Ron Paul's Misguided Views on the Federal Reserve bank

Ron Paul's Misguided Views on the Federal Reserve bank

Presidential Candidate Ron Paul has become the quirky candidate embraced by the fringe groups. He campaigns as a stop the war libertarian. What rankles me about his position is his view that the Fed should be abolished. Take a listen at the video below:

There is so much to disagree with here. His biggest argument is that because the Fed is an independent institution, it lacks the proper transparency and oversight to properly function. Well, that was the whole idea. The Fed needed to be removed from politics so that Fed Chairmen didn't succumb to political pressure to print money and help politicians stay in office. Independence is essential. George H Bush wanted Greenspan to lower interest rates in 1991 so that he could stay in office. Imagine what would happen if Presidents and Congress had more influence.

They do by the way have influence. Every four years the President chooses a Fed Chairman who must be approved by the Senate. If a Chairman isn't doing well or lacks the public trust, he can be removed after his four year term expires. This is unlike a Supreme Court justice who serves for life.

In the video he also says that the United States has only grown via a $800 billion yearly accounts deficit. This is wrong. The United States enjoys one of the highest rates of productivity growth in the world and this, more than anything has contributed to the country's growth in wealth.

He also makes the point that the wealthy were the main beneficiaries of the Fed's low rate policy from 2000-2007. This ignores the millions of middle and lower class consumers who benefited from lower rates on mortgages, credit cards, etc. The rate of home ownership in the country has soared. While some took on more debt than they could afford, whose fault is this. As a libertarian, Paul should realize that responsibility rests with the individual.

I realize its fun and a bit hip to get on the Ron Paul bandwagon. But remember what happened the last time we didn't have a Federal Reserve - The Great Depression. Things may sometimes get a bit off-kilter with the Fed, but they can sure get a whole lot worse without it.

 

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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Comments

  • firehorse

    November 04, 2007

    he who controls the money,controls the economy. he who controls the economy,controls the government. he who controls the government,controls the country. the fed is run by unelected men who control the money of the this country. if you think only politicians are corrupt then you are naive. policy has nothing to do with it. merits of a system have nothing to do with it . its about power. here one for you when a bank waste its money and goes under who pays fdic? nope the taxpayer. when inflation goes up who suffers the most? not rich people when the fed increases the money supply where does it go? not to you or me. it goes to the banks. to secure their credit. these people do not give a shit about any of us!

  • tog

    December 20, 2007

    ignore amanda .she is crazy

  • Ron Shays

    March 13, 2008

    I read the data. It's hard to pin our problems on the Fed. The problems start with our own greed and lack of desire to save. Easy money just fuels the problem.

    The Fed was too accommodative over the last 15 years. Greenspan thought that tech productivity allowed interest rates to stay allow without inflation. He was partially right but the low rates fueled some massive bubbles. Too little cash is bad and we've not learned that too much cash is equally bad.

  • ray b

    March 18, 2008

    Amanda , trace the roots of the organization. read The Creature from Jekyll Island by e. griffin keep an open mind to ALL information, and see who always comes out ahead. figure out who the lender of last resort is, the look who guareentees that loan. you dont have to look far, 2 dollars a share for bear stearns with someone elses money?

  • ho hum

    September 24, 2008

    He doesn\'t seem so crazy this week does he?

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