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The Spectacle Blog
Could it get any better? Rep. Ron Paul (R-TX) is in line to take over the House Monetary Policy Subcommittee of the Financial Services Committee. Imagine the long-time Federal Reserve critic being able to haul Fed Chairman Ben Bernanke up for a few hearings on transparency, accountability, and more!
Retiring New Hampshire Senator Judd Gregg, one of the Federal Reserve’s most stalwart Republican supporters, showed up for a meeting at the central bank in November bearing a surprising gift: a box of End the Fed books. As he handed out the 2009 best seller by Representative Ron Paul, a longtime Fed critic, Gregg told the gathering it would be worth reading to see what the other side is plotting.
It may have taken 34 years, but Ron Paul has arrived, and he doesn’t plan to squander the moment. His agenda includes landing the chairmanship of the House Financial Services Committee panel that oversees monetary policy-a job that will give him the power to push legislation reining in the central bank and to haul Fed governors up to Capitol Hill for hearings.
Of course, Chairman Ben, as well as all of his buddies on Wall Street, are rather less than enthused about this possibility. And the usual “responsible” Republican leaders are talking about denying Rep. Paul the chairmanship.
But doing so would be a clear signal that they plan a go-along, get-along policy on one of the most important of issues: the Federal Reserve’s enormous economic influence. That wouldn’t be a good message to send to the many frustrated Americans who voted Republican before the new GOP majority has even taken office.
RJ| 12.3.10 @ 12:26PM
Ron Paul's work on the subcommittee in addressing monetary policy could be the most important contribution to economic prosperity in the near future. While conservatives have been focused on fiscal policy, we need to pay more attention to monetary policy. Fiat money allows government to steal from society, which we have witnessed at record-breaking levels over the last few years. Let this be the decade where we learn the lesson Ludwig von Mises taught in 1912 with his epic book "The Theory of Money and Credit."
Ryan| 12.3.10 @ 2:32PM
We're not going back to the gold standard. Sorry.
And ALL currency is fiat, more or less. Gold has no "inherent" value.
Sean| 12.3.10 @ 2:36PM
Who is talking about the gold standard? gold has more inherent value than paper and it can't be printed like paper. The explosion of government debt and devaluation of the currency is directly linked to the FED.
RJ| 12.3.10 @ 2:51PM
Politically, the odds are that you are right that governments will not reform themselves from the use of fiat currency. However, until currency has value to it, the value of money will continue to be manipulated for political interests, which leads to corruption. I don't understand your point that gold has no "inherent" value. Can you provide a more detailed explanation?
If we could avoid political manipulation and corruption, we could rely on fiat currency, but history shows that you can't keep politics out of fiat currency. The medium of exchange does not need to be based on gold, but it does require some sort of independent value to restore economic validity and avoid political distortions.
Even if governments don't convert, fiat currencies have failed and have been replaced by alternatives. In many places, the dollar substituted for local currencies which had lost public support. Now we are facing loss of confidence in many major currencies, so what happens next is the big question.
Tim K| 12.3.10 @ 12:35PM
The last thing this Country needs, or deserves is this Libertarian buffoon with one ounce of power in the 112th Congress. If we want something done than put Bachmann in, but not Ron Paul.
ds80| 12.3.10 @ 1:30PM
You know nothing about Paul's history re: The Federal Reserve then, do you -? You understand nothing re: The Federal Reserve's historical destruction of the US dollar then, do you -?
Aaron| 12.3.10 @ 1:34PM
Tim,
If you want limited government, then you want Ron Paul in the subcommittee role. Paper money enables the power of the state. There is no one else better qualified than Ron Paul.
Chuck| 12.3.10 @ 12:50PM
Kudos to Ron Paul for taking on the unconstitutional Federal Reserve; the FED is a private central bank created by Congress that has cheated taxpayers for 97 years, destroyed the dollar and piled up 14 trillion in debt. Now Congress can eliminate the FED and go back to what is constitutional...coins as currency-gold and silver coins. With the latest news with the FED bailing out businesses and foreign countries the time is now strike the iron while it's hot. Audit the FED and put the FED Chief and governors in jail for perjury.
JFGalt| 12.3.10 @ 1:03PM
Don't everyone count their chickens before they're hatched - until you see Dr. Paul sitting in the chair with the gavel. Are the republicans fully capable of denying him the chair - you bet. Can you image Dr' Paul's first question? Mr. Benanke - The American People would like you to tell us WHO owns the Federal Reserve? Do you think people are ready to allow that question to be asked let alone answered?
John| 12.3.10 @ 1:07PM
Stop Beohner now! They are colluding to prevent Ron Paul from getting the chair.
Quote:
Five GOP leadership aides, speaking anonymously because a decision isn't final, say incoming House Speaker John Boehner has discussed ways to prevent Paul from becoming chairman or to keep him on a tight leash if he does.
http://www.businessweek.com/ma.....613107.htm
Aaron| 12.3.10 @ 1:32PM
I have already called Boehner's office to voice my 100% support for Ron Paul. I don't trust anyone else in the subcommittee role.
vman77| 12.3.10 @ 1:38PM
C'mon, all you nutty libertarians out there who talk about "fiat" money not being real...if I walked up and gave you $20, you wouldn't refuse it because it's not made of silver or gold.
