USA Today Reviews "End the Fed"

[Chase]

http://www.usatoday.com/money/books/reviews/2009-09-21-end-the-fed-review_N.htm

Texas congressman wants to 'End the Fed'

By Seth Brown, Special for USA TODAY

"The Federal Reserve should be abolished," writes Ron Paul, "because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty."

This is the thesis of Paul's End the Fed (Grand Central Publishing, $21.99, 224 pages), the Texas congressman's case against the Federal Reserve. The title was taken from a slogan that Paul heard chanted at various rallies and conventions, filling him with hope that monetary policy has become a subject worthy of popular protest.

Many people consider the Fed an "indispensable institution," but few know what the central bank actually does. For example, the Fed "can create trillions of dollars and distribute them to its cronies without congressional oversight," writes Paul, a former GOP presidential candidate.

Creating an endless supply of money is the worst offense of the Fed, an institution that Paul believes is the root of many of the nation's problems, including:

•A monetary policy that benefits bankers, rather than the common man. The 1910 meeting where the idea for the Federal Reserve was drafted involved bankers and government officials working in secrecy on Jekyll Island off the Georgia coast.

•Giving too-big-to-fail banks little reason to pursue efforts toward efficiency because the Fed is there to save them in a crisis.

•Giving government a blank check with which to wage war. When governments have to finance wars without central bank cash infusions, they're forced to economize on resources and end the conflict as soon as possible. Instead, Paul argues, our government, backed by the Fed, is like "an irresponsible teenager with an unlimited line of credit."

•Interfering with the ability of the free market to give accurate feedback to borrowers and lenders. Artificially low interest rates can distort signals that borrowers use to assess risk, which can lead to false confidence in the economy and excessive use of capital.

•Creating "moral hazard" through market rescue of companies. The sense of responsibility for one's own actions is removed, conditioning business people to believe they can enjoy the rewards of the market, yet pass on the penalties to others.

•Fueling inflation by increasing the money supply without regard to the pace of economic growth, thus debasing the currency in much the same way that counterfeiting steals value from every dollar.

It's no surprise that Paul, the Libertarian standard bearer, should number among his intellectual influences two legends of the Austrian free-market school of economics, Ludwig von Mises, and Friedrich von Hayek, author of The Road to Serfdom, considered among the most influential books of the 20th century.

In Paul's best-case scenario, the Fed would be dismantled. With its demise, he argues, rationality would be restored to monetary policy. With limits on the printing of money, inflation would halt, the dollar would keep its value, and banks and government would spend within their means. In short, the federal government would have to raise money as states do, and face the same balanced-budget constraints. Paul also envisions a return to the gold standard, which was abandoned in 1933, and Americans being able to trade in gold and silver bullion.

The book includes transcripts of Paul's conversations with former Fed chairman Alan Greenspan and current occupant Ben Bernanke, which feel more like grandstanding than helpful additions to the book's argument.

Still, Paul offers a cogent defense of his position. Readers may question his desire to return to a gold standard, but Paul makes a strong case for the importance of sound monetary policy. To Paul, the small steps we take toward a sound policy begin with curtailing the unchecked power of the Federal Reserve.

 

[Indy Vidual]

Pretty good, considering the source.

 

[sevin]

Yeah, I'm surprised the review wasn't more critical. It's amazing to me that this information is actually in USA Today. Awesome.

 

[MRoCkEd]

That was very good

 

[specsaregood]

It only sounds like "grandstanding" because he was/is right.

 

[Live_Free_Or_Die]

nt

 

[Epic]

"Readers may question his desire to return to a gold standard"

That's ambiguous. RP's not really for a government gold-standard - but a market one.

"I wouldn't exactly go back on the gold standard but I would legalize the constitution where gold and silver should and could be legal tender, which would restrain the Federal Government from spending and then turning that over to the Federal Reserve and letting the Federal Reserve print the money." - RP

 

[swirling_vortex]

Yeah, I'm surprised the review wasn't more critical. It's amazing to me that this information is actually in USA Today. Awesome.

