Last week on Christmas Eve, after many backroom deals were made, the Senate passed the healthcare reform bill with a strictly partisan vote. I was pleased that my colleagues in the GOP are on the right side of this bill. Although this vote was a major step in healthcare reform becoming reality, they still have to reconcile the Senate bill with the House-passed version in conference committee. This could prove even more difficult and costly than the Senate vote.
There was a little bit of controversy surrounding one particular Senator who was initially against the bill, but then, coincidentally, a large amount of Medicare funding specifically for his state was tucked inside and he ended up voting for it. One wonders how much more of that will have to go on to achieve final passage.
But this is how politicians in Washington deal with problems: they throw your money at them. Healthcare reform is no different. The Senate version of the bill, at last count, will cost $871 billion. The House version tops $1 trillion. But they tell us this is for the health of Americans, and how dare we count the cost?
Such is the arrogance of politicians. There seems to be no end to the problems they feel capable and duty-bound to solve through legislative proclamation and plenty of your money. To hear them talk, one might think that a few words spoken on Capitol Hill would make problems just disappear. All it takes it good intentions.
But no good can come from 2400 pages of Washington’s good intentions.
I have observed quite the opposite throughout my political career in the House of Representatives, and fear that with this immense legislation, our healthcare problems are only just beginning. Over the last few decades, I have seen healthcare subjected to more and more creeping red tape that only creates bottlenecks and increases costs as new bureaucratic hurdles are put in place.
Politicians cannot solve the problems created by ever-increasing intervention by exponentially increasing their intervention. Similarly, they cannot improve the quality of healthcare and expand access to it for all Americans simply by legislative decree. If only it were that simple! The reality is the free market, when allowed to function, naturally increases access and drives prices down through competition. The free market keeps service providers accountable by allowing people to take their business elsewhere.
This government intervention will eventually create a near monopoly of providers in health insurance as smaller companies are squeezed out and innovation comes to a grinding halt due to formidable barriers to entry. The government will determine prices and levels of service that will apply to everyone, regardless of want or individual circumstances. The true insurance model of healthcare cost management, meaning major medical coverage only, will basically become illegal. Opting out of the system will incur heavy tax penalties.
Expanding government reach so deeply into this very sensitive area of our personal lives and such a major part of our economy means more opportunities for waste, fraud and abuse of the system. One need only remember the recent bailouts for an example of how government handles systemic waste, fraud and abuse.
So while the Senate patted itself on the back last week for delivering a Christmas gift to Americans, time will prove it was instead a great big lump of coal.
Wednesday
IRAN SANCTIONS ARE PRECURSOR TO WAR
Last week the House overwhelmingly approved a measure to put a new round of sanctions on Iran. If this measure passes the Senate, the United States could no longer do business with anyone who sold refined petroleum products to Iran or helped them develop their ability to refine their own petroleum. The sad thing is that many of my colleagues voted for this measure because they felt it would deflect a military engagement with Iran. I would put the question to them, how would Congress react if another government threatened our critical trading partners in this way? Would we not view it as asking for war?
This policy is pure isolationism. It is designed to foment war by cutting off trade and diplomacy. Too many forget that the quagmire in Iraq began with an embargo. Sanctions are not diplomacy. They are a precursor to war and an embarrassment to a country that pays lip service to free trade. It is ironic that people who decry isolationism support actions like this.
If a foreign government attempted to isolate the US economically, cut off our supply of gasoline, or starve us to death, would it cause Americans to admire that foreign entity? Or would we instead unite under the flag for the survival of our country?
We would not tolerate foreign covert operations fomenting regime change in our government. Yet our CIA has been meddling in Iran for decades. Of course Iranians resent this. In fact, many in Iran still resent the CIA’s involvement in overthrowing their democratically elected leader in 1953. The answer is not to cut off gasoline to the Iranian people. The answer is to stay out of their affairs and trade with them honestly. If our operatives were no longer in Iran, they would no longer be available as scapegoats for the regime to, rightly or wrongly, blame for every bad thing that happens. As bad as other regimes may be, it is up to their own people to deal with them so they can achieve true self-determination. When foreigners instigate regime change, the new government they institute is always perceived as serving the interest of the overthrowing country, not the people. Thus we take the blame for bad governance twice. Instead we should stay out of their affairs altogether.
With the exception of the military industrial complex, we all want a more peaceful world. Many are hysterical about the imminent threat of a nuclear Iran. Here are the facts: Iran has never been found out of compliance with the nuclear non-proliferation treaty (NPT) they signed. However, being surrounded by nuclear powers one can understand why they might want to become nuclear capable if only to defend themselves and to be treated more respectfully. After all, we don’t sanction nuclear capable countries. We take diplomatic negotiations a lot more seriously, and we frequently send money to them instead. The non-nuclear countries are the ones we bomb. If Iran was attempting to violate the non-proliferation treaty, they could hardly be blamed, since US foreign policy gives them every incentive to do so.
This policy is pure isolationism. It is designed to foment war by cutting off trade and diplomacy. Too many forget that the quagmire in Iraq began with an embargo. Sanctions are not diplomacy. They are a precursor to war and an embarrassment to a country that pays lip service to free trade. It is ironic that people who decry isolationism support actions like this.
If a foreign government attempted to isolate the US economically, cut off our supply of gasoline, or starve us to death, would it cause Americans to admire that foreign entity? Or would we instead unite under the flag for the survival of our country?
We would not tolerate foreign covert operations fomenting regime change in our government. Yet our CIA has been meddling in Iran for decades. Of course Iranians resent this. In fact, many in Iran still resent the CIA’s involvement in overthrowing their democratically elected leader in 1953. The answer is not to cut off gasoline to the Iranian people. The answer is to stay out of their affairs and trade with them honestly. If our operatives were no longer in Iran, they would no longer be available as scapegoats for the regime to, rightly or wrongly, blame for every bad thing that happens. As bad as other regimes may be, it is up to their own people to deal with them so they can achieve true self-determination. When foreigners instigate regime change, the new government they institute is always perceived as serving the interest of the overthrowing country, not the people. Thus we take the blame for bad governance twice. Instead we should stay out of their affairs altogether.
