Congressman Paul takes on the Fed during his opening statement at today's House Financial Services Committee hearing on Fed bank supervision and monetary policy.
In the past Bernake said full employment and controlled inflation was the goal of the FED. He added price stability today - another way to say inflation, I suppose.
Just one time I would like someone to state the real purpose of the FED - THEFT!
For some reason when I heard Bernanke say that "maximum employment" was one of the Fed's mandates, it just dawned on me how communist that is. An arm of the federal government has absolutely no business directing employment in the private sector.
When Bernanke said that every major economy has a central bank Paul should have said something like, "well if everyone were jumping off a bridge would you do it too?" Bernanke is a kid, gotta treat him like one.
Posted 03/17/10 4:18 PM Isomies Mechanicsville, VA
I thought the questioning was excellent, and the responses less than satisfactory.
An Art..??? sure, and continue to play around with the clay we get to clean up after your done "creating".
Posted 03/17/10 8:26 PM BruceKoerber Cedar Rapids, IA
http://moneyandethics.blogspot.com/
Wednesday, March 17, 2010
Ron Paul Uproots Bernanke's Economic Fallacies In Five Minutes.
A kindly conversation trying to get Ben Bernanke to explain the economics behind the decisions of the Federal Reserve!
Congressman Ron Paul builds the argument that everyone has now acknowledged that the interest rates were held to low for too long. And what does Bernanke think about that? In a slippery way he acknowledges it but he says that the real problem was a lack of regulations.
Dissenting but then continuing to question Bernanke about his knowledge of economics, Congressman Paul talks about the universal consensus that fixing prices and wages does not work and that central planning of the economy always fails which is why socialism fails. Congressman Paul then makes clear the fact that the interest rate is a price.
Next Ron Paul asks Bernanke to discuss how businesses and investors decide what to do if they are getting false signals in the form of fixed interest rates. Bernanke, obviously 'schooled' by Ron Paul just utters a nonsensical answer and then plays the blame game: "well all the central banks do it that way."
In a mere five minutes Ron Paul completely destroyed all of Bernanke's fallacies. Ben Bernanke is an economic ignoramus and yet he is the one deciding the monetary policy for the United States. Actually he is the monetary policy figurehead, merely doing the bidding of the unConstitutional coup. He is the chief counterfeiter for their counterfeiting operation.
P.S. Did you notice Bernanke cringe when Ron Paul said that he is a supporter of gold as the Constitutional money!!!
This should be the headline story in every paper tommorow mourning. Instead it will fade into the past and the next economic bust will happen leaving millions of people unaware of "how it happpened". I would like to thank Congressmen Pauls run for president that woke me up to alternate economic theories. Now I have a good grasp of Austrian Economics and constitutional government. Dr.Paul, I urge you to run for President again. I believe more people like myself will continue to wake up and educate themselves.
I can't get myself to believe that Bernanke is that stupid. I think he is just doing the best he can to refute the free market so they can maintain central control of the economy. It has to be difficult for Bernanke to realize that Paul is right about everything and to come up with a suitably fabricated lie for each response.
I too was only awakened by Ron's '08 bid. The best thing we can do is educate those around us and not demonize someone with an opposing viewpoint. Thanks for this post....I'm sure when the next crisis hits in 2 years this video will help people realize the truth. The markets are being distorted and when they correct the next time we won't have a line of credit to fall back on.
Well Played. I think Dr. Paul recognizes that these low interest rates will be a problem in the future, and is forcing Bernanke to produce some choice soundbites to be used against him and the Fed at a later date. I also think Dr. Paul should run again for President in a few years. Though victory may be doubtful, I believe it's important that he continues to spread the message of liberty and sound money. End the Wars, End the Fed.
Posted 03/17/10 11:39 PM Sally Oh Escazú, Costa Rica
I could listen to Dr. Paul all day. Great job, today! BB is a jack in the box... until we can get the media educated or fire up enough to report the truth, we need to vote in more Liberty Candidates!
http://www.liberty-candidates.org! Find the candidates in your state who will support constitutional governance.
Not to take our eye off the ball; any interest SET by the FED is price fixing and not free market. If there was no FED there would be no lender of last resort.
Then, when you went in for a house loan your friendly banker would expect you to come up with 30% down and pay an interest of about 5 to 6% to cover his expenses and profit. And, guess what? The house would be built better because with that kind of vested interest you would make sure of that.
The free market produces steady quality growth. Easy credit serves political interests and always results in shoddy product.
Posted 03/18/10 02:18 AM abjectivist Springport, MI
Sometime during the educational opening statements I would like to hear a clear explanation of why deflation is not the end of the world and can be less painful than continual inflation and then hear the chairman's dismissive response.
