Ed Wagemann's Reviews > End the Fed

End the Fed by Ron Paul
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Dec 23, 11


End The Fed by Ron Paul

I first developed an interest in politics after 9/11. Why on earth would someone hate America that much, I wondered? Who is al qaida? What the hell is their problem with us? So I began paying attention to politics, U.S. foreign affairs in particular. During the Bush/Cheney march to war in Iraq in 2002 I was tuned in and I watched in amazemenat as that administration fed the American public one line of bullshit after another. I mean I was all for getting rid of Saddam, but what I was not for was being lied to. And it was so obvious to me that the Bush/Cheney Administration were lying out their asses. So it was a relief when ole Barack Obama, a local Chicago poltician, came onto the scene, for he also saw that the Bush/Cheney Administration was lying out their asses and that he spoke out against them. The Bush/Cheney war was not about Saddam's violation of human rights, or about national security and WMDs. It was about oil and geo-political influence. And as I watched the 2004 Presidential election, the Bush/Cheney lies just continued. Cheney was obviously evil. W was a retard, yet Kerry/Edwards didn't inspire me to drive to my local voting place, wait in line and cast a vote either. They just didn't seem like they would make things drastically any better.

How can you be so interested in politics yet not vote? People would ask me. I wasn't sure. It just didn't seem like it was worth my time. I would lamely argue that Illinois always votes Democrat anyway, so my vote wouldnt really make a difference. Plus I dont agree with the electoral college system. Why not one person = one vote? But honestly, the main reason was because the root of what I thought was wrong with our corporate-political economic system was not going to be solved by any of these candidates. No one was speaking out for what I wanted. I wanted to live in a nation that put an emphasis on Ethics, honesty, transparency, and basic human decency. I wanted to live in an America where not ONE single corporation polluted the environment or rushed untested drugs that damaged people onto the market. I wanted to live in an America where every single child had equal educational opportunities and health care. I wanted to live in an America where the economic system did not reward greed.

When 2008 rolled around, I chose not to vote once again. I was glad Obama won, but I didn't think he was going to overhaul our entire system. And in 2009 when he made sure that the "too big to fail" financial institutions got a multi-billion dollar bail out, it felt like he was just more of the same old, same old.

Which brings us to 2012. For a few years now I had been listening to talk radio regularly--both left-wing stations and right-wing ones. I had spent the last few months of 2011 watching the Occupy Wall Street folks with interest--but I couldnt help but think that they had no chance of drastically changing the system. They might accomplish something positive, some small step in the right direction, but nothing revolutionary. And I also watched in waning interest as the Republican Party went through the fiasco of trying to nominate a Presidental candidate--a process that resembled mentally handicapped people playing musical chairs All of which led me to the the notion that most likely Obama would have 4 more years--4 more years with which he might hopefully do some positive things, especially in the area towards building a greener infrastructure. But still I did not see anything revolutionary on the horizon, nothing that would begin to tear down the corrupt corporate political system that governed our nation. And it was beginning to look as though the 2012 Presidential election was going to be the same old typical bull shit, with nothing of interest in terms of real change being injected into the national debate. But then...

Enter Ron Paul

Ron Paul is not a new name in the presidential campaign. He ran in 1988 and 2008 with pretty much the same Libertarian message as he has today. But for the first time, he actually has a chance of actually interjecting this message into the national conversation. For the first time Paul is looking like he is about to enter the national spotlight as he is now poised as an honest contender to win the first Republican contest in Iowa. The time for his message to be heard, might have finally come.

The centerpiece of Paul's message is that our nation needs to phase out the Federal Reserve System. To get a more detailed picture of this argument I picked up a copy of his 2009 book End the Fed. On page 4 of End the Fed Ron Paul writes "...I think the system of Fed domination must come to an end." On page 11 he goes on to write, "The Federal Reserve System must be challenged. Ultimately, it needs to be eliminated."