With the exception of the military industrial complex, we all want a more peaceful world. Many are hysterical about the imminent threat of a nuclear Iran. Here are the facts: Iran has never been found out of compliance with the nuclear non-proliferation treaty (NPT) they signed. However, being surrounded by nuclear powers one can understand why they might want to become nuclear capable if only to defend themselves and to be treated more respectfully. After all, we don’t sanction nuclear capable countries. We take diplomatic negotiations a lot more seriously, and we frequently send money to them instead. The non-nuclear countries are the ones we bomb. If Iran was attempting to violate the non-proliferation treaty, they could hardly be blamed, since US foreign policy gives them every incentive to do so.
Tuesday
THE FED'S MONEY MONOPOLY
Last week, in the name of protecting the little guy from Wall Street, the House passed HR 4173 to increase the little guy’s false sense of security in the financial system. This mammoth piece of legislation would massively increase government regulation and oversight in the banking industry under the misguided reasoning that more government could have stopped faulty lending practices, when in actuality it caused them. This bill would also greatly increase the powers of the Federal Reserve, which too many in Congress still see as savior rather than perpetrator in this mess.
One silver lining is that the amendment to audit the Fed is still attached to the bill, and if it survives the Senate, the Fed will no longer operate in secrecy. If any version of HR 4173 becomes law, the Fed will be intervening and bailing out more rather than less, as it will gain enormous new powers in addition to those it already has. Whatever happens, the Fed and its defenders have seen that people are becoming very wary of its methods of operation, and many are downright angry at its very existence. Never again will the Fed be immune from the scrutiny of its critics. This is very positive.
Because of legal tender laws that force acceptance of the dollar, the Fed has absolute power over the currency. This absolute power is leading to the absolute corruption of our currency. The money supply has doubled in the last year or so, which is extremely dangerous. The banks seem to be hoarding liquidity now but once these dollars make their way into the economy, hyperinflation and economic chaos will be a real possibility.
Every time hyperinflation rips through an economy, the middle class gets completely wiped out. It is very alarming to watch the purchasing power of an entire life savings reduced to that of a few pennies. Those savings represent years of real labor, real time, effort and sacrifice exchanged for corruptible pieces of paper that politicians and bankers can destroy at whim.
Legal tender laws force the people to become subject to this risk for the benefit of the rulers. Artificial demand for currency allows the authorities to create arbitrary amounts of it to pay for wasteful projects, like frivolous wars and an ever-expanding public sector. This saps the private economy of jobs and purchasing power, yet the temptation proves too great for politicians, time and time again. Our government is no different. Although our dollar has taken nearly a century to lose 98f its purchasing power, the fact that we are all obliged to participate in this slow burn of the economy on pain of imprisonment is anathema to the principles of liberty.
I introduced the Free Competition in Currency Act last week to free the people from these governmental threats. HR 4248 would repeal legal tender laws, prohibit taxation on certain coins and bullion, and repeal certain laws related to coinage. The prospect of people turning away from the dollar towards alternate currencies should provide incentive for Congress to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government's ability and incentive to inflate the currency and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system.
One silver lining is that the amendment to audit the Fed is still attached to the bill, and if it survives the Senate, the Fed will no longer operate in secrecy. If any version of HR 4173 becomes law, the Fed will be intervening and bailing out more rather than less, as it will gain enormous new powers in addition to those it already has. Whatever happens, the Fed and its defenders have seen that people are becoming very wary of its methods of operation, and many are downright angry at its very existence. Never again will the Fed be immune from the scrutiny of its critics. This is very positive.
Because of legal tender laws that force acceptance of the dollar, the Fed has absolute power over the currency. This absolute power is leading to the absolute corruption of our currency. The money supply has doubled in the last year or so, which is extremely dangerous. The banks seem to be hoarding liquidity now but once these dollars make their way into the economy, hyperinflation and economic chaos will be a real possibility.
Every time hyperinflation rips through an economy, the middle class gets completely wiped out. It is very alarming to watch the purchasing power of an entire life savings reduced to that of a few pennies. Those savings represent years of real labor, real time, effort and sacrifice exchanged for corruptible pieces of paper that politicians and bankers can destroy at whim.
Legal tender laws force the people to become subject to this risk for the benefit of the rulers. Artificial demand for currency allows the authorities to create arbitrary amounts of it to pay for wasteful projects, like frivolous wars and an ever-expanding public sector. This saps the private economy of jobs and purchasing power, yet the temptation proves too great for politicians, time and time again. Our government is no different. Although our dollar has taken nearly a century to lose 98f its purchasing power, the fact that we are all obliged to participate in this slow burn of the economy on pain of imprisonment is anathema to the principles of liberty.
I introduced the Free Competition in Currency Act last week to free the people from these governmental threats. HR 4248 would repeal legal tender laws, prohibit taxation on certain coins and bullion, and repeal certain laws related to coinage. The prospect of people turning away from the dollar towards alternate currencies should provide incentive for Congress to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government's ability and incentive to inflate the currency and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system.
RON PAUL TO OBAMA
Former 2008 Republican Presidential candidate and Congressman from Texas Ron Paul recently spoke with Russia Today about President Barack Obama's Nobel Peace Prize and the author of "End the Fed" believes the President should have turned it down.
“He should have turned it down,” says Republican Congressman Ron Paul of Texas on Russia Today this week as U.S. President Barack Obama claimed his Nobel Peace Prize award in Oslo, Norway on Friday.
As the 44th President of the United States adds 30,000 more troops to Afghanistan and authorizing the Central Intelligence Agency to increas unmanned drones in Afghanistan and Pakistan, which expands the war into Pakistan, many feel that Obama did not deserve the prestigious award because he is not promoting peace with his actions.
The Nobel committee said the former Illinois Senator was awarded the prize because of his efforts to increase diplomacy around the world and co-operation with other nations.
The author of “Revolution: A Manifesto” and “A Foreign Policy of Freedom,” Dr. Paul, added, “He’s expanding the war and the people should be embarrassed. I mean how can you believe in preventive war, that is, believe in the principle of starting wars and expanding wars and getting a peace prize. I mean I don’t see any signs of peace. I see the world as more dangerous. More dangerous with the former administration and the danger expands with this administration.”
A recent poll, according to Politico, shows that only 26 per cent of Americans believe Pres. Obama should have won the Nobel Peace Prize.
