Ron Paul on Transparency and the Federal Reserve

The exchange yesterday between socialist Vermont Sen. Bernie Sanders and Federal Reserve Chairman Ben Bernanke reminded me of one of the weekly columns written by Texas Congressman Ron Paul, a fierce advocate for years for the complete elimination of the Fed.

While I’m pretty sure that Ron Glenn is chomping at the bit to write something about our wonderful Federal Reserve Bank, like Barack Obama not wanted to step on the toes of Timothy Geithner on the eve of his plan for our economic recovery, I don’t want to step on the toes of Mr. Glenn here — though I hope that his upcoming piece is better received than Geithner’s empty speech (and expect it will be).

In the meantime, since I’ve obtained permission from Congressman Paul’s office to reproduce, in full, his weekly columns on the pages of America’s Right, I figure that now would be as good a time as any to bring you this particular column from February 23, 2009. As you know by now, I do not agree with Rep. Paul on everything — however, with regard to our current economic situation and communicating just how far we’ve strayed from the intent of our founders, there may be nobody better in Washington, D.C.

– Jeff


On Transparency of the Fed
By Rep. Ron Paul (R-TX)

This week the Federal Reserve responded to the American people’s increased concerns over our monetary policy by presenting new initiatives aimed at enhancing the Fed’s transparency and accountability. As someone who has called for more openness from the Fed for over 30 years, I was pleased to see the Fed acknowledge the legitimacy of this need.

The Federal Reserve controls the flow of money and credit in our economy because Congress has abdicated its responsibility over the nation’s currency. This process therefore occurs centrally, and almost completely outside the system of checks and balances. Because of legal tender laws, people are left with no real choice, except to build their lives and futures around this monopoly currency, vulnerable to powerful central bankers. The Founding Fathers intended only gold and silver to be used as currency, however, inch by inch over the decades, this country has backed away from this important restraint. Our money today has no link whatsoever to gold or silver. For many reasons, this is extremely dangerous, and has a lot to do with the boom and bust cycles that have resulted in the crisis in which we find ourselves today.

The Fed is now pledging to reveal to the public more about its economic predictions, and calls this greater transparency. This is little more than window-dressing, at best, utterly useless at worst. Many analysts, especially those familiar with the Austrian school of economics, saw the current economic crisis coming years ago when the Federal Reserve was still telling the American people their policies were as good as gold. So while it might be nice to know what fantasy-infused outlook the Fed has on the economy, I am much more interested in what they are doing as a result of their faulty, haphazard interpretation of data. For instance, what arrangements do they have with other foreign central banks? What the Fed does on that front could very well affect or undermine foreign policy, or even contribute to starting a war.

We also need to know the source and destination of funds provided through the Fed’s emergency funding facilities. Information such as this will provide a more accurate and complete picture of the true cost of these endless bailouts and spending packages, and could very likely affect the decisions being made in Congress. But with so much of the Fed’s business cloaked in secrecy, these latest initiatives will not even scratch the surface of the Fed’s opaque operations. People are demanding answers and explanations for our economic malaise, and we should settle for nothing less than the whole truth on monetary policy.

The first step is to pass legislation I will soon introduce requiring an audit of the Federal Reserve so we can at least get an accurate picture of what is happening with our money. If this audit reveals what I suspect, and Congress has finally had enough, they can also pass my legislation to abolish the Federal Reserve and put control of the economy’s lifeblood, the currency, back where it Constitutionally belongs. If Congress refuses to do these two things, the very least they could do is repeal legal tender laws and allow people to choose a different currency in which to operate. If the Fed refuses to open its books to an audit, and Congress refuses to demand this, the people should not be subject to the whims of this secretive and incompetent organization.

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Comments

  1. Anonymous says:

    Yay, Jeff!!! Thank God!!!

    FINALLY, we are starting to talk about the invisible Trojan Horse…the FED!!!

    I don’t agree with Ron Paul on everything, either, but his views on fiscal matters and monetary policy are DEAD ON! He is a lone voice in the wilderness that we know as Congress! I don’t know how he can stand to be
    with these mindless idiots on a daily basis!

    And I did not even vote for Paul! But after reading “Meltdown” by Thomas E. Woods, Jr. and another book about the Council on Foreign Relations, I understand the danger of the FED.

    WE DO NEED TO ABOLISH THE FED!

    Thank you, thank you, Jeff, for printing this series!

    Lisa in Texas!

    YOU ARE AWESOME BEYOND BELIEF!

  2. Gail B says:

    Hallelujah! A man with guts is standing up to Congress and telling them to put their money where their mouth is! Now to find out whether they will agree to an audit of the Federal Reserve!

    Thank you, sir!

  3. REBOOT AMERICA says:

    I fear The Fed will be eliminated, if not procedurally, by arms.

  4. Bodenzee says:

    Has Article 1, Sect 9, para. 8 just been suspended too.

    The “honorable” Survivor of Chappaquiddick should hang his head in shame.

