gold price, in opposition to past denials and with the assertion that they should be able to continue hiding the specifics:

The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.

The Fed’s disclosure came this week in a letter to GATA’s Washington-area lawyer, William J. Olson of Vienna, Virginia (http://www.lawandfreedom.com/), denying GATA’s administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund’s treatise on gold swaps here: http://www.imf.org/external/bopage/pdf/99-10.pdf.)

Gold has been flirting with the $1000/oz level for several weeks (topping it a few times). Those in the gold market have long believed that central banks are suppressing the price to keep fears of inflation from hitting the roof.

How much longer do we have to allow the fed to lie to us, and then when we catch them red-handed, assert that they know well enough that we have to let them hide details on top of their lies?

I say we audit the fed. Then End The Fed.

Brad Warbiany
https://thelibertypapers.org/
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