“He should have turned it down,” says Republican Congressman Ron Paul of Texas on Russia Today this week as U.S. President Barack Obama claimed his Nobel Peace Prize award in Oslo, Norway on Friday.
As the 44th President of the United States adds 30,000 more troops to Afghanistan and authorizing the Central Intelligence Agency to increas unmanned drones in Afghanistan and Pakistan, which expands the war into Pakistan, many feel that Obama did not deserve the prestigious award because he is not promoting peace with his actions.
The Nobel committee said the former Illinois Senator was awarded the prize because of his efforts to increase diplomacy around the world and co-operation with other nations.
The author of “Revolution: A Manifesto” and “A Foreign Policy of Freedom,” Dr. Paul, added, “He’s expanding the war and the people should be embarrassed. I mean how can you believe in preventive war, that is, believe in the principle of starting wars and expanding wars and getting a peace prize. I mean I don’t see any signs of peace. I see the world as more dangerous. More dangerous with the former administration and the danger expands with this administration.”
A recent poll, according to Politico, shows that only 26 per cent of Americans believe Pres. Obama should have won the Nobel Peace Prize.
Saturday
LEAVE AFGHANISTAN
Statement before the Foreign Affairs Committee, United States House of Representatives, December 10, 2009
Mr. Speaker thank you for holding these important hearings on US policy in Afghanistan. I would like to welcome the witnesses, Ambassador Karl W. Eikenberry and General Stanley A. McChrystal, and thank them for appearing before this Committee.
I have serious concerns, however, about the president’s decision to add some 30,000 troops and an as yet undisclosed number of civilian personnel to escalate our Afghan operation. This “surge” will bring US troop levels to approximately those of the Soviets when they occupied Afghanistan with disastrous result back in the 1980s. I fear the US military occupation of Afghanistan may end up similarly unsuccessful.
In late 1986 Soviet armed forces commander, Marshal Sergei Akhromeev, told then-Soviet General Secretary Mikhail Gorbachev, "Military actions in Afghanistan will soon be seven years old. There is no single piece of land in this country which has not been occupied by a Soviet soldier. Nonetheless, the majority of the territory remains in the hands of rebels.” Soon Gorbachev began the Soviet withdrawal from its Afghan misadventure. Thousands were dead on both sides, yet the occupation failed to produce a stable national Afghan government.
Eight years into our own war in Afghanistan the Soviet commander’s words ring eerily familiar. Part of the problem stems from a fundamental misunderstanding of the situation. It is our presence as occupiers that feeds the insurgency. As would be the case if we were invaded and occupied, diverse groups have put aside their disagreements to unify against foreign occupation. Adding more US troops will only assist those who recruit fighters to attack our soldiers and who use the US occupation to convince villages to side with the Taliban.
Proponents of the president’s Afghanistan escalation cite the successful “surge” in Iraq as evidence that this second surge will have similar results. I fear they might be correct about the similar result, but I dispute the success propaganda about Iraq. In fact, the violence in Iraq only temporarily subsided with the completion of the ethnic cleansing of Shi’ites from Sunni neighborhoods and vice versa – and all neighborhoods of Christians. Those Sunni fighters who remained were easily turned against the foreign al-Qaeda presence when offered US money and weapons. We are increasingly seeing this “success” breaking down: sectarian violence is flaring up and this time the various groups are better armed with US-provided weapons. Similarly, the insurgents paid by the US to stop their attacks are increasingly restive now that the Iraqi government is no longer paying bribes on a regular basis. So I am skeptical about reports on the success of the Iraqi surge.
Likewise, we are told that we have to “win” in Afghanistan so that al-Qaeda cannot use Afghan territory to plan further attacks against the US. We need to remember that the attack on the United States on September 11, 2001 was, according to the 9/11 Commission Report, largely planned in the United States (and Germany) by terrorists who were in our country legally. According to the logic of those who endorse military action against Afghanistan because al-Qaeda was physically present, one could argue in favor of US airstrikes against several US states and Germany! It makes no sense. The Taliban allowed al-Qaeda to remain in Afghanistan because both had been engaged, with US assistance, in the insurgency against the Soviet occupation.
Nevertheless, the president’s National Security Advisor, Gen. James Jones, USMC (Ret.), said in a recent interview that less than 100 al-Qaeda remain in Afghanistan and that the chance they would reconstitute a significant presence there was slim. Are we to believe that 30,000 more troops are needed to defeat 100 al-Qaeda fighters? I fear that there will be increasing pressure for the US to invade Pakistan, to where many Taliban and al-Qaeda have escaped. Already CIA drone attacks on Pakistan have destabilized that country and have killed scores of innocents, producing strong anti-American feelings and calls for revenge. I do not see how that contributes to our national security.
The president’s top advisor for Afghanistan and Pakistan, Richard Holbrooke, said recently, “I would say this about defining success in Afghanistan and Pakistan. In the simplest sense, the Supreme Court test for another issue, we’ll know it when we see it.” That does not inspire much confidence.
Supporters of this surge argue that we must train an Afghan national army to take over and strengthen the rule and authority of Kabul. But experts have noted that the ranks of the Afghan national army are increasingly being filled by the Tajik minority at the expense of the Pashtun plurality. US diplomat Matthew Hoh, who resigned as Senior Civilian Representative for the U.S. Government in Zabul Province, noted in his resignation letter that he “fail[s] to see the value or the worth in continued U.S. casualties or expenditures of resources in support of the Afghan government in what is, truly, a 35-year-old civil war.” Mr. Hoh went on to write that “[L]ike the Soviets, we continue to secure and bolster a failing state, while encouraging an ideology and system of government unknown and unwanted by [the Afghan] people.”
I have always opposed nation-building as unconstitutional and ineffective. Afghanistan is no different. Without a real strategy in Afghanistan, without a vision of what victory will look like, we are left with the empty rhetoric of the last administration that “when the Afghan people stand up, the US will stand down.” I am afraid the only solution to the Afghanistan quagmire is a rapid and complete US withdrawal from that country and the region. We cannot afford to maintain this empire and our occupation of these foreign lands is not making us any safer. It is time to leave Afghanistan.
