I was saddened to see that the 'statesman' from New Hampshire resorted to attacking the ideas of Ron Paul with ridicule and gross distortions rather than logic. See for yourself:
This is a very important issue for America. It gets to the very heart of what is happening with our economy. One of the senators from Arizona, John Kyl, (the Republican Whip - the second ranking Senate Republican) also favors the secrecy for the Federal Reserve that is desired by senator Gregg.
I thought, in the interest of furthering discussion regarding the Federal Reserve in general and the Senate Sunshine Act (S 604) in particular, that I would post a letter I wrote to senator Kyl back in August of this year. The letter was in response to a note from one of his aids stating that the independence of the Federal Reserve was critical to protecting the reputation of the banks who were helped along with TARP funds/bailout monies. NOTE: I did not receive any reply to my letter (nor did I expect one). But, I think it is important to share the fact that people in powerful positions (like senators Gregg and Kyl) are really not interested necessarily in what is best for the people. If they were, there would be serious discussion of the ideas Ron Paul put forth today on CNBC at the very least (since congressman Paul is also in a position of power in our government).
I have come to expect those in power to ignore a simple taxpayer (i.e., me!) and give silence in response to a letter such as the one I sent (see below). But, it is another thing to see one of our elected officials engage in mockery openly in public debate; this is but one of the tools of intellectual cowards and I see it all too often.
With that, I guess I'm still hopeful, though:
"First they ignore you, then they ridicule you, then they fight you, then you win."
-A catchy phrase sometimes attributed to Gandhi, though it is not clear that he actually said it - still, it's catchy and appropriate, so I'm using it!
Letter (Now Open) to John Kyl, Senator of Arizona, Republican Whip
Please accept my sincere thanks for the letter you recently sent (10 August 2009) in response to my electronic message of that same day.
I must say, I was surprised at the brevity and also the lack of evidence for your position to support Fed secrecy. You mention again your support of "independence" for the Federal Reserve (an argument I've seen attributed to you previously). I fail to see this as an issue, because this (independence) is by default the case. The FED is a legalized cartel of private banks, and its independence is not in question by S604. Transparency is the issue, sir. I would appreciate an intelligent argument describing why you support secrecy in lieu of transparency.
I have a few points I wish to voice with respect to your response. First, the idea that the FED is making decisions independent of political or partisan pressures is, frankly, laughable. There are many examples of a compliant FED doing what is politically acceptable at various points in America's history with the organization working as our central bank. Notably these were at times of various foreign struggles or large-scale state interventions during the 1930's and 1960's, or when a chairman was up for reappointment.
Second, you wrote of and warned about inflation and monetization of debt for deficit spending, and that your support for FED "independence" is meant to somehow prevent "that kind of abuse." The facts don't bear this out. The US government has run a deficit every single year since the mid 1950's (some may think there was a surplus during the Clinton administration, but when one looks at the national debt during those years it still ROSE even though a surplus was reported due to IOUs paid into the Social Security trust and funds taken out to spend immediately). The FED has been complicit in this scheme all along, and therefore an argument that independence will somehow prevent "abuse" is unfounded as well. This "abuse" has been going on since 1913. In fact, the type of “independence” you support has had precisely the opposite effect that you hope it would achieve; it promotes excess government spending and malinvestment by corporations who know they may be bailed out by the government without so much as a public reckoning; this is an enabler of excess risk-taking, the brunt of the negative consequences being shoved over to taxpayers.
Also with regard to price inflation: Milton Friedman stated, "Inflation is always and everywhere a monetary phenomenon." The track record of the Fed on this issue is clearly a losing one when measured against its own mandate; the value of the dollar has declined precipitously and continues to do so as the FED balance sheet has ballooned with the purchase of mortgage backed securities, treasury debt and other financial instruments. The resulting decline in the dollar's purchasing power previously and also when excess reserves are loaned into the economy in the future has been (and will be) incredibly damaging on a wide scale. The current increases in the money supply (which are the purview of the FED and the FED alone) will be the catalyst for rising prices (price inflation) in our near future, just as this has been the case since the FED's inception. This runs counter to the FED's own mandate of stable prices, does it not?
Finally, any argument for FED independence in no way precludes transparency of the choice of utilization of funds, especially when these funds are ultimately taken from the taxpayers in the first place. The statement that transparency may cause the citizens to lose confidence in the aided institutions unnecessarily struck me as odd; should we not be concerned that our tax dollars are being handed over to failing corporate giants, barely able to stand under the weight of their own malinvestments? FED independence is not being questioned by S604; this is a simple matter of concerned citizens wanting to know where their tax dollars are being spent, or risked. Also of import is the fact that the passing around of many hundreds of billions or perhaps even trillions of dollars where the taxpayer assumes the risk but where private owners reap the profits is the very definition of economic Fascism (government/corporate partnership) according to 1930's thought. Any right to privacy should be lost the instant a company accepts bailout or financial "aid" money that puts the taxpayers at risk.
The American people are not some nameless, faceless, bottomless pit of labor to be wrung dry and replaced. When our dollars are risked, we have a right to know where, and for what reason. By its very design, a bailout with the shroud of secrecy you support places funds into the coffers of companies who are not doing well economically, due to a lack of efficiency or competitiveness in the marketplace, or in some cases due to outright mismanagement of capital.
In conclusion, I say again it is time for this redistribution of wealth from the working class to the politically-connected elite to see the light of day. I would appreciate a serious response which addresses the issue of secrecy with something other than the non sequitur of "independence". In reality, I’d love to have the chance to speak with you personally regarding this matter. It is a fascinating topic and I am willing to believe (at least for now) you truly wish to represent the people of Arizona. After all, does it not strike you as odd and worthy of further study that the Federal Reserve act was introduced by the father-in-law of one of the most powerful bankers and businessmen of the early 1900's (Nelson Aldrich, father-in-law to John D. Rockefeller)? It is time for the secrecy to end.
Sincerely,
Matt Novak, Ph.D.
If you (the one or two people who may have read this blog post in total!) are serious about wanting change in America, learn about the Federal Reserve System. Learn about it, and ask yourself why so many powerful people and well-paid academic economists with Ph.D. written behind their names are interested in protecting the secrecy of this government-granted monopoly in banking. Ask yourself why the dollar measured in 1971 purchasing power can only obtain 19 cents worth of goods in 2009. Then, start asking your friends those very same questions.
I believe the answers to these questions are the key to so many other issues - jobs, infrastructure, conservation of both the environment and natural resources, price inflation, safety and national security (which only come through liberty), and so much more. In a battle of ideas, it helps to read and learn many sides of an issue in order that you can share ideas to add to the discussion, rather than tagging people as "populist panderers" or the like!
I have been advocating for abolishing the FED for nearly 30 years and it is no more a reality now as it was in the 1980's. I do agree with your comments and feel that the only way we can get this abomination out of our wallets and bank accounts is to eductate and inform the people.
ReplyDeleteThe Internet provides a great method to do that but it will not happen all on its own. People like you and I need to keep their "feet to the fire" and make ending the FED the topic of discussion in all social gatherings.
Keep up the good work fellow patriot!