The Fed didn't pt us 14 trillion in debt, it was 40 years of liberalism aided by "me, too" Republicans. You probably believe the second gunman theory and in ufo's at area 51 also.
Sean| 12.3.10 @ 2:40PM
The FED facilitates the debt and deficit.
Austrian School| 12.3.10 @ 3:03PM
vman77,
Please reconsider. You really can't have limited government with paper money. Also, Article I, Section 10 mandates that only gold and silver are legal tender. So you really can't support the Constitution if you approve of paper money.
Tony| 12.3.10 @ 4:40PM
Section 10 only sets limits on the states. It doesn't apply to the Central government.
Red Phillips | 12.3.10 @ 6:29PM
Technically correct Tony, but it prohibits states from accepting anything other than gold and silver (creating their own paper currency really) because it didn't want the Federal currency to be undermined which was taken for granted would be gold and silver. The provision makes no sense otherwise.
CalMark| 12.3.10 @ 1:51PM
CPI (consumer price index) inflation figures show that the rate of inflation skyrocketed, more-or-less permanently, in the early 1970s. Before then, inflation was a minor, short-term problem for brief periods. In fact, the dollar remained relatively constant during long periods of our history, including almost the whole 19th century, and most recently throughout the 1950s and 1960s.
Why is the dollar debased? Lots of factors, including national debt. But mainly, fiat money.
Starting no later than about 1910, look at a curve for cumulative inflation--i.e., the combined effect of all previous inflation on every year. It takes off like a rocket about 1972.
Ron Paul has said and done many things that make me think he's a kook. I'm not sure whether he'll be a useful kook or not. But I welcome an investigation into the Fed and the weaseley Bernanke.
Some academic questions: What's the alternative to the Fed? I'm no fan of the Fed, but: rabid Fed-haters what is your SOLUTION? Do we go back to Wall Street "unofficially" running the currency, as we did before the Fed?
Ryan| 12.3.10 @ 2:34PM
We had a Great Depression on the gold standard as well.
It's NOT a cure-all.
And, keep in mind, the rate of increase in inflation was MINIMAL during the Reagan years - and a TON of people joined the middle class from the lower.
Austrian School| 12.3.10 @ 3:11PM
The Great Depression was the result of a government meddled gold standard. Gold got the blame, but the government was at fault.
This is not too different from our current situation. Democrats blame the market, but the government was really at fault in the housing bubble.
Here is a resource... http://mises.org/books/whathasgovernmentdone.pdf
Austrian School| 12.3.10 @ 3:14PM
Also, Reagan appointed Ron Paul to his Gold Commission that almost recommended going back to hard money.
Remember, Ron Paul was Reagan's biggest supporter in 1976 when Republicans were full of Rockefeller moderates. He suck his neck out for Reagan.
CalMark| 12.3.10 @ 3:43PM
The first 4 full years of the Depression had average DEflation of 6%, due to the Fed inexplicably CONTRACTING the money supply. There was plenty of gold; the Fed just refused to print money (imagine that!). Gold had nothing to do with it.
For all his greatness, Reagan's inflation score is OK only in the context of 1966 onward. Inflation during Reagan's budget years (1982-1989) averaged 3.2%. At that rate, a dollar loses half its value every 10 years or so. That's supposed to be good? Think what it does to retirement savings.
Ron Paul could be OK as chairman. However, he needs to stick to objective tough questions (Where is the money going? Show me your books, Bernanke! Just what the hell are you up to, anyway?) and avoid the temptation of getting sidetracked by the weird hobbyhorses that only his cult followers find compelling.
Austrian School| 12.3.10 @ 3:09PM
CalMark,
Your comments on inflation are spot on with my understanding.
Basically, the alternative to the Fed is the free market, in its direction of interest rates and the supply of money. The Fed is basically a "price fixer" that will always get it wrong.
Money, as mandated in Article I, Section 10 (gold and silver) should be supplied by the marketplace just like any other good or service.
In some ways, there is no distinction between saying that I believe that the market should supply iron ore and that central planners have no clue as to the exact supply to meet demand.
I recommend reading into the Austrian School.
Tony| 12.3.10 @ 4:38PM
Section 10 sets limits on the states it doesn't apply to the Central government.
Red Phillips | 12.3.10 @ 6:31PM
See my reply to you above.
Red Phillips | 12.3.10 @ 2:01PM
Perhaps Boehner should talk to Saul Anuzis or Rudy Giuliani or any number of other people who have crossed Ron Paul and his supporters before he attempts to do something as foolish as deny Paul his rightful spot on the committee. Boehner's phone lines will be burning up like never before.
Ryan| 12.3.10 @ 2:35PM
I'm no fan of the Fed nor the Gold Standard, and I think that Ron Paul needs to be the chair to ask the questions that need asking and push good economics generally there.
Kook or not, we need someone who will shake things up in charge of that committee.