Mr. Speaker thank you for holding these important hearings on US policy in Afghanistan. I would like to welcome the witnesses, Ambassador Karl W. Eikenberry and General Stanley A. McChrystal, and thank them for appearing before this Committee.
I have serious concerns, however, about the president’s decision to add some 30,000 troops and an as yet undisclosed number of civilian personnel to escalate our Afghan operation. This “surge” will bring US troop levels to approximately those of the Soviets when they occupied Afghanistan with disastrous result back in the 1980s. I fear the US military occupation of Afghanistan may end up similarly unsuccessful.
In late 1986 Soviet armed forces commander, Marshal Sergei Akhromeev, told then-Soviet General Secretary Mikhail Gorbachev, "Military actions in Afghanistan will soon be seven years old. There is no single piece of land in this country which has not been occupied by a Soviet soldier. Nonetheless, the majority of the territory remains in the hands of rebels.” Soon Gorbachev began the Soviet withdrawal from its Afghan misadventure. Thousands were dead on both sides, yet the occupation failed to produce a stable national Afghan government.
Eight years into our own war in Afghanistan the Soviet commander’s words ring eerily familiar. Part of the problem stems from a fundamental misunderstanding of the situation. It is our presence as occupiers that feeds the insurgency. As would be the case if we were invaded and occupied, diverse groups have put aside their disagreements to unify against foreign occupation. Adding more US troops will only assist those who recruit fighters to attack our soldiers and who use the US occupation to convince villages to side with the Taliban.
Proponents of the president’s Afghanistan escalation cite the successful “surge” in Iraq as evidence that this second surge will have similar results. I fear they might be correct about the similar result, but I dispute the success propaganda about Iraq. In fact, the violence in Iraq only temporarily subsided with the completion of the ethnic cleansing of Shi’ites from Sunni neighborhoods and vice versa – and all neighborhoods of Christians. Those Sunni fighters who remained were easily turned against the foreign al-Qaeda presence when offered US money and weapons. We are increasingly seeing this “success” breaking down: sectarian violence is flaring up and this time the various groups are better armed with US-provided weapons. Similarly, the insurgents paid by the US to stop their attacks are increasingly restive now that the Iraqi government is no longer paying bribes on a regular basis. So I am skeptical about reports on the success of the Iraqi surge.
Likewise, we are told that we have to “win” in Afghanistan so that al-Qaeda cannot use Afghan territory to plan further attacks against the US. We need to remember that the attack on the United States on September 11, 2001 was, according to the 9/11 Commission Report, largely planned in the United States (and Germany) by terrorists who were in our country legally. According to the logic of those who endorse military action against Afghanistan because al-Qaeda was physically present, one could argue in favor of US airstrikes against several US states and Germany! It makes no sense. The Taliban allowed al-Qaeda to remain in Afghanistan because both had been engaged, with US assistance, in the insurgency against the Soviet occupation.
Nevertheless, the president’s National Security Advisor, Gen. James Jones, USMC (Ret.), said in a recent interview that less than 100 al-Qaeda remain in Afghanistan and that the chance they would reconstitute a significant presence there was slim. Are we to believe that 30,000 more troops are needed to defeat 100 al-Qaeda fighters? I fear that there will be increasing pressure for the US to invade Pakistan, to where many Taliban and al-Qaeda have escaped. Already CIA drone attacks on Pakistan have destabilized that country and have killed scores of innocents, producing strong anti-American feelings and calls for revenge. I do not see how that contributes to our national security.
The president’s top advisor for Afghanistan and Pakistan, Richard Holbrooke, said recently, “I would say this about defining success in Afghanistan and Pakistan. In the simplest sense, the Supreme Court test for another issue, we’ll know it when we see it.” That does not inspire much confidence.
Supporters of this surge argue that we must train an Afghan national army to take over and strengthen the rule and authority of Kabul. But experts have noted that the ranks of the Afghan national army are increasingly being filled by the Tajik minority at the expense of the Pashtun plurality. US diplomat Matthew Hoh, who resigned as Senior Civilian Representative for the U.S. Government in Zabul Province, noted in his resignation letter that he “fail[s] to see the value or the worth in continued U.S. casualties or expenditures of resources in support of the Afghan government in what is, truly, a 35-year-old civil war.” Mr. Hoh went on to write that “[L]ike the Soviets, we continue to secure and bolster a failing state, while encouraging an ideology and system of government unknown and unwanted by [the Afghan] people.”
I have always opposed nation-building as unconstitutional and ineffective. Afghanistan is no different. Without a real strategy in Afghanistan, without a vision of what victory will look like, we are left with the empty rhetoric of the last administration that “when the Afghan people stand up, the US will stand down.” I am afraid the only solution to the Afghanistan quagmire is a rapid and complete US withdrawal from that country and the region. We cannot afford to maintain this empire and our occupation of these foreign lands is not making us any safer. It is time to leave Afghanistan.
Friday
WHAT I THINK.....PAT BUCHANAN
The decades-long campaign of Ron Paul to have the Government Accountability Office do a full audit of the Federal Reserve now has 313 sponsors in the House.
Sometimes perseverance does pay off.
If not derailed by the establishment, the audit may happen.
Yet, many columnists and commentators are aghast.
An auditors' probe, they wail, would imperil the Fed's independence and expose it to pressure from Congress to keep interest rates low and money flowing when the need of the nation and economy might call for tightening.
They cite Paul Volcker, who to squeeze double-digit inflation out of the economy in the late Carter and early Reagan years, drove the prime rate to 21 percent, causing the worst recession since the Depression. Volcker, they claim, prepared the ground for the Reagan tax cuts and seven fat years of prosperity.
That decade, America created 20 million jobs – and another 22 million in the Clinton era. Without Volcker putting the economy through the wringer, it could not have happened. And had he been forced to explain his decisions, Congress would have broken his policy.
Such is the cast for Fed independence.
But if true, what does this say about our republic?
Is it not an admission that, though Congress was created by the Constitution, and the Fed is a creation of Congress, our elected representatives cannot be trusted with the money supply, cannot be trusted with control of the nation's central bank? To have decisions made in the national interest, we need folks who do not have to answer to voters.