Now that is what I call a revolutionary idea. Paul does not come right out and say that we need to get rid of Federal money or even get rid of a Federal Bank, but he does say that we need to get rid of the Federal Reserve System. Paul then goes on to lay out the more than just a few gripes he has with the Fed system. He thinks that no single institution in society should have a monopoly on money. It puts too much power in the hands of the Federal Government. He also doesn't like the idea that the U.S. government can just print money out of thin air in order to (directly or indirectly) generate funds for its agenda and policies--whether that agenda be a war for oil in Iraq, or universal healthcare, or financial aid to victims of Katrina, or building and repairing the nation's infrastructure. Paul also argues that having a Federal Reserve allows banks to provide risky loans. And that it also provides banks with 'elasticity' (the ability to expand money and credit as much as they want to). The Fed, as Paul sees it, is in the business of generating inflation. In fact since the creation of the Federal Reserve in 1913 the worth of the dollar has shrunk to just 5 cents.

The reason, Paul argues, that the Fed can do all these things is because of "the institution of fractional reserves" -- in other words the mixing of the two distinct functions of the bank. The first function of a bank is simply the warehousing of money whereas the second function is providing a loan service. When the warehousing of money becomes a source of lending that is considered as mixing the two distinct functions of a bank (a.k.a. the fractional reserve sytsem). As the Fed relies heavily on fractional reserves, "using the banking system as the engine through which new money is injected into the economy as a whole" and then backs this fractional reserve system with the promise of endless money creation and bailouts, it perpetuates an illusion, according to Paul. Paul labels this system as half-socialized--"propped up by the government". It is a system that was created by the establishment of the Federal Reserve in 1913 by "powerful bankers with powerful government officials working together to have the nation's money serve their interests..." The Fed was designed to benefit the rich and poweful and that is what it has done for the last hundred years, continually making the rich even richer and expanding the gap between the 1%ers and the rest of us.

So if the Fed is so bad, then why not get rid of it, as Paul urges?

Right Here, Right Now

The one major problem with free market capitalism is that it doesn't concern itself with humanity. It simply does not calculate humanity into the equation at all. It ignores humanity--which is why free market proponents come off as so callous: they have dehumanized us. They think only in terms of monetary concerns, the bottom line. And this is why free-market capitalism will never work. It is why we have Ron Paul and Libertarians making callous comments about victims of Katrina, or about victums of large corporate drug companies who have rushed untested drugs onto the market. It is why they do not seem concerned about children who have gotten cancer due to chemicals that nearby factories dump into the land, air and water in their neighborhoods. The government shouldn't regulate these corporations--you have to let the free market determine everything and fuck the people who get bulled over by the wave of free-market enterprise, for people are not important. Only corporations are important. They are all that matters.

And this is why true free-market capitalism has never worked and never will work. We say we have a capitalistic system, but the truth is--as Ron Paul says, we have a half-socialized system, a half-capitialistic system. Which is actually a good thing. If you pit capitalism against communism, neither one actually takes into account the realistic influences of human nature. In a strictly communist society, with no economic motive to get ahead, there will be people who simply will not contribute, people who will be motivated NOT to work. Why should they go out and bust their ass when their food and shelter is provided for them? There will also be those who form a black market, there will be those who get ahead through corruption. Likewise, a strictly capitalistic society, falls victim to human vices as well. Those with power and money and access to power and money create machinations that perpetuate their access to power and money and that discriminate in order to further deny that access to others. This is why there are no truly capitalistic societies nor any truly communistic societies in the world. What we have are systems that are various combinations of the two, and that are in continual flux, teeter-tottering back and forth, leaning toward one or the other at all times. In the U.S for example, for every shift toward communism (like the New Deal in the 1930 or the Great Society in the 1960s) we see a counter-shift toward capitialism (like in the Eisenhower Era and Reagan Era). At times however, these battles are very complex and colored in nuance. Today for instance, we are seeing that the capitalisitic shift during the Bush/Cheney that was camoflauged in smoke and mirrors is being countered with a communistic shift of the ObamaCare era that is equally as nuanced, complicated and camoflauged in smoke and mirrors.

Which brings us back to Ron Paul and his effort to shift America back towards capitalism--which is really what his 'End the Fed' ideology is all about. Does America need a shift towards free-market capitalism right now? Or do we need to continue shifting towards socialism? Is there some way to restructure the Federal Reserve System? What would happen if we stopped bailing out the "too big to fail" financial institutions? In the long run would that be better for America? Wouldn't it be more fair?

Maybe there is hope for this year's Presidential Election after all...
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