I'm sure Mr. "Deficits Saved the World" Krugman will be asked for his opinion on it in the next few days.

 

[Original_Intent]

The fact that these guys and CNBC both put out a fairly positive or at least balanced review has me worried for some reason. Paranoia, self destroyer....

 

[brandon]

Good article. Is this in the print edition?

 

[FindLiberty]

Great!

Looks like usatoday.com needs more* positive comments regarding this story.

+++++++++++

*(it was posted several hours ago and there are only 2 comments as of 9:37pm CST 9-21-09)

 

[Matt Collins]

I met with a consultant from CFL today. They said that the CFL had no idea that the "Audit the Fed" bill would ever get to where it is today! 270 sponsors was a mere dream a year ago.


We've come a long way.... of course we still have a long way to go.

 

[Nanerbeet]

Listen; state controled media and members of congress bristle with excitement as they ponder endless posibilities by taking the printing presses away from the Fed and handing them to Barney Frank and Chris Dodd. ARE YOU SURE THIS IS A GOOD IDEA??? Haven't you wondered WHY this is getting more attention than the usual "Ron Paul is a crackpot" jokes? Seems a little suspicious, if you axe me.


I thought a free market without government intervention was the goal? Now we're suddenly thinking we should put the economy in the hand of congress? What a disaster.

 

[hugolp]

Listen; state controled media and members of congress bristle with excitement as they ponder endless posibilities by taking the printing presses away from the Fed and handing them to Barney Frank and Chris Dodd. ARE YOU SURE THIS IS A GOOD IDEA??? Haven't you wondered WHY this is getting more attention than the usual "Ron Paul is a crackpot" jokes? Seems a little suspicious, if you axe me.


I thought a free market without government intervention was the goal? Now we're suddenly thinking we should put the economy in the hand of congress? What a disaster.

I agree with you in that puting the printing presses in the hand of politicians is not the answer, not at all.

But I dont think its all a media controlled co-op. People really want to know about the Fed and what its going on there. And when the media talks about the Fed their ratings go up.

As for giving the printing presses to politicians, the only "good" thing would be that the end would come sooner and you could start over.

 

[gimmeliberty]

...

The fact that these guys and CNBC both put out a fairly positive or at least balanced review has me worried for some reason. Paranoia, self destroyer....

One of these Two reasons might justify you being worried ,...

1. The "END THE FED" momentum has built enough traction to actually
override the choreographed bad (or NO) publicity efforts & media
manipulations that have been
smothering it for years,
to a point that it's now entering mainstream consciousness
in a positive context.

OR,...

2.They've anticipated the inevitable, and have had the time
to formulate the plan, in which, blame would be shifted onto
any type of new (transparency) legislation threatening the FED System,...
this, in turn, would allow their "solution" to be welcomed
as the "fix" to the crisis that they "warned" would occur if
any such legislation were ever passed.

 

[Gideon]

We have a winner!

...

2.They've anticipated the inevitable, and have had the time
to formulate the plan, in which, blame would be shifted onto
any type of new (transparency) legislation threatening the FED System,...
this, in turn, would allow their "solution" to be welcomed
as the "fix" to the crisis that they "warned" would occur if
any such legislation were ever passed.

RP and his supporters will take the blame for the crash subsequent to the FED's transparency.

The same banksters who milked the FRN to the last drop of blood, will ultimately save the day with a new and improved monetary system for the masses!

I like the gold standard, but not as much as I like the dollar represented as 371.25 grains of silver.

 

[Bruno]

It only sounds like "grandstanding" because he was/is right.

+ 1

 

[lx43]

How many books has he sold?

 

[TCE]

1. This is the first I have ever heard Dr. Paul go in-depth about his life. He always talks about current events and the Liberty Movement/Congress, but never about his life.

2. The Fed will not have its power taken away. Do you really think all of the bankers would just throw up their hands and say "you've got us, we'll close the Fed."?

 

[Gideon]

RP has been pushing his audit the fed bill since the 1980s...