If this be true, the republic is closer to its end than its beginning, when Thomas Jefferson said, "In questions of power, let us hear no more of trust in men, but rather bind them down from mischief with the chains of the Constitution."
Others contend that were it not for the independence and vision of Fed Chair Ben Bernanke, the economy might have gone over the cliff and into the abyss after the Lehman Brothers collapse in October 2008.
What opponents of Paul's audit are thus saying is that elected legislators must be kept out of the temple where the great decisions about the economy are made, that these decisions must rest with bankers and economists answerable, as is the Supreme Court, to themselves and no one else.
But has the performance of the Fed been so brilliant any intrusion upon its privacy is sacrilege?
Among the failures of the Fed is the Great Depression. As Milton Friedman related in his "Monetary History of the United States," for which he won a Nobel Prize for Economics, the Fed hugely expanded the money supply in the mid-to-late 1920s.
Following a path of least resistance, the money flowed into the equity markets, where stocks could be bought on 10 percent margin. The market soared, and a huge bubble was created. When it popped, scores of thousands of investors conducted a run on the banks to get their money out to meet their margin calls.
Thousands of banks, short on cash, closed. One-third of the money supply was wiped out, and the Fed failed to replenish the lost blood. Thus did the Fed cause the Great Depression.
Smoot and Hawley were framed.
Moreover, every bubble from the dot-com of the late 1990s to housing this decade is a result of Fed policy. For unless there is an excess of money sloshing around, funds that surge into one market, be it housing, stocks or Third World loans, have to come out of another.
Moreover, if the Fed has not failed dismally in its duty to keep prices stable, how come candy bars and Cokes that cost a nickel in the 1950s cost 50 or 75 cents today, and new Cadillacs that sold for $3,200 in the late 1940s cost $55,000 or $60,000 now? Who is responsible for inflation, if not the Fed?
Moreover, it is now conceded that the Fed, in the early years of this 21st century, kept interest rates near 1 percent for too long, and created the bubble that popped in 2008 and almost brought down our own and the global economies.
Because the Fed can create money out of thin air, we have been able to wage wars on credit, shovel out trillions in foreign aid, World Bank and International Monetary Fund loans, and run humongous budget and trade deficits that have brought our country to the brink of ruin.
And if Bernanke is a genius, how is it he didn't see the train wreck coming and had to double-time it to the Hill with Hank Paulson to plead for $700 billion to bail out AIG, Fannie and Freddie, and buy all that rotten paper on the books of Citibank & Co.?
The greatest economy the world had ever seen has been horribly mismanaged and virtually ruined by the decisions of presidents, Congress and the Federal Reserve. Main Street has been wiped as Wall Street was bailed out. Why?
Bring on the auditors!
Sometimes perseverance does pay off.
If not derailed by the establishment, the audit may happen.
Yet, many columnists and commentators are aghast.
An auditors' probe, they wail, would imperil the Fed's independence and expose it to pressure from Congress to keep interest rates low and money flowing when the need of the nation and economy might call for tightening.
They cite Paul Volcker, who to squeeze double-digit inflation out of the economy in the late Carter and early Reagan years, drove the prime rate to 21 percent, causing the worst recession since the Depression. Volcker, they claim, prepared the ground for the Reagan tax cuts and seven fat years of prosperity.
That decade, America created 20 million jobs – and another 22 million in the Clinton era. Without Volcker putting the economy through the wringer, it could not have happened. And had he been forced to explain his decisions, Congress would have broken his policy.
Such is the cast for Fed independence.
But if true, what does this say about our republic?
Is it not an admission that, though Congress was created by the Constitution, and the Fed is a creation of Congress, our elected representatives cannot be trusted with the money supply, cannot be trusted with control of the nation's central bank? To have decisions made in the national interest, we need folks who do not have to answer to voters.
If this be true, the republic is closer to its end than its beginning, when Thomas Jefferson said, "In questions of power, let us hear no more of trust in men, but rather bind them down from mischief with the chains of the Constitution."
Others contend that were it not for the independence and vision of Fed Chair Ben Bernanke, the economy might have gone over the cliff and into the abyss after the Lehman Brothers collapse in October 2008.
What opponents of Paul's audit are thus saying is that elected legislators must be kept out of the temple where the great decisions about the economy are made, that these decisions must rest with bankers and economists answerable, as is the Supreme Court, to themselves and no one else.
But has the performance of the Fed been so brilliant any intrusion upon its privacy is sacrilege?
Among the failures of the Fed is the Great Depression. As Milton Friedman related in his "Monetary History of the United States," for which he won a Nobel Prize for Economics, the Fed hugely expanded the money supply in the mid-to-late 1920s.
Following a path of least resistance, the money flowed into the equity markets, where stocks could be bought on 10 percent margin. The market soared, and a huge bubble was created. When it popped, scores of thousands of investors conducted a run on the banks to get their money out to meet their margin calls.
Thousands of banks, short on cash, closed. One-third of the money supply was wiped out, and the Fed failed to replenish the lost blood. Thus did the Fed cause the Great Depression.
Smoot and Hawley were framed.
Moreover, every bubble from the dot-com of the late 1990s to housing this decade is a result of Fed policy. For unless there is an excess of money sloshing around, funds that surge into one market, be it housing, stocks or Third World loans, have to come out of another.
Moreover, if the Fed has not failed dismally in its duty to keep prices stable, how come candy bars and Cokes that cost a nickel in the 1950s cost 50 or 75 cents today, and new Cadillacs that sold for $3,200 in the late 1940s cost $55,000 or $60,000 now? Who is responsible for inflation, if not the Fed?
Moreover, it is now conceded that the Fed, in the early years of this 21st century, kept interest rates near 1 percent for too long, and created the bubble that popped in 2008 and almost brought down our own and the global economies.
Because the Fed can create money out of thin air, we have been able to wage wars on credit, shovel out trillions in foreign aid, World Bank and International Monetary Fund loans, and run humongous budget and trade deficits that have brought our country to the brink of ruin.
And if Bernanke is a genius, how is it he didn't see the train wreck coming and had to double-time it to the Hill with Hank Paulson to plead for $700 billion to bail out AIG, Fannie and Freddie, and buy all that rotten paper on the books of Citibank & Co.?
The greatest economy the world had ever seen has been horribly mismanaged and virtually ruined by the decisions of presidents, Congress and the Federal Reserve. Main Street has been wiped as Wall Street was bailed out. Why?
Bring on the auditors!
Wednesday
WHAT I THINK........GARY
Washington has been so out of touch with principles and reality for so long, that they probably think voting for the bill initiated by Ron Paul to edit the Federal Reserve would be political feather in the cap of Ron Paul. But it looks like that isn’t going to be so, as it wasn’t allowed to stand alone, and has been tacked on to another bill which Paul couldn’t allow himself to vote for, so it looks like he’ll be voting against his own bill, which of course, has quickly become something more.
Having said that, the bill itself, assuming it remains as it is, will be a very positive step forward to reining in the Federal Reserve, which has become an unaccountable, secret organization which make deals with foreign governments and foreign central banks with impunity, while making decisions which go far beyond its charter; things like bailing out whatever industry they feel like bailing out, even if they’ve never been delegated the authority to do so. Sectors like the insurance and auto industry, which aren’t in any way under the umbrella of the Federal Reserve.
What the Ron Paul legislation will do, is subject the Federal Reserve to a full audit for the first time in history, via the Government Accountability Office. Unfortunately, as mentioned earlier, it has been grouped together with a finance reform bill which Paul doesn’t believe in. So being a truly principled man, he’ll vote against it, even with his legislation included. The good news for Paul’s bill is, more than likely Paul will be outvoted and the bill will pass, with Paul’s legislation included.
Paul rejects the notion that this will somehow interfere with the independence of the Federal Reserve, as his primary focus in the bill is to force the highly secretive Federal Reserve out into the open so lawmakers and the public can see what they have been doing behind closed doors with foreign nations and domestically. In other words, Paul is asking for transparency at the financial institution through this bill.
As Paul has rightly noted though, it must be big what the Fed is trying to hide, as the opposition is so strong it seems whatever is attempted to be hidden will not be approved of by Americans or its political representatives.
Paul stated in a recent interview: “What they’re talking about when they say they want no political influence, what they’re talking about is they just want secrecy. Why would they be so nervous about us finding this out? It tells you there’s something big going on.”
With the Federal Reserve picking and choosing who they decided to allow to be bailed out, this has also triggered a red flag with Paul, who wants to know through the audit of the Federal Reserve why certain businesses were chosen to be saved and others not. He wants to know why the Federal Reserve went beyond its authority and bailed out those in the auto and insurance industries.
One of the ideas the Federal Reserve has been using to combat the bill is that there could be a perception by outsiders and the public that political pressure could undermine the independence of the Federal Reserve, creating economic stability. Let’s see, you mean like we’re living in today without an audit of the Federal Reserve.
It couldn’t get much worse than we’ve been experiencing over the last couple of years in America, so how would keeping things as they are help in any way concerning the Federal Reserve? They wouldn’t, which is why a full audit of the Federal Reserve is a great thing, even if it is attached to a bill full of other misguided proposals.
So, yes, Ron Paul will vote against his own bill, but for the reason that it has been mingled together with something else Ron Paul doesn’t believe in. Too bad we don’t have a large number of politicians who understand the forces they’re dealing with and yet stick to what they believe in as Ron Paul does.
Having said that, the bill itself, assuming it remains as it is, will be a very positive step forward to reining in the Federal Reserve, which has become an unaccountable, secret organization which make deals with foreign governments and foreign central banks with impunity, while making decisions which go far beyond its charter; things like bailing out whatever industry they feel like bailing out, even if they’ve never been delegated the authority to do so. Sectors like the insurance and auto industry, which aren’t in any way under the umbrella of the Federal Reserve.
What the Ron Paul legislation will do, is subject the Federal Reserve to a full audit for the first time in history, via the Government Accountability Office. Unfortunately, as mentioned earlier, it has been grouped together with a finance reform bill which Paul doesn’t believe in. So being a truly principled man, he’ll vote against it, even with his legislation included. The good news for Paul’s bill is, more than likely Paul will be outvoted and the bill will pass, with Paul’s legislation included.
Paul rejects the notion that this will somehow interfere with the independence of the Federal Reserve, as his primary focus in the bill is to force the highly secretive Federal Reserve out into the open so lawmakers and the public can see what they have been doing behind closed doors with foreign nations and domestically. In other words, Paul is asking for transparency at the financial institution through this bill.
As Paul has rightly noted though, it must be big what the Fed is trying to hide, as the opposition is so strong it seems whatever is attempted to be hidden will not be approved of by Americans or its political representatives.
Paul stated in a recent interview: “What they’re talking about when they say they want no political influence, what they’re talking about is they just want secrecy. Why would they be so nervous about us finding this out? It tells you there’s something big going on.”
With the Federal Reserve picking and choosing who they decided to allow to be bailed out, this has also triggered a red flag with Paul, who wants to know through the audit of the Federal Reserve why certain businesses were chosen to be saved and others not. He wants to know why the Federal Reserve went beyond its authority and bailed out those in the auto and insurance industries.
One of the ideas the Federal Reserve has been using to combat the bill is that there could be a perception by outsiders and the public that political pressure could undermine the independence of the Federal Reserve, creating economic stability. Let’s see, you mean like we’re living in today without an audit of the Federal Reserve.
It couldn’t get much worse than we’ve been experiencing over the last couple of years in America, so how would keeping things as they are help in any way concerning the Federal Reserve? They wouldn’t, which is why a full audit of the Federal Reserve is a great thing, even if it is attached to a bill full of other misguided proposals.
So, yes, Ron Paul will vote against his own bill, but for the reason that it has been mingled together with something else Ron Paul doesn’t believe in. Too bad we don’t have a large number of politicians who understand the forces they’re dealing with and yet stick to what they believe in as Ron Paul does.
WHAT I THINK......TOMOEH MURAKAMI TSE
Ron Paul is used to going it alone. During 20 years in Washington, the libertarian Republican congressman from Texas has proposed doing away with personal income taxes, federal antitrust laws and the minimum wage. He's advocated pulling the United States out of the United Nations, NATO and the International Monetary Fund.
Those efforts have mostly been legislative non-starters. Many of his bills fail to attract a single co-sponsor.
But one of his perennial causes is headed to the House floor Wednesday with widespread support: to audit the Federal Reserve. That measure, which he first introduced in 1983, has the backing of more than 300 legislators and last month won bipartisan approval in the House Financial Services Committee.
The proposal would subject the Fed to unprecedented scrutiny by allowing the Government Accountability Office to audit all central bank operations, including its decisions on interest rates, lending to individual banks and transactions with foreign central banks. Fed officials and many private economists have argued strenuously against the measure, saying it would threaten economic stability by undermining the central bank's independence from political pressure.
"I'd like to know who they bail out and why," said Paul, who brought together a small cult following across the political spectrum in the last presidential election. "I'd like to know how much they pay for securities that they buy. Did they overpay? Why did Goldman Sachs come out well and Lehman Brothers go bankrupt?"
Author of 'End the Fed'
That Paul's proposal has garnered so much support despite opposition from the Obama administration is not so much a testament to his political prowess. Rather, it reflects populist discontent over an institution increasingly blamed for its failure to head off the financial crisis and for its role in rescuing large financial firms that helped cause it.
"He's been dogged about it and stayed with it," said Steve H. Hanke, an economics professor at Johns Hopkins University. "The lesson in salesmanship is illustrated by Paul's actions. However, the consuming public is obviously ready to buy now. . . . There's just a great deal of skepticism out there. And in that environment, a bill that would require more transparency and less secrecy gets some traction."
But Paul's critique of the Fed goes well beyond the lessons of the financial bailout. He believes market forces alone, not the Fed, should set interest rates. His best-selling book is called "End the Fed." He has a separate bill to abolish the Fed altogether. (He is the lone sponsor.)
Paul said in an interview that his measure is strictly about transparency at the "all-powerful" Federal Reserve.
"What they're talking about when they say they want no political influence, what they're talking about is they just want secrecy," Paul said. "Why would they be so nervous about us finding this out? It tells you there's something big going on."
Leaders at the Fed have repeatedly stressed to Congress their increased efforts at transparency. Fed officials have noted that the central bank is disclosing more information than ever about its operations and balance sheet, which has expanded by more than $1 trillion as the Fed has carried out unprecedented actions to stabilize the financial system. Fed officials have also said they would work with Congress to provide additional information about how taxpayer funds are being used.
First elected to Congress in 1976, Paul has earned the nickname Dr. No from colleagues for his record of voting against almost anything he sees as intruding on free markets or amounting to government overreach.
He was one of only a few Republicans to vote against the war in Iraq. He opposed federal aid to Hurricane Katrina victims. He has called for abolishing the Internal Revenue Service, and during his career as an obstetrician-gynecologist in Texas, Paul saw some patients for free rather than accept Medicare or Medicaid, he recalled. None of his five grown children took out federal student loans.
Paul's principled, outside-the-mainstream stance has left him with few legislative victories. Of the nearly 200 bills Paul has proposed in the latest three congressional sessions, only two have made it to the House floor. His Fed audit bill, now part of broader legislation overhauling the regulation of financial markets, is by far the most popular.
Driven by beliefs
His bill's opponents do not suggest that Paul is driven by anything other than his beliefs.
Paul said his views on government, the economy and monetary policy developed gradually. He enrolled in his first economics class at Gettysburg College, where he graduated in 1957 with a degree in biology. While in medical school, he continued to read Ludwig von Mises and F.A. Hayek, Austrian economists who opposed central economic planning.
In the 1970s, the Nixon administration suspended the dollar's convertibility into gold and made the decision to impose import surcharges and wage and price controls. Then came the collapse of the Bretton Woods system of fixed exchange rates, which had defined the global economy since the aftermath of World War II.
Despite his unusual success in advancing the proposal, however, Paul is unlikely to cast a rare "yes" vote for it. That's because it is part of the bill proposing broad new financial regulation, something Paul simply cannot approve.
Those efforts have mostly been legislative non-starters. Many of his bills fail to attract a single co-sponsor.
But one of his perennial causes is headed to the House floor Wednesday with widespread support: to audit the Federal Reserve. That measure, which he first introduced in 1983, has the backing of more than 300 legislators and last month won bipartisan approval in the House Financial Services Committee.
The proposal would subject the Fed to unprecedented scrutiny by allowing the Government Accountability Office to audit all central bank operations, including its decisions on interest rates, lending to individual banks and transactions with foreign central banks. Fed officials and many private economists have argued strenuously against the measure, saying it would threaten economic stability by undermining the central bank's independence from political pressure.
"I'd like to know who they bail out and why," said Paul, who brought together a small cult following across the political spectrum in the last presidential election. "I'd like to know how much they pay for securities that they buy. Did they overpay? Why did Goldman Sachs come out well and Lehman Brothers go bankrupt?"
Author of 'End the Fed'
That Paul's proposal has garnered so much support despite opposition from the Obama administration is not so much a testament to his political prowess. Rather, it reflects populist discontent over an institution increasingly blamed for its failure to head off the financial crisis and for its role in rescuing large financial firms that helped cause it.
"He's been dogged about it and stayed with it," said Steve H. Hanke, an economics professor at Johns Hopkins University. "The lesson in salesmanship is illustrated by Paul's actions. However, the consuming public is obviously ready to buy now. . . . There's just a great deal of skepticism out there. And in that environment, a bill that would require more transparency and less secrecy gets some traction."
But Paul's critique of the Fed goes well beyond the lessons of the financial bailout. He believes market forces alone, not the Fed, should set interest rates. His best-selling book is called "End the Fed." He has a separate bill to abolish the Fed altogether. (He is the lone sponsor.)
Paul said in an interview that his measure is strictly about transparency at the "all-powerful" Federal Reserve.
"What they're talking about when they say they want no political influence, what they're talking about is they just want secrecy," Paul said. "Why would they be so nervous about us finding this out? It tells you there's something big going on."
Leaders at the Fed have repeatedly stressed to Congress their increased efforts at transparency. Fed officials have noted that the central bank is disclosing more information than ever about its operations and balance sheet, which has expanded by more than $1 trillion as the Fed has carried out unprecedented actions to stabilize the financial system. Fed officials have also said they would work with Congress to provide additional information about how taxpayer funds are being used.