Or is that what was implied by the discussion of the fed's same low interest response whether boom or bust. Guess I'll listen again.
Stop it at 4:59. The look on BB's face is priceless the moment after Ron Paul says, "I'm for the Constitution." Somebody should make a poster from that single frame of video.
Saying "Our job is to move around the money supply to help economic growth", is as nonsensical as saying "Our job is to move the ground around to help you build the house on top of it".
Thank you Dr. Paul for awakening me with your campaign. Even if you don't expect to win in next elections, please run again, it will help take the veil off of more people's eyes.
Someone will make a "RP was right" video in a few years with this clip and show once again how clueless BB is.
It's funny (typical?), as RP becomes more of a 'rock star' of the GOP, he feels free to bend the truth. He did this when he claimed last year's middle class tax cut was just an increase in withholding and not a true tax cut, and had to claimed as income when they filed this year. Anyone who received the tax cut knows that's not true.
This time, he is taking liberties with the truth by saying "Well, I think that's the main thing where they're getting a lot more power. It's interesting that, of course, it'll be funded by the Fed"
This simply is not true. Yes the consumer protection agency will be housed within the Fed, but it will appointed with an independent director by the President, approved by congress. And it will have an independent budget.
Lol larry101, does it really matter where they're going to put this ridiculous new organization on the books? It all comes out of the same pot, like BillNM stated. It's all BS. Just look at how they names this new buraucracy: Consumer Protection Agency. The very arm of the federal gov't (federal reserve system) that has screwed consumers for decades is going to turn around and start actually working for consumers? It would be funny if it were fiction.
Posted 03/18/10 5:36 PM RomanRepublic Hicksville, NY
Ron Paul's questions were very good here. However, and I say this with all due respect, he really needs to articulate an overview of what would replace the FED. It is to my understanding that the money supply was issued by various banks before we had a central bank. This is less efficient, but the cost is worth it to not have so much power concentrated in an unelected body. The purpose of money is to allow the smooth transfer of GDP. Therefore, money should be increased and decreased in proportion to GDP. Strict requirements should be placed on those who produce (goods or services) as to what allows them to have new money issued to them. i.e. annual reports outlining not how much you've produced, but how much you've ADDED to GDP (current year's production minus last year's production). It sounds a little weird, and there may be adjustments that need to be made about how the money is issued, but I truly believe that is the direction to go.
The two provisions in the dual mandate conflict with one another - at least that is what Bernanke implies.
According to Bernanke's implication, it is because of the dual mandate that the Fed creates bubbles (to provide maximum employment), not in spite of it.
The question I have is: If the Fed were relieved of the provision of "maximizing employment," thus charging the Fed only with the "maintenance of stable prices," would the Fed induced bubbles stop?
I still despise central banking, but wouldn't an ammendment of removing the "maximizing employment" provision from the Fed's mandate, be less resistant by all, and also move us in the right direction? Anyone, feel free to respond, as I am not versed in the realm of monetary economics.
I don't think any of the suggestions regarding the purpose of the FED have merit - simply because all the stated purposes are ostensible. The FED exists for one purpose only - the enrichment of the few at the expense of the many.
Ron Paul and Ben Bernanke know each other's play book very very well. These are simply arguments that are being read into history. History will show who was trying to snowball the American Public, and who was trying to warn the American Public. I will be willing to bet that Bernanke has read "End the Fed" more times than most of us, and is hoping that it remains that way.
Face it. Most of the people walking around in the US have very little idea how much a trillion dollars is. Most of the people I talk to say "it's a lot of money". Imagine a million boxes, shoe boxes if you will. An enormous square (or rectangle because shoeboxes are rectangular) one thousand wide, and one thousand long, each shoebox filled with a million dollars. That is a trillion. I really can't imagine that most of the 535 elected representatives really comprehend this. Most people say that if you can say "a trillion" it is within the governments power to come up with it.
Posted 03/18/10 10:30 PM VictimOfFeds San Clemente, CA
"Maintain maximum employment"
That would be 100% or 0% unemployment. You failed Bernanke!
"The ultimate cause, therefore, of the phenomenon of wave after wave of economic ups and downs is ideological in character. The cycles will not disappear so long as people believe that the rate of interest may be reduced, not through the accumulation of capital, but by banking policy."- Ludwig von Mises, Greatest Economist of the Twentieth Century
I am NOT an economist or grad student in economics. But, the Constitution allows for direct creation of money by the President (hru the Treasury as Lincoln did during the civil war and Kennedy was about to before... bLAm! Lights out! The point of the matter is we should not in any way, shape, or form, pay a PRIVATE BANKER "INTEREST" to print OUR money... (We should NOT borrow it even during crisis. We should tax ourselves. How quick would Iraq and Vietnamistan have ended ? )
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