  5. tm says:

    I was very skeptical about ron paul yet he consistently almost shockingly is right on alot of the financial mess we are in right now.
    I’ve missed you all been on travel
    Great return article

    Here is something that made me so very happy today – Hope it will give you a smile

    http://www.blackfive.net/main/2009/03/the-difference.html

  6. Rix says:

    Are you folks so inhumanly naive as to believe that there 300-some volunteers will be found in Congress who would be willing to kill their own channel of income? My, my…

  7. Anonymous says:

    The idea is to elect 300-some volunteers who will kill that channel of income.

  8. CAL says:

    I am all for an audit of the Federal Reserve, but is Ron Paul suggesting that Congress would be better suited to overseeing our monetary system?? I cringe to think it. I need to learn more about this issue and am looking forward to your colleague’s article.
    Also, I loved Senator Sander’s question to Bernacke about the trillions of dollars in unregulated collateralized assets that have been allowed to float around the world’s economic systems. Bernacke seemed a little stunned at this. But my question here is, isn’t these more the SEC’s fault than the Fed’s?

  9. ladalang says:

    You cringe to think our elected officials make monetary policy over greedy for profit banks? At least with the politicians we have oversight. As it stands the bankers run this country. Until they lose their grip of power we are finished as a free nation. But we need to clean house in the current House and Senate. No re-elections accept Ron Paul. They will just get paid off by the bankers and nothing at all will change. It’s time to take back America and get liberty minded people running things.

    And Jeff, if you stopped watching your daily stream of propaganda and start looking into history you may come around regarding Ron Paul, if you aren’t agreeing with 95% you aren’t listening.

  10. Anonymous says:

    when I hear Ron Paul, I think of those old cereal ads: Cuckoo for Cocoa Puffs. it may be that the fair people of texas elected him as a republican, but he would never get my vote. All he does is play the populist card, but his ideas would only hurt the people he’s trying to ‘protect’.

    basically, as I understand him, he wants to abolish the fed, bring us back to the gold standard, and get rid of fractional lending. that sounds like the financial dark ages to myself. personally, I don’t recall any economist making these proposals, but I don’t read all the opinion pages either.

    it does seem to me that Greenspan did hold the interest rates too low all through out his career. Some even talk about how he propped up the markets during the 1990′s. some think this eventually led to our current situation with people viewing their houses as ATMs and wall street with their excesses. You can see with over a decade of too low of rates how this might get an economy going.

    Milton Friedman, is someone I could trust, and even he had problems with how the fed was run. His estimation was that you could replace much of it with a computer that increased the money supply at a steady rate; but as far as I know, he was never for the gold standard or probably any of the other things that Mr Paul wants to do. Can you imagine congress controlling our monetary policy????

    I agree it might be a good time to reexamine some of our assumptions about the economy, but I’m not willing to throw out the baby with the bath water.

  11. Tigress says:

    If people are worried about Congress controlling monetary policy, let me ask them this: why is it any better to have people at the Fed controlling it? They are ‘not’ politically biased but they sure as heck are in the deep pockets of the banking industry. (Well, I guess that’s the same as Congress.) Six of one, half dozen of the other. At least if Congress controls it, there is some hope of transparency and we the people having a say.

    Ron Paul is great. I think what you’re hinting at not agreeing with, Jeff, is his non-interventionist foreign policy stances? If so, I urge you to rethink your positions. My personal opinion in a nutshell is that (especially in this age of easy communications) the US should stand as a beacon of hope and example of what happens when people are free. Other people/nations will emulate this–we do not need to go out and force freedom (an oxymoron) on others. What’s the difference between an interventionist FP and the ‘new world order’ conservatives are skittish about? Not much. If we are true defenders of liberty–the basic principle of it, not just its implementation in our own backyard–then our FP must reflect that. Ron Paul is very logical on FP. Anyway…my two cents (keep the change!).

  12. Anonymous says:

    Anonymous 3:29 am:

    Probably the most reliable economic theorists today harken from The Mises Institute. It was founded by Ludwig von Mises and is located in Auburn, AL. I became familiar with them through reading a book (“Meltdown”) by one of their members, Thomas E. Woods, Jr.

    You can go to mises.org to learn more about their ideas.

    The problem with a fiat currency (paper) as opposed to a commodity-based currency is that the fiat currency is always corrupted and use for political purposes. Want to spend more to get votes? Great! Just print some more money!

    I do not want to give Congress control over our monetary policy, etc., but that does not mean that we shouldn’t deal with and expose the true agenda of the FED.

    Just sayin’……..

  13. Anonymous says:

    Posted 3/5/09 at 10am, a letter by Ron Paul supporters TO Ron Paul on http://www.defendourfreedoms.us.

    You might want to take a look!

    God bless America!

  14. Anonymous says:

    Too bad Ron Paul is such a nutcase in general. For compelling accounts of other charismatic nutcases who rose to prominence, gathered a national following, and then imploded on the campaign trail, see Ed Rollins’ amazing book, “Bare Knuckles and Back Rooms.” A lot of comparisons with Ross Perot come to mind.

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