First elected to Congress in 1976, Paul has earned the nickname Dr. No from colleagues for his record of voting against almost anything he sees as intruding on free markets or amounting to government overreach.
He was one of only a few Republicans to vote against the war in Iraq. He opposed federal aid to Hurricane Katrina victims. He has called for abolishing the Internal Revenue Service, and during his career as an obstetrician-gynecologist in Texas, Paul saw some patients for free rather than accept Medicare or Medicaid, he recalled. None of his five grown children took out federal student loans.
Paul's principled, outside-the-mainstream stance has left him with few legislative victories. Of the nearly 200 bills Paul has proposed in the latest three congressional sessions, only two have made it to the House floor. His Fed audit bill, now part of broader legislation overhauling the regulation of financial markets, is by far the most popular.
Driven by beliefs
His bill's opponents do not suggest that Paul is driven by anything other than his beliefs.
Paul said his views on government, the economy and monetary policy developed gradually. He enrolled in his first economics class at Gettysburg College, where he graduated in 1957 with a degree in biology. While in medical school, he continued to read Ludwig von Mises and F.A. Hayek, Austrian economists who opposed central economic planning.
In the 1970s, the Nixon administration suspended the dollar's convertibility into gold and made the decision to impose import surcharges and wage and price controls. Then came the collapse of the Bretton Woods system of fixed exchange rates, which had defined the global economy since the aftermath of World War II.
Despite his unusual success in advancing the proposal, however, Paul is unlikely to cast a rare "yes" vote for it. That's because it is part of the bill proposing broad new financial regulation, something Paul simply cannot approve.
Monday
WHO WANTS WAR?
If anyone still doubted that this administration’s foreign policy would bring any kind of change, this week’s debate on Afghanistan should remove all doubt. The President’s stated justifications for sending more troops to Afghanistan and escalating war amount to little more than recycling all the false reasons we began the conflict. It is so discouraging to see this coming from our new leadership, when the people were hoping for peace. New polls show that 49 percent of the people favor minding our own business on the world stage, up from 30 percent in 2002. Perpetual war is not solving anything. Indeed continually seeking out monsters to destroy abroad only threatens our security here at home as international resentment against us builds. The people understand this and are becoming increasingly frustrated at not being heard by the decision-makers. The leaders say some things the people want to hear, but change never comes.
One has to ask, if the people who elected these leaders so obviously do not want these wars, who does? Eisenhower warned of the increasing power and influence of the military industrial complex and it seems his worst fears have come true. He believed in a strong national defense, as do I, but warned that the building up of permanent military and weapons industries could prove dangerous if their influence got out of hand.
After all, if you make your money on war, peace does you no good. With trillions of dollars at stake, there is tremendous incentive to keep the decision makers fearful of every threat in the world, real or imagined, present or future, no matter how ridiculous and far-fetched. The Bush Doctrine demonstrates how very successful the war lobby was philosophically with the last administration. And they are succeeding just as well with this one, in spite of having the so-called “peace candidate” in office.
We now find ourselves in another foreign policy quagmire with little hope of victory, and not even a definition of victory. Eisenhower said that only an alert and informed electorate could keep these war racketeering pressures at bay. He was right, and the key is for the people to ensure that their elected leaders follow the Constitution. The Constitution requires a declaration of war by Congress in order to legitimately go to war. Bypassing this critical step makes it far too easy to waste resources on nebulous and never-ending conflicts. Without clear goals, the conflicts last forever and drain the country of blood and treasure.
The drafters of the Constitution gave Congress the power to declare war precisely because they feared allowing the executive unfettered discretion in military affairs. They understood that making it easy for leaders to wage foreign wars would threaten domestic liberties.
Responses to attacks on our soil should be swift and brief. Wars we fight should always be defensive, clearly defined and Constitutional. The Bush Doctrine of targeting potential enemies before they do anything to us is dangerously vague and easily abused. There is nothing left to win in Afghanistan and everything to lose. Today’s military actions are yet another futile exercise in nation building and have nothing to do with our nation’s security, or with 9/11. Most experts agree that Bin Laden and anyone remotely connected to 9/11 left Afghanistan long ago, but our troops remain. The pressures of the war racketeers need to be put in check before we are brought to our knees by them. Unfortunately, it will require a mighty effort by the people to get the leadership to finally listen.
One has to ask, if the people who elected these leaders so obviously do not want these wars, who does? Eisenhower warned of the increasing power and influence of the military industrial complex and it seems his worst fears have come true. He believed in a strong national defense, as do I, but warned that the building up of permanent military and weapons industries could prove dangerous if their influence got out of hand.
After all, if you make your money on war, peace does you no good. With trillions of dollars at stake, there is tremendous incentive to keep the decision makers fearful of every threat in the world, real or imagined, present or future, no matter how ridiculous and far-fetched. The Bush Doctrine demonstrates how very successful the war lobby was philosophically with the last administration. And they are succeeding just as well with this one, in spite of having the so-called “peace candidate” in office.
We now find ourselves in another foreign policy quagmire with little hope of victory, and not even a definition of victory. Eisenhower said that only an alert and informed electorate could keep these war racketeering pressures at bay. He was right, and the key is for the people to ensure that their elected leaders follow the Constitution. The Constitution requires a declaration of war by Congress in order to legitimately go to war. Bypassing this critical step makes it far too easy to waste resources on nebulous and never-ending conflicts. Without clear goals, the conflicts last forever and drain the country of blood and treasure.
The drafters of the Constitution gave Congress the power to declare war precisely because they feared allowing the executive unfettered discretion in military affairs. They understood that making it easy for leaders to wage foreign wars would threaten domestic liberties.
Responses to attacks on our soil should be swift and brief. Wars we fight should always be defensive, clearly defined and Constitutional. The Bush Doctrine of targeting potential enemies before they do anything to us is dangerously vague and easily abused. There is nothing left to win in Afghanistan and everything to lose. Today’s military actions are yet another futile exercise in nation building and have nothing to do with our nation’s security, or with 9/11. Most experts agree that Bin Laden and anyone remotely connected to 9/11 left Afghanistan long ago, but our troops remain. The pressures of the war racketeers need to be put in check before we are brought to our knees by them. Unfortunately, it will require a mighty effort by the people to get the leadership to